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Bringing Safety & Health to the Bidding Process
Federal, state and local governments are beginning to invest in much-needed infrastructure projects that have the potential to put large numbers of LIUNA members and signatory contractors to work. As bidding for this work gets underway, it’s critical that government officials and other stakeholders have systems in place to find and choose the best contractors for these jobs.
LIUNA District Councils, Local Unions and other LIUNA affiliates regularly encourage project owners to include strong responsible bidder language in their request for proposals (RFPs). These policies help ensure the procurement process is about more than who submits the lowest bid.
“Low-bid contracting continues to be an issue in the construction industry, even though it’s been shown again and again to be a bad deal for workers, taxpayers and owners,” says LIUNA General President Terry O’Sullivan. “When price becomes the only factor, quality of work suffers, some contractors choose not to hire local workers and worker safety is put in jeopardy. Contractors willing to cut corners put the safety and health of workers at risk, and that practice shouldn’t be rewarded.”
The recent passage of the Fair Pay and Safe Work executive order should strengthen best-value contracting, since it requires federal agencies to take the safety record of contractors into account before awarding federally-funded contracts. That’s a step in the right direction, but there is more work to be done. Many state and local governments use some form of prequalification before or during the bid process, but these requirements can vary widely from place to place. And private owners can choose to include strong responsible bidder language in their RFPs or none at all.
How can project owners and responsible contractors ensure that safety and health become a key component of any prequalification or bidding process? The best practices and resources listed below can help.
Create a Measurable Prequalification Process
Prequalification prior to or during the bid process benefits both project owners and responsible contractors. Require each contractor or subcontractor to fill out a standardized questionnaire, preferably one that assigns a specific point value to each item or section. This ensures adequate weight is given to factors other than price, such as safety record, environmental responsibility or benefits provided to employees. This sample Safety Management Evaluation form uses specific safety categories and a clear point system.
There are several metrics that can give owners a better understanding of a contractor’s or subcontractor’s record of and experience with safety compliance. The following information should be required as part of any prequalification process:
- Recordable injury incidence rate for the last three years
- Lost workday incidence rate for the last three years
- Experience Modification Rating (EMR)
- Safety citations, violations or warnings from regulatory agencies over the last five years
This process should go even further by assessing a company’s current and future commitment to safety. Contractors who are committed to safe work should be able to show:
- Written safety and health programs, including hazard communication and substance abuse program policies
- Mandatory safety training for all employees, including specific courses and requirements for both supervisors and new hires
- When regular safety meetings, audits and inspections occur
- Company policy on the investigation of incidents and near misses
- Policies and steps taken to evaluate the safety of subcontractors
Push for Transparency in the Bidding Process
Responsible owners and contractors should consider making the names of bidding contractors or subcontractors publically available, especially if taxpayer money will be used to fund the project. This allows the public or other parties to report relevant information that a bidding contractor or subcontractor may have failed to disclose.
Transparency also gives owners an opportunity to talk to management, workers or past customers about a contractor’s safety history. The same goes for general contractors meeting with potential subcontractors. These conversations can highlight exemplary health and safety programs or reveal issues like the underreporting of injuries or worker exposures to health hazards.
The Future of Responsible Bidder Language
With the recent passage of OSHA’s injury reporting rule, which will make contractor injury and illness data publicly available online, responsible contractors may soon have another tool to show how well they outperform the competition when it comes to protecting workers. Although some in the industry oppose this level of transparency, it should help identify poor-performing contractors who have high levels of OSHA recordables or fatalities. The public spotlight will also provide a strong incentive for continual improvement and give responsible owners and general contractors the opportunity to disqualify contractors and subcontractors who put profits over the health and safety of workers.
A clear, structured prequalification process allows owners and other stakeholders to make better contracting decisions. “When you get a bad contractor on the back end, they’ve already done the damage, and then it’s a costly process of kicking them out,” says Russell Strazzella, a chief construction inspector for the Los Angeles Bureau of Contract Administration. “On the other hand, if you have a very strong pre-qualification system that can be vigorously enforced and a uniform system of rating bidders that is published ... then you get a level playing field and a pool of good contractors.”
For more information on responsible bidder language, visit the National Alliance for Fair Contracting’s website at www.faircontracting.org.
For sample responsible bidder language, see Chicago LECET’s Responsible Bidder Ordinance Information Packet.
The National Employment Law Project report “The Road to Responsible Contracting” includes information on how states and cities can ensure construction contracts deliver good jobs and quality services.