What is contractor compliance and how can it be assessed?

Presented by: CQN Advantage


Q:

What is contractor compliance and how can it be assessed?

A:

When an organization enters into a contract with another party to do work on a site that the organization manages, the contracted party becomes a contractor. Whether it be one individual or several, the hiring company has an obligation to make sure that the contracted company meets certain compliance requirements. “Compliance” properly refers to statutory and regulatory requirements, in other words, those that are not voluntary. The term is often used interchangeably with “conformance,” which points more to how practices align with voluntary guidelines and standards. The colloquial “contractor compliance” is usually referring to a bit of both.

Much of the initial work of ensuring compliance can be done when a would-be contractor competes for a contract in a bid process. Supply chain professionals will collect and review all relevant documents, so at least as a starting point, some categories of compliance are already validated. Someone will have the task of combing through submitted documents and assessing how neatly their credentials align with the established requirements.

(Read about Managing Contractors from Start to Finish: The 4 Stages of Contractor Management.)

However, not all work goes up to bid in the first place. When a new contractor needs to be pre-qualified, onboarded and verified, online compliance registries can take on this process on behalf of the hiring company. They award a compliance grade and curate all safety information so that it’s available to the hiring company at a glance.

Whichever way this is accomplished, there are a few key categories in which compliance must be assessed.

Legal Requirements

Depending on the jurisdiction, there are legal requirements that supersede everything else and must be the main priority when selecting contractors. They must be legally entitled to work in the country, must have worker’s compensation coverage where applicable, a business license and insurance or bond. The particulars of the requirements vary from place to place, but ensuring compliance in this category is about making sure your own organization doesn’t wind up in legal or financial peril.

Training Requirements

When hiring a contractor to provide a service, an important initial step is to assess what the contractor will be doing on site, what hazards they will encounter, and what training will they need at a minimum to be able to work safely in the anticipated setting. Usually, training requirements are one of the attached schedules to the tender Request for Proposal (RFP) package, so that each company bidding on the work can review training requirements and ensure their proposed roster measures up. Copies of tickets and certificates should be collected from each individual as required to ensure compliance with the training requirements.

(Learn about The 4 Essential Elements for Ensuring Contractor and Workplace Safety.)

Programs

Finances may be the star of the document review, but contractors should also submit their safety, quality and environmental management systems. It helps if a contractor has already had these systems validated and certified as COR or ISO conformant, as that can often be considered satisfactory in place of the hiring company themselves reviewing the programs. Again, the compliance registries can offer the service of validating safety program materials on behalf of the hiring company.

Ongoing Compliance

The contract being signed and in force doesn’t mean that the contractor compliance is ensured. Diligent companies conduct the ongoing activities of performance reviews, monitoring certificates for validity and auditing safety records as applicable. Monitoring and measurement processes should be established to ensure contractor compliance on an ongoing basis.

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Written by Patrick Robinson
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Patrick Robinson is the founder and President of CQ Network, CQN Advantage, and RISC Management Inc., Alberta-based technology companies that specialize in contractor management and assessment applications.


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