Vigilance in Outside Contracting

The Tip of the Month for May raised awareness of the role of process safety management (PSM) in preventing accidents. You may be aware that OSHA 29 CFR 1910.119 determines what constitutes a PSM regulated facility and other laws such as Section 304 of the Clean Air Act address PSM training for employees. These are examples of efforts to drive increased vigilance for safety in industries such as Oil and Gas, but how are we applying this vigilance to our contracting processes? How do we avoid having outside contractors represent the highest percentage of reported injuries and fatalities or be the cause of them? There are a couple of keys to being on top of contractor safety management that apply to both engineering and contracting professionals.

In many respects, contractor safety is inherently more difficult to maintain than the safety of our own employees. For one thing, multiple business cultures are involved when contractors are working on our sites. The contracting process must overcome differences in safety standards, attitudes, training and communications between all the parties. This may be a concern for a single project with multiple contractors and sub-contractors or it may result from a revolving door of unique contractors used to meet ongoing requirements for operations and maintenance activities. Vigilance in this case starts with recognition of the dynamic nature of the workforce involved.

Secondly, there can be a general tendency with contracting terms and conditions, originally designed to raise the level of awareness and vigilance for contractor safety, to simply become safety “boilerplate” included in a mountain of documents. Warning signs of this problem can occur in two ways:

• Data collected in the contracting qualification phase is simply reviewed for completeness and then filed without proper analysis for each specific job being contracted. A contractor might be PSM approved, have provided required OSHA logs and a list of Health, Safety and Environmental (HSE) training programs and still not have dealt with a particular hazard that applies to the job in question. Who will uncover this information before the job begins?
• Contract terms and conditions for safety become standardized (as they should), but there are little or no job-specific terms and conditions added in each contracting process (the one-size-fits-all contract syndrome). Who tells the contracting department what unique hazards are involved in each job? Does the contracting department require a job hazard analysis or pre-job meeting and safety plan when putting a contract together in order to expand the language appropriately?

Example:

According to a 2003 bulletin from the U.S. Chemical Safety Board on nitrogen asphyxiation, there had been 80 deaths and 50 injuries from asphyxiation over a period of ten years ending in 2002. Yet there have been instances since of workers and contractors not adequately warned or trained to avoid improper entry into an unsealed, confined space under a nitrogen purge.

Regardless of any safety training documentation provided by the contractor or safety language commonly found in the contract, I would want to see a clear statement that this job involves work around a vessel containing nitrogen. There then should be a formal, documented acknowledgement that these workers (by name) are trained in the hazards of nitrogen purges and oxygen-deficient atmospheres and have been instructed about client company confined space entry rules. They must know that “oxygen deprivation rapidly overcomes victims, there is no warning before being overcome, oxygen-deficient atmospheres might exist outside confined space openings and rescuers must strictly follow safe rescue procedures.” A contractor safety plan might include required steps by the client to barricade the work area and post warning signs for a particular job. There may have been hundreds of other recent contracts that had nothing to do with this type of hazard and yet the contracting process needs to be able to put it on the table in this instance. It requires the help of everyone involved to identify, communicate and document these needs.

Vigilance in contracting requires use of all the information we collect in the contracting process. For example, ISN is billed as the leader in Compliance Records Management and Reporting with more than 8,600 contractors and 100 owners using the service. As a result, most major oil companies are owner/subscribers to ISNetworld as a standard tool for HSE compliance among other things. How is the contracting function using this tool? In the interest of maintaining vigilance, is there a measure of this use?

If 100 contracts are issued each month involving outside contractor work, how many inquires are made to ISNetworld to review and verify HSE records or information? Like tracking hits on a website when new marketing campaigns are launched, there should be a user metric that correlates to new contracts being issued. If inquiries are not being made as contracts are finalized, why not?

In our PetroSkills approved course, SC-41 Contracts & Tenders Fundamentals, there is a role playing exercise that ties much of this discussion together. The scenario involves role playing as representatives of owner and contractor teams to review requirements for demolition of an old sulfur recovery plant. With the plant being out of service for 10 years and “hydrocarbon free,” there is a disagreement about the need and expense for gas tests on the lines to be removed and Nomex protective wear provided for the contract workers. How will a contract move forward?

The first indication of contracting vigilance demonstrated in the exercise is simply in having such a meeting instead of just passing contractual documents back and forth prior to the work initiation. Second it demonstrates how this type of pre-job meeting will highlight the understanding, issues and concerns of both parties while providing the means to contractually document, communicate and monitor the resulting HSE requirements going forward.

In May, Clyde Young concluded his Tip of The Month with the observation that safety culture can be defined as “the way we do things around here.” That certainly applies to working with outside contractors and should raise the question of whether constant vigilance is adequately built into the contracting process.

To learn more about roles and responsibilities in contracting processes, we suggest attending our Contracts & Tenders Fundamentals course. Other Supply Chain, Operations Management and HSE courses may be found on our website.

By: Ronn Williamson
Instructor / Consultant