Indiana University of Pennsylvania Safety Sciences Department Fatality Prevention in the Workplace Forum Managing the Contractor/ Contracted Services Risk Breakout – Best Practice Sponsored by Indiana University of Pennsylvania Safety Sciences Department in cooperation with Alcoa Foundation

Process Flow Pre-qualification & Verification Mitigate Stop Work Deficient Contractor Stop Work -Action- Contract Language Job-Site Monitoring

Contractor Pre-Qualification/Verification Trigger: The pre-qualification process does not always lead to selection of best contractor: 1. Need to select “less than “perfect” vendor 2. Limited vendor pool 3.No choice on vendor selection Examples The process needs to be set-up to manage risk “less than perfect contractors” bring: 1. Additional resources directed to “short list” contractors-paper vs. field review 2. Additional resources directed to deficient contractors 3. Establishing processes to select contractor with “eyes wide open”

Using Contracts to Manage Risk Trigger: Contractors have a limited understanding of the risks they bring on site-either risks to themselves or others(other contractors/host employees) The contract can be used to manage the risk by specifying controls which flow directly from the scope of work. Examples: Pre-task meeting with layers of participation designated. Site safety officer. Site specific safety plan. Audits of compliance (host employer, contractor, joint) Monitored corrective action. 1

Monitoring Contractors While On-Site Trigger: Highest risk is presented during work performance and requires numerous controls to manage the risk Examples 1. Communication processes must be 2-way so that both parties have multiple methods. 2. Monitoring by host employer is “close.” This is done by management level staff as well as employees (Red Scorpion Team). 3. Single point of contact (host employer) is available for contractors. This also occurs during project start-up process. (Can be 1-year+ process.) 4. Publications/materials designed to inform & educate host employees are shared with contractors (ArcelorMitttal). 5. Formal safety meetings are held with all contractors & host employer representatives (annual/quarterly safety meetings/conferences) a. Senior management participation is critical b. Contractors asked to present on topics 6. Contractors utilize self-assessment process for risks (HIRAC) 7. Incident lessons learned are shared with all contractors

Stop Work Authority Trigger: Employees DO NOT FEEL EMPOWERED even though they are trained in stop work program Hazard: Situation where unsafe condition is observed and not corrected by other employees (includes hoist & contractor). Need to “reprogram” thinking that it is OK to exercise stop work authority Contract language Job conditions explicitly outlined in pre-task meeting/JSA Employee “Does Not Feel Right” STOP AND SEEK OUT (Alcoa) Good Faith Assumption - Consequence Free Source: Alcoa, Chevron, Flour Const, Duke Energy and GM 1

Mitigating Deficient Contractors ISSUE: Dealing with contractors who have demonstrated deficient performance: On-Site and Post-Project Processes for dealing with deficient contractor safety performance have been developed in the business units. If a contractor is deficient, management and Health & Safety will evaluate the contractor’s programs and management commitment and then decide to either: Provide mentoring and continue the relationship. Determine if probationary period is appropriate. Suspend operations temporarily. Communicate Duke’s expectations. Discontinue the relationship permanently. Deficient performance includes: Observed performance deficiencies. Violation of Duke’s critical safety rules Fatality or serious injury Fitness for duty concerns. Message or Graphics area Senior management involved - site visits occur Source: Duke Energy 1

Improving Deficient Contractor Performance- Duke Energy Dealing with contractors who have demonstrated deficient performance. Processes for dealing with deficient contractor safety performance have been developed in the business units. If a contractor is deficient, management and Health & Safety will evaluate the contractor’s programs and management commitment and then decide to either: Provide mentoring and continue the relationship. Determine if probationary period is appropriate. Suspend operations temporarily. Communicate Duke’s expectations. Discontinue the relationship permanently. Deficient performance includes: Observed performance deficiencies. Violation of Duke’s critical safety rules Fatality or serious injury Fitness for duty concerns. Message or Graphics area Source: Duke Energy 1

H&S Contractor Management System To ensure all contractors and sub-contractors working perform the job as per the safety and environment management system H&S Contractor Management System Contractor Selection ArcelorMittal Contract Preparation Contractor Management Step by Step program focuses on improving health and safety performance of the contractors and the reduction of lost time incidents and fatalities. This is also the aim of Journey to Zero program. Contract Award Orientation and Training Managing the Work Periodic Evaluation 1

ArcelorMittal Risk Assessment Process HIRAC-lite example (non-routine & infrequent tasks) 20 red (watch-out) boxes available, number of red boxes selected indicated risk profile for the task (note: controls must be identified for each red box selected by the team) 2

Reducing risk through Implementation of Global Safe Permit to Work Program (Koppers) Standardizing required controls for Employees and Contractors who perform tasks within scope of Safe Permit to Work Program Triggering Event – Lack of consistent control measures to manage known higher risk activities, some of which are known to result in fatalities. Fatality involving employees working on burner control equipment and improperly bypassing critical burner controls. Hazard – Various employee and contracted tasks with high hazard. 4

Engaged leadership taking project ownership Company leadership expectations to field managers on roles and responsibilities Triggering Event s– After a series of serious incidents that occurred on a number of global project/plant sites, several members of the top company leadership strategized on how field performance can be improved with both construction and contracted service suppliers. This company is currently engaged with manufacturing operations in over 30 countries and has over 100 ongoing construction related projects throughout the world. In the past year, 5 fatal incidents occurred with contracted service employees. Corrective Measure – Top company leadership representing Operations, Manufacturing Engineering and Purchasing communicated rolls and responsibilities to those having oversight responsibility for managing construction and contracted services. The communication summarized recent incident events and leadership expectations to increase efforts of providing stronger oversight for all high risk work. - Contact Information: Global Health & Safety General Motors Corporation 4

Contractor Safety at United States Steel Corporation Source: United States Steel Corporation 1

Contractor Safety at United States Steel Corporation Discussion Topics S-001 Key Elements U. S. Steel Managements Responsibilities Source: United States Steel Corporation 2

Contractor Safety at United States Steel Corporation S-001 Key Elements U. S. Steel’s standard specification for contractors Sets forth the governing contractor safety responsibilities Contractors must be pre-approved by the Safety and Industrial Hygiene Department Contractors are required to comply with S-001 whenever working on U. S. Steel property Source: United States Steel Corporation 3

Contractor Safety at United States Steel Corporation S-001 Key Elements Establishes a minimum level of contractor safety requirements for all persons working within U. S. Steel facilities Is not intended to provide legal or other professional advice Is U. S. Steel’s legal responsibility to warn contractors of all the hazards (hidden or obvious) that they may encounter Source: United States Steel Corporation 4

Contractor Safety at United States Steel Corporation Source: United States Steel Corporation 5

Contractor Safety at United States Steel Corporation Source: United States Steel Corporation 6

Contractor Safety at United States Steel Corporation U. S Steel Management's Requirements Before a contractor is permitted to perform work inside a U. S. Steel facility, we must: Have U. S. Steel Procurement approval Have Safety Program reviewed by ISNetworld Purpose Ratings Weight on grading Plant protection procedures reviewed and approvals given Attend contractor orientation by the Safety Department Source: United States Steel Corporation 8

Contractor Safety at United States Steel Corporation U. S. Steel Management's Requirements Department Management administers the following PRIOR to start of job: U. S. Steel Contractor Safety Line-Up form U. S. Steel Work Permit Site-specific hazards related to contractor project Source: United States Steel Corporation 9