Magazine Article | July 4, 2009

The Benefits Of Using Contractor Management Safety Programs

Source: Life Science Leader

By Douglas Graham

In today’s cost and quality-conscious environment, outsource companies are employed by pharma to perform a spectrum of duties, ranging from electrical engineering to cafeteria work and on-site child care. Contractor safety programs are created not only to preserve life and limb but to establish a set of rules governing the provider/owner relationship as they apply to responsibility, authority, and accountability. Pharmaceutical companies manage contractors via such programs and, in the course of doing so, help maintain the industry’s quality and safety standards.

“While nearly all major industries employ contractors to a lesser or greater extent, pharma does so in a very big way,” says Robert Sauselein, operations manager, HazTek, Inc. (, an environmental health and safety consulting company in Medford, NJ. “Pharmaceutical companies use contractor safety programs for many reasons, principally because their facilities are often under construction. Everything is changing all the time with new faces coming and going, but safety must remain a constant and an operation’s top priority.”

The perpetual state of construction in which pharmaceuticals live is directly attributable to the nature of the drug business itself. When a blockbuster medication wins FDA approval, labs must be refitted to accommodate its production. Contractors are brought aboard later, their number determined by the scope of the project.

Because pharmaceutical facilities are so large, a great many functions wind up contracted to outsourcing companies, from the technical (machining and other shop skills) to the laborious (roof work, painting, lawn-mowing). While there are many reasons to outsource, two outshine all others where pharmaceuticals are concerned. First, a contractor will almost certainly possess specialized knowledge not shared by the pharma company commissioning its service. The second reason relates to costs. In the right set of circumstances, an outsource company is simply a better deal financially than a full-time employee.

“The payback of a contractor management safety program is twofold,” Sauselein says. “First, it benefits the owner/client, then the contractor itself. An owner wants to make sure the contractors it invites to its site are safety-proficient. But safe contractors are a plus not solely for the reason that with them the potential for personal injury and suffering decreases. Hiring the safety-savvy cuts insurance costs, enhances productivity, and pares to virtually zero the likelihood of accident-related litigation. A contractor management safety program improves morale in the bargain, and fattens the bottom line. People who feel secure get more done and do a better job.”

From the outsource company’s perspective, contractor management safety programs level the playing field because they neutralize the buddy system. Owners with a program in effect prequalify candidate contractors with safety-specific criteria in mind. Does a candidate have its own written safety program? What does its accident history look like? How about its experience modification rate, the value used by insurers to establish the price of premiums? The answers to such questions become the qualifiers by which candidates establish their eligibility or get weeded out of the garden.

Owners reduce a candidate’s qualifiers to numbers, which are then averaged to a single figure. Say, for example, a pharma company decides the standard for a given job should be 9.5. A contractor who squeaks in at 8.4 obviously won’t make it to the next phase. The concept is not fundamentally different from the system banks employ to determine the suitability of loan candidates. Merit, not politics, is the measure by which candidates go forward or go away. Assuming all other factors remain equal, a contractor with a clean safety record will move ahead in the qualifying process, and because the process is fair, he will have every right to do so.

“We make our contractors aware of what we expect of them in the prebid process so they won’t incur catching up costs down the road,” says Art Limper, global manager of construction safety at Merck & Co., Inc. “The process is all about fair play, but it also serves our purposes well and those of our contractors. We see contractors as investments, and contractors view their experience with us the same way. ”

Contractors adopting higher standards via their exposure to an owner’s management safety program receive a couple of dividends beyond an improved ability to land better jobs. Like owners, they enjoy a marked decline in the cost of insurance reflective of improved safety performance. Insurers use experience modification rates to set the price of their products. New companies start out with a rate of 1. The number fluctuates over time. It goes up with accidents, down as accidents decrease. A contractor attaining a value of 0.9 will see substantial premium reductions and will actually become an insurance company asset when incidents drop to the level of none at all.

Contractors also become more proficient at estimating jobs and better equipped to branch beyond the pharmaceutical industry into other heavily regulated enterprise fields such as petrochemical and nuclear. All of this pays fat dividends to pharma companies in the form of better-educated, more-qualified and more-safety-conscious contractor/partners.

“When high safety standards are established and documented, they impact everyone associated with the organization from contractors and subcontractors to full-time employees,” Sauselein adds. “Employees become as accident control-conscious as contractors and with them help build a safety culture that ultimately permeates through the entire organization. So why would a pharmaceutical company want to put together a contractor management safety program? For the simple reason that such programs provide employees and on-site visitors with a safe and healthy working environment. That’s as good a reason as anyone needs to have.”

Merck is a campaigner for the cause of safety. The company is a member of the Construction User Round Table (CURT), a consortium of owners who work closely with major contractors and construction firms, many on the Fortune 500 list. Created to manage construction industry impact through alliance with trade unions, one of CURT’s founding missions has been to upgrade the level of safety of all projects undertaken by the membership. The result was the CURT Safety Blueprint, a manifesto establishing core values, management systems and procedures, and instructions on promoting the idea of elevated safety standards among contractors.

“Each year sees something like 1,400 construction fatalities and between 4,000 and 5,000 private industry accidents,” Limper points out. Due to the high costs involved, lots of contractors go about their businesses with no safety programs at all. That’s a very dangerous state of affairs and the reason that CURT is deeply vested in contractor management safety programs. We actively promote the safety concept with the hope that if we do it enough, more contractors will climb aboard.”

The CURT Safety Blueprint is a collaborative effort to build a safety culture that works for everyone. It sets standards and procedures related to key issues, such as drug abuse testing, safety program management, and the requirement that any contractor bidding on a job meet the experience modification rate established by each member company, which in most cases is 1.

“We review each contractor’s safety program, both to establish that it has one and to make certain its standards mesh with our own,” Limper explains. “Safety is this company’s number one core value, regardless of what a job’s budget happens to be. If, for the sake of safety, we find ourselves forced to compromise cost or scheduling, we gladly do it.”

Safety procedures are arduous even before work begins. After a contractor is awarded a job, each member of its staff goes through a “Pre-Construction Safety Kick-Off,” an orientation designed to put everyone involved in the project on the same page safety-wise. Persons completing the orientation return to their teams wearing a badge certifying they have been officially brought up to speed on Merck’s safety expectations. Next, contractors fill out a job safety analysis identifying activities scheduled for that day, pinpointing risk potentials, and recommending procedures for dealing with them that are consistent with the company’s safety stipulations.

Hardhats, safety glasses, safety shoes, and gloves are required at all times, and according to Limper, to be caught without such accessories is tantamount to being discovered out of military uniform. Offenses do not result in a court martial, but they do result in a sterner-than-usual reorientation on Merck safety regs, followed by a reminder about why each is so important.

“Work begins once you mark off a checklist of steps called for by whatever the task assigned,” he says. “Merck issues permits for individual jobs ranging from grinding to excavation to scaffolding, and contractors are taken through the list to make certain they’ve completed all the steps required. We also have full-time safety managers on duty at most of our sites, and contractor safety managers are there as well. But that’s not all. During the week, the contractors gather for a ‘Safety Tool Box Talk’ addressing a safety topic relevant in most cases to whatever job they happen to be doing at the time. We go over the top for safety, because we want the people working here to go home with all of their limbs.”