Contractor Management 101: Definitions & Basic Concepts


Contractor Management: What Is It?

Many industries often rely upon contractors for very specialized skills and, sometimes, to accomplish particularly hazardous tasks – often during periods of intense activity, such as maintenance turnarounds.

Such considerations, coupled with the potential lack of familiarity that contractor personnel may have with facility hazards and operations, pose unique challenges for the safe utilization of contract services. A Contractor management system is a set of controls and procedures to ensure that contracted services support both safe facility operations and the company’s process safety and personal safety performance goals. This element addresses the selection, acquisition, use, and monitoring of such contracted services. Contractor management does not address the procurement of goods and supplies or offsite equipment fabrication functions that are covered by the asset integrity quality assurance function. While the most significant contractor safety challenges typically involve workers located closest to process hazards or involved in high-risk occupations, such as construction work, the safety needs of contractors providing simpler and more routine tasks, such as janitorial or groundskeeping services, must also be addressed in the contractor management program.

Why Is It Important?

Companies are increasingly leveraging internal resources by contracting for a diverse range of services, including design and construction, maintenance, inspection and testing, and staff augmentation. In doing so, a company can achieve goals such as

(1) accessing specialized expertise that is not continuously or routinely required,

(2) supplementing limited company resources during periods of unusual demand, and

(3) providing staffing increases without the overhead costs of direct-hire employees. However, using contractors involves an outside organization that is within the company’s risk control activities.

The use of contractors can place personnel who are unfamiliar with the facility’s hazards and protective systems into locations where they could be affected by process hazards. Conversely, as a result of their work activities, the contractors may expose facility personnel to new hazards, such as unique chemicals hazards or x-ray sources. Also, their activities onsite may unintentionally defeat or bypass facility safety controls. Thus, companies must recognize and address new challenges associated with using contractors. For example, training and oversight requirements will be different from those for direct-hire employees. Thus, companies need to carefully select contractors and apply prudent controls to manage their services (Ref. 13.1). Only by working together can companies and contractors provide a safe workplace that protects the workforce, the community, and the environment, as well as the welfare and interests of the company .

Where/When Is It Done?

Contractor management begins well before the issuance of any service contract. Systems must be established for qualifying candidate firms based upon not only their technical capabilities, but also their safety programs and safety records. Orientation and training of contractor personnel must be accomplished before they begin work. Responsibilities for this training must be defined, with some training often provided by the contract employer and some by the contracting company. The boundaries of authority and responsibilities must be clearly set for any contractor that works at the facility. Periodic monitoring of contractor safety performance and auditing of contractor management systems is required. At the end of each contract period, retrospective evaluation of a contractor’s safety performance should help determine whether the particular contractor is retained or considered for future work.