Skip to the main content.

3 min read

How Does Contractor Management Work?

Contractor Management

Contractor management describes the process for managing contracted work assigned by a company (an operator), from contract creation to execution. Successful management systems will maintain a comprehensive database on contractor insurance, training documentation, and administrative controls relevant to a specific project. The primary aim for a contract manager is to bring about continuity between the operator’s qualification programs (OQs), and the contractor’s internal practices.

Developing and implementing an effective operator qualification program is a complex process. Managers must allocate the appropriate resources necessary to maintain up-to-date training plans, consistent qualification records, accountability and compliance supervision, and efficient team communication.

The challenges posed by OQ and safety program implementation are further exacerbated by the involvement of contractors. The Pipeline and Hazardous Materials Safety Administration (PHMSA) provides clear guidance regarding operator responsibility in ensuring contractor compliance: contractors are to be held to the same regulatory standards as operators.

How Does Contractor Management Work?

Operator supervision of an external, contracted body demands complete transparency to guarantee adherence to quality control plans and regulations up and down the project chain. Variables may include:

  • Skill assessments (e.g. OQ tests)
  • Work histories, background checks (e.g. substance tests, driving records)
  • Budget and pay rates
  • Project experience, progress updates, and deadlines
  • OSHA records
  • Contractor insurance

Standardizing contractor performance is a resource-intensive process and presents a significant risk to any business operation utilizing 3rd party services. Operators can drive consistency and best practices in a number of ways. Contractors can be asked to establish and integrate their own proprietary qualification procedures to best match an operator’s qualification practices. Thereafter, operators are tasked with auditing the contractor program for compliance, and validating that it is actively being used. Alternatively, contractors can simply be processed through the operator’s native training programs, or an operator-approved program.

Ultimately, contractors are not required to adhere to an operator’s procedures. However, the operator must verify that any substitute practice meets compliance standards before work may take place. Implementing an effective contractor management system can mitigate the disconnect between operator and contractor qualification protocols.

Risk Assessment and Pre-Qualification

Contractor management is a multiphase process beginning with a thorough risk assessment of the specific project and contractor company. Contracting bodies must be evaluated on a variety of performance metrics – historically and in real-time. Proper integration of pre-qualification procedures is a major indicator of contractor competency, preparedness, and vastly improves project markers pertaining to performance and worker safety.

Contractor Audit

Contractors are required to meet the standards of an operator to verify their competency and performance level. Operators are responsible for ensuring any and all contract hires are compliant with the statutes pertaining to the project. The management system should include audits on a contractor’s internal training plans, safety protocols, and qualification/certification records.

Record Management

Adequate record management provides the data and context necessary for continuous improvement. Careful accounting of performance metrics will indicate trends in an operator-contractor relationship and heighten the predictability of business outcomes while reducing risk.

Energy Worldnet’s Contractor Management Package

Cultivating a coherent relationship between operators and contractors is critical to avoiding project turbulence. The clearer performance expectations are between parties, the smoother a project can run. Crafting and integrating the right systems will improve communication between teams, drastically reduce the paperwork bloat incurred by less efficient documentation strategies, and contribute to a seamless continuity between in-house and contractor operations.

Energy Worldnet specializes in custom contractor management solutions, including:

  • Qualification records – live access and maintenance
    • OQ Plan reviews and rewrites
    • Safety Program reviews and development
    • Drug & Alcohol Program analysis and workshopping
  • Task List Alignment
    • Full-scale, end-to-end auditing services
    • Task and progress monitoring
  • Communication
    • Continuous improvement plans and recommendations
    • Operational monitoring, consultations, and advisement
  • Documentation and records management
    • Electronic management of detailed records
    • Organization of qualification, certification, and training documents

Compliance as a Service (CaaS) Platform Solutions

Complementing our manual consultation services, EWN offers a sophisticated Compliance Management System (eCMS) software. This compliance as a service (CaaS) platform provides access to an itemized database containing in-house and contractor insurance certificates, OSHA records, safety clearances and programs, work histories, payment, and budget information, and other project records.

Both operators and contractors can utilize the software to verify and validate compliance within their organization, and the organizations they are engaging with. The benefit? A 2015 study by Aberdeen Group indicated that compliance outcomes are improved by up to 55% through the use of effective eCMS platforms.

EWN’s eCMS platform structures project data to reduce navigational strains placed on operators and contractors.

  • Introducing a new training plan becomes a matter of updating a single system, rather than frantically drawing up hundreds of new training forms.
  • Worksite security can be assured by employment history monitoring, flagging banned individuals who have switched contracting companies.
  • Strict guidance on qualification testing (and waiting periods on retakes) can be implemented and controlled in real-time, leaving no uncertainty on the record.
  • Contractor competencies can be cross-referenced directly with an in-house OQ plan to assure consistent application of compliance standards.

For more information on how does contractor management work, contact us.