Working with Contractors
Oil and gas contractors are responsible for ensuring that all work under contract meets or exceeds the OSHA standards in addition to complying with the company’s safety and health standards. The contractor is responsible for ensuring safe work performance of employees and subcontractors.
Oil and gas contractors provide a variety of oil and gas services, including:
- wellsite construction and maintenance activities
- utilities and infrastructure construction
- property maintenance
- training and consultation
- installation, testing, calibration, repair, and maintenance of equipment and instruments
All of these work activities must be performed safely and in accordance with the applicable safety codes, standards and regulations.
It’s important that the employer involve communications about safety in all phases of the oil and gas project. From the time the project is conceived until it is finished, safety must be a part of the process.
During the Pre-Award phase, requirements are developed, solicitations are sought, contractors are selected and contracts are awarded. The employer should engage in all of the following key safety-related efforts during this phase:
- consider the contractor's past performance during the contractor selection process.
- establish appropriate safety and health requirements in contract specifications.
- ensure the inclusion of applicable safety and health clauses in contracts.
The Pre-Bid Meeting
In the Pre-Bid meeting, contract safety requirements should be discussed, including:
- site specific safety plan
- designated safety representative identification and requirements
- daily pre-work coordination meetings
- safety enforcement policies and procedures
- drug screening
- identification of potential hazards
- defining hazard control responsibilities
The Pre-Mobilization Meeting
During the pre-mobilization meeting, the following should be discussed:
- Contractual safety requirements
- Site-specific safety plan
- Pre-Phase work plan discussion
- Requirement for daily pre-task meetings
- Requirements for safety talks, and worker and supervisor training
- Confirm assignment of safety responsibilities
The roles, responsibilities, accountability and authority of the owner, general contractor and all contractor personnel should be discussed.
Contractor Selection Criteria
It’s traditional to select oil and gas contractors based on three criteria:
- low bidder
- lower bidder
- lowest bidder who can start now
However, in a world-class oil and gas company that understands the importance of safety, they will not make a decision based solely on cost.
Those companies will use the following criteria:
- Total Case Incidence Rate (TCIR)
- Experience Modification Rate (EMR) of less than 1.0
- past safety performance
- site-specific safety plan development
- key management and worker experience
Experience Modification Rate (Mod Rate or EMR)
Experience Modification Rate (EMR) has strong impact upon a business. It is a number used by insurance companies to gauge both past cost of injuries and future chances of risk. The lower the EMR of
your business, the lower your worker compensation insurance premiums will be. An EMR of 1.0 is considered the industry average. (Source: Safety Management Group).
According to the Michigan Oil and gas Users Council (MCUC), the following EMR chart indicates the relative effectiveness of a contractor’s SMS.
0.30 - 0.71 = Superior – Distinguished results
0.72 - 0.81 = Effective – Impressive results – Obvious commitment
0.82 – 1.04 = Average – Within industry norm
1.05 – 1.29 = Inadequate – Conspicuous past problems
1.30 – 2.05 = Poor – Lack of safety involvement
As you can see, safety is a serious consideration when choosing contractors to work on the oil and gas project. Using these criteria will not only result in selecting a higher level of contractor safety,
it will also result in selecting a contractor that will be more professional in all aspects of the contracted work that will be performed.
Total Case Incident Rate (TCIR)
The Total Case Incident Rate, or "TCIR" is a common method used to report workplace injuries. It is defined as the average number of work-related injuries incurred by 100 full-time-equivalent (FTE) workers during a one-year period. Use of the TCIR to report workplace injuries allow comparison of accident and injury statistics across industries, among industry segments, and from one year to the next.
The TCIR is typically calculated as follows:
For example, if an employer with 500 workers reported 10 injuries in 2013, and workers in that company worked 1,000,000 hours that year, then the 2013 TCIR for that employer would be:
The contractor, the owner, general contractor, project manager, site superintendent, and safety manager, should all have:
- previous experience on similar type oil and gas projects
- previous experience on projects of similar size
- a history of success on previous projects
All managers on the oil and gas site should be competent in safety management. Workers should be competent in the work they are performing. Heavy equipment operators should all be able to show written
documentation providing proof of competency. Also, a trained on-site healthcare provider or nurse should be present on large projects (more than $75 million).
Project designers that are involved in the oil and gas phase should do the following:
- Identify the impact of changes in your design on the health and safety of those involved in the project.
- Provide sufficient information on health and safety associated with your design and planning to those who need it, so they can conduct the necessary training if needed.
- Cooperate and coordinate with the contracted parties, and, where appropriate, other designers/advisers involved in the project
- Provide ongoing advice and information, if requested, regarding the head contractor’s health and safety plan (such as by advising of any changes to planned activities).
- Make sure other designers/advisers and contractors continue to carry out their duties and co-ordinate with others on the project (such as by asking for regular written activity reports or holding site
The general or head contractor on site should do the following:
- Develop and carry out a site-specific health and safety plan.
- Make sure any contractor engaged to carry out oil and gas work is competent and has made suitable provisions for health and safety.
- Obtain and check site-specific safety plans from subcontractors.
- Make sure the coordination and cooperation of subcontractors regarding:
- information and on-site activity (such as site meetings, site procedures)
- appropriate communication arrangements between contractors on site for health and safety
- arrangements for discussing health and safety matters with people on site (such as setting regular toolbox/tailgate meeting times)
- incident and accident reporting
- Make sure training for health and safety is completed.
- Make arrangements to monitor health and safety performance (such as reports, audits and inspections).
- Make arrangements to pass on information from the client or designer/adviser to other contractors and employees (such as activity reports).
- Make arrangements to control visitor access, including such things as delivery of materials.
Each subcontractor on site should do the following:
- Develop a site-specific safety plan for your work activity.
- Identify the hazards of your work, assess the risks arising from them, and tell the head contractor and client about how these risks will be controlled.
- Obtain evidence of the training and competence of your subcontractors and employees.
- Keep the head contractor informed of any dangerous incident or accident.
- Provide the head contractor with the information needed for health and safety management.
- Cooperate with the head contractor and other contractors on health and safety matters.
- Follow any directions of the client or head contractor so that they can meet their obligations.
- Provide information and training to your employees on site.