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Improve Buisness Outcomes with Contractor Assessment.pdf

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Improve Buisness Outcomes with Contractor Assessment.pdf

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CQN Training describes the benefits and the basics of contractor assessment that lead to better business outcomes. Leading and lagging indicators are the cornerstones of a two-step process proposed in the article. OHSA compliance, corporate due diligence, and safer worksites are the positive outcomes of implementation. Proactive contract management is necessary in this age of increased use of third-party services. Assessment is a contractor management best practice that proves its worth in better outcomes and reduced risk.

CQN Training describes the benefits and the basics of contractor assessment that lead to better business outcomes. Leading and lagging indicators are the cornerstones of a two-step process proposed in the article. OHSA compliance, corporate due diligence, and safer worksites are the positive outcomes of implementation. Proactive contract management is necessary in this age of increased use of third-party services. Assessment is a contractor management best practice that proves its worth in better outcomes and reduced risk.

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Improve Buisness Outcomes with Contractor Assessment.pdf

  1. 1. www.cqntraining.com IMPROVE BUSINESS OUTCOMES THROUGH CONTRACTOR ASSESSMENT 01 The issue: No or Inadequate Contractor Assessment Means Unmanaged Risk As a global trend, more organizations in nearly all sectors of the economy are outsourcing more work. Currently, contractors fill one in every five jobs in the United States and are projected to make up half the workforce within the next decade. This trend is common across industrialized and emerging economies around the world. There are many elements of due diligence related to occupational health and safety. And contractor assessment is among the highest value activities a purchaser can undertake. Understanding the capacity and competence of your contractor is key to limiting risk and managing for better performance.
  2. 2. 02 Stage two assessment is a more detailed look at a smaller number of pre-screened contractors. Usually, it involves input from several subject-matter specialists within the hiring company, typically representing field management, HSE, quality, contracts, and cost control disciplines. Stage one prequalification actions can include: Implement a formal contractor assessment process that emphasizes leading indicators and measurements of control. Ideally, contractor assessment is done in two stages. This approach saves time by quickly identifying contractors that meet legislated minimum standards and your corporate baseline, allowing a more detailed assessment of those that meet the minimum requirements. Stage one is a high-level look at the contractor's fundamentals. As a contained activity, the primary intent is determining alignment with legislation, incorporating industry consensus standards, and verifying required certifications and licenses to operate. Stage two is a deeper dive into the project, service, or contract specifics. The focus and intent of the assessment shifts more to contractor competence, capability, capacity, and previous track record with similar scopes of work. For example, a contractor with corporate or trade certifications does not automatically translate into consistently well-executed projects and outcomes. How Taking Action Benefits Your Organization: Actions to Take: Assessing your contractors for health and safety capability and competence is an excellent thing to do on its own merit. And, in some locations, it's a requirement under OHS law. For example, the Province of Alberta requires that 'workplace procedures include criteria for evaluating and selecting other employers and self-employed persons at the work site.' This is a duty typically placed on the Prime Contractor of a worksite. By implementing a contractor assessment process, your organization will: 1. meet its legal obligations 2. manage your organization's risk profile down, and 3. improve contractor, hence business, outcomes. www.cqntraining.com Verification of trade or service certifications Verification of basic insurability Assessment of lagging indicators relative to bidders in the same service category: Leading indicators: Experience Modification Rate or Claim Rate Regulatory actions like stop-work orders, citations, or fines OSHA rate DART rate OHS-related litigation, and Regular focused observations of high-risk and high-historical loss work Management and supervisor HSE training Measurable management participation in safety leadership activities like job site walkarounds, town halls, and written communications The pre-work hazard assessments Near miss reporting
  3. 3. 03 Leading indicators are more valuable assessment metrics as they are predictive and give the hiring organizations a more valid indication of contractor OHS leadership and commitment. Incident-focused metrics like OSHA rates tend to draw management attention to a small number of personal injury incidents. Too much focus on a single area of operations can give a skewed view of overall contractor performance. By focusing on the predictive safety measures, the hiring organization gets a better idea of what elements of workplace control will likely be on their projects. Activities at the second stage of assessment: Regardless of whether it's legally required, assessing health and safety systems, capability and capacity is a contractor management best practice. Committing your criteria and process to a measurable standard will assist the organization in meeting its due diligence requirements and improve contractor outcomes. Contractor management is good business. www.cqntraining.com Verify the implementation of leading indicators and evaluate their quality or value to the organization. Consider the details of any events related to citations arising from incidents or inspections by regulators. The intent is to assess if your contractor is actively learning from events and making legitimate efforts to improve business systems. Financial stability metrics like: Previous client references Bankruptcies Liens Judgments or ongoing finance-related litigation Third-party financial and insurance ratings CSR factors (sustainability, resource management, waste management, fairness practices, and ethical standards).

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