Selecting Safe Subcontractors

Among the most important issues to consider when selecting subcontractors is the subcontractor’s commitment to safety. Choosing a subcontractor with a poor safety record can lead to huge problems for the controlling contractor.

Unsafe contractors place not only their own but other employers’ workers in danger. They also create a financial risk for the controlling contractor, the general contractor and the owner. To reduce the risk associated with hiring a subcontractor, every contractor should establish a selection process that will limit project exposure, ensure quality workmanship and, of course, maximize profits.

Some contractors view cost as the most important factor in subcontractor selection. That mindset often leads to inferior workmanship, delays, cost overruns and, worst of all, accidents. One of the first cost cuts that an unsafe subcontractor will make to lower a bid is the cost of compliance with OSHA and other safety regulations.

Contractors are responsible for the entire scope of work under their contract with the general contractor or owner. If a subcontractor is added to the mix, the controlling contractor is responsible for the subcontractor’s actions and may be held liable for any of the following caused by the subcontractor: bodily injury, property damage and OSHA and environmental violations from any operations associated with the scope of the work. If, for example, a utility contractor hires a subcontractor to perform a task such as horizontal boring to bore under a railroad, then that utility contractor can be held liable for the actions of that subcontractor.

The following are some basic, safety-related guidelines that should be used to qualify a subcontractor from a safety standpoint: Have the subcontractor provide (1.) documentation of his company’s experience modification rate (EMR); (2.) OSHA logs for the most recent few years; and (3.) current safety program. Then carefully analyze each.

Assess the EMR
The EMR is an insurance rating that provides a quick look at the subcontractor’s accident experience. The EMR is a ratio of a company’s actual workers’ compensation losses for its type of work over a three-year period. The rating does not include the current or previous year’s accident record, which is why you should look at the OSHA logs too. Don’t hesitate to ask if the subcontractor has experienced any accidents during those prior two years, because even though the EMR is a valuable tool for screening companies, there is a gap in the data that is not reflected in the number.

The EMR is equal to the actual losses divided by expected losses. An EMR of less than 1.0 is desirable because it reflects fewer past accidents of a less severe nature. An EMR above 1.0 indicates the opposite, showing that the subcontractor may have some safety issues and may need some more in-depth scrutiny. Occasionally the EMR may appear to be worse than it really is because of a single incident, such as a back injury. However, the EMR for workers’ compensation insurance is probably the single most reliable measure of past safety performance and is the most difficult to manipulate.

Review the OSHA Logs
OSHA logs will identify recordable injuries and illnesses over a calendar year. Request copies of the subcontractor’s OSHA logs for the past few years. The information provided will help fill in the gap for the current and last year, as well as provide useful information to calculate the subcontractor’s incidence rates (IR = number of injuries and illnesses x 200,000 ÷ number of employee hours worked) to determine whether the subcontractor’s accident experience is above or below the industry average. The industry average for any given year can be obtained through the Bureau of Labor Statistics (www.BLS.gov) or Occupational Safety and Health Administration (www.OSHA.gov). In some situations, you may be able to obtain descriptions of the accidents which may help identify the types and causes of the incidents. You can also find information about a subcontractor by going to the OSHA website.

Evaluate the Safety Program
Ask for a copy of the subcontractor’s written safety program and don’t just take it and forget it. Have your safety director evaluate it to determine if the subcontractor is seriously committed to safety, loss prevention and safety management. When evaluating a safety program, take the following into consideration:

• Does the written safety program appear to have been prepared for the subcontractor or is it an off-the-shelf boilerplate program? Is it industry-specific and does it appear to be realistic for the type of work performed by the subcontractor?
• Does the program designate a person within the company as being the safety director/coordinator?
• Does it assign responsibility for safety to managers/supervisors/foremen and hold them accountable for safety on their jobsites?
• Are all employees required to participate in safety training? Ask for training documentation.
• Are safety meetings and/or toolbox talks held on a regular basis with documentation of the subject, names of participants and the instructor?
• Are jobsite inspections documented and required to be performed on a regular basis?
• Have all employees been trained to perform their jobs safely and does documentation of this training exist?
• Has the subcontractor received any OSHA violations in the past? The inquiry should determine what citations were issued, any corrective action(s) and the penalty. This information can also be obtained from the OSHA website (www.osha.gov/pls/imis/establishment.html).
• Has the company changed its name in the last few years? This trick has been used by some companies to erase their previous record of accidents and violations.

You may want to obtain additional information or establish your own criteria for evaluating subcontractors. Just remember to be thorough and selective and hire only the best and safest companies you can find — even if it costs extra.

If you have to hire a subcontractor, by all means do it, but be sure you know who you are hiring and if they are genuinely committed to safety. Asking the right questions and doing some research about the companies to whom you are subcontracting work will help protect your workers and your company’s assets.

George Kennedy is NUCA Vice President of Safety.