Managing the Safety Risks of a Construction Contractor
Very few construction contractors self-perform all of the necessary trades to complete a project. A general contractor (GC) is commonly hired by an owner to coordinate construction and self-perform some but not all of the necessary work.
For instance, a GC may complete just the concrete work for a commercial building. To do this it employs cement finishers, carpenters (to build the cement forms) and laborers (to assist with material handling, and odds and ends). A construction manager contractor (CM) is one that oversees all aspects of construction but does not perform any of the work. A CM usually supplies just a superintendent to run the field operations and a project manager to manage the construction schedule and budget. All of the craft work is sub-contracted.
Both a GC and a CM therefore depend, either in part or wholly, on sub-contracted services. Sub-contractors provide workers to complete such things as electrical, plumbing, mechanical, earth moving equipment, sheetrock installation, etc. The GC and CM contractually employ the sub-contractors and are responsible not only for monitoring their work production and quality but also adherence to the project’s safety requirements.
This is where things get interesting from a safety standpoint. Contractors have much better success controlling the safety outcome when they employ the worker. They are able to train an employee based on specific hazards and communicate expectations more thoroughly. Taking disciplinary action is also much easier when a person works for you rather than someone else.
Although an injury to a sub-contractor employee does not show-up on the GC’s or CM’s OSHA log, an owner does not want to employ a contractor that injures (or kills) workers. Additionally, OSHA has the ability to issue citations to not only a non-compliant sub-contractor but also its controlling employer, the GC or CM.
Managing the Safety Performance of a Sub-Contractor is No Easy Task
The old adage of “you get what you pay for” is true in the construction world. It is well established that there are A, B and C level sub-contractors. “A” performers run very solid safety programs and need little attention or oversight—they are nearly always compliant. “B” performers need a moderate amount of “baby sitting” when it comes to safety. You may have to ask/tell them once or twice but they get with the program quickly. The “C” performers need lots of attention and are constantly taking risks and have a poor understanding of the value of safety. “C” sub-contractors have little base safety knowledge and consume a ton of a superintendent’s valuable time managing the project. The difference in the safety performance between an “A” and a “C” sub-contractor can be night and day.
The flip side of this equation is that “A” level sub-contractors can cost nearly twice as much as a “C” sub-contractor. Herein lays the problem. To remain competitive in the marketplace a GC or CM may need the “C” sub-contractor pricing. Employing “C” sub-contractors opens the GC or CM up to considerably more risk and places a large burden on the superintendent and project manager. Frustration in “playing the cards they are dealt” is often felt by the superintendent and project manager as they are removed from the sub-contractor selection process and their performance is in part measured on the overall safety record for the project.
Striking a Balance
Enter the business model and values of the owner and senior leadership of a company. If you know that a “C” contractor presents considerably more risk based on its safety track record, do you hire them to win a project? If it were you’re company, how do you strike a balance between remaining competitive and delivering a safe work product? Consider the following:
- Do you manage this risk with agreement language by specifying safety requirements and shedding liability? Most often the words in a contract do not get to the field and yield greater safety performance. Where contract language can have an effect is the prohibition of sub-let work. Take the case where a sheet-rock sub-contractor hires his/her sub who in turn hires his/her sub to actually perform the work. Often times when work trickles down the quality of safety diminishes considerably.
- Do you look at the sub’s insurance policy coverage to make sure bonding, building defect, general liability and other necessary insurance tools are in place and have adequate limits? Does that help drive the safety outcome? Most often times not.
- Do you provide additional resources to your superintendent to help manage safety on the job? This could be in the form of hiring a site safety professional—that just eats-up a big chunk of the project’s profit.
- Do you take a hard-nose stance with the sub-contractor about safety and send workers home for violating site safety requirements, or dismiss the entire sub-contractor? That throws your production and schedule way out of whack. Remember, the owner wants his/her building by a specific date or you may be forced to pay liquidated damages.
- Do you mandate weekly tool box talks, daily task-planning, proof of training by submitting certificates, etc, to hold the sub accountable? If so, who verifies all of this and tracks completion?
There are no easy answers when it comes to managing contractor safety risks. Much is tolerated for the sake of earning a living. However, the last thing a GC or CM wants is a news crew showing their company job banner on TV following a serious injury or fatality. Experience tells us that the safety outcome is most often a good when production, quality and safety are maintained in equal balance (both valued and allocated resources). When a company starts to compromise their safety effort for production, due to a schedule delay or for the sake of pursuing profit, bad things usually happen. This approach may mean success today but eventually it will catch up to the contractor.