Contractor prequalification insights
Eight common reasons contractors fall short in prequalification—and what to do next
Many organizations receive a failing grade when they begin to work with any of the contractor prequalification companies at the request of a hiring client. Contractors unfamiliar with the process may be unsure what information is required or how it will be evaluated.
Here are some things you need to know:
Contractor prequalification platforms DO NOT have a single grading system used to evaluate contractors. Each hiring client establishes their own “report card” to rate contractors based on specific requirements that can be weighted differently. This is why you may have an “A” grade with one hiring client but receive a “C” grade with another.
Here are some of the most common deficiencies:
1. Higher than expected injury rates
Why can this be a problem? Hiring clients establish ranges for acceptable injury rates. Your company may be required to provide OSHA data during the onboarding process, and the prequalification system will compare the data you submit with the uploaded OSHA logs. Depending on the platform and hiring client, your company may be evaluated using metrics such as Total Recordable Incident Rate (TRIR), Days Away, Restricted, or Transferred (DART) rate, and lost-time injury rates.
What to do next? Hiring clients may have varying requirements for injury history submittal. I recommend having at least 3 years of OSHA data available, including injury counts and rates, before submitting the data into the prequalification system. Check the math!
2. Safety program review
Why can this be a problem? Depending on the platform and hiring client, your company may be required to have and upload safety programs based on the work your company performs. These written programs may be evaluated for compliance with regulatory, industry, and hiring client criteria. The site may require contractors to answer specific questions about their individual programs and identify where specific information related to the question is located within the document—for example, by providing page numbers.
What to do next? This can be a time-consuming and frustrating part of the prequalification process. Programs may be declined when required elements are missing, unclear, or difficult to locate. Compare your programs against the review criteria, identify the relevant page references, and confirm that the procedures reflect your actual work practices.
3. Certificates of insurance (COI)
Why can this be a problem? Each hiring client has specific requirements outlined in the prequalification system for certificates of insurance based on your work types. These certificates must be submitted into the system and their limits clearly shown on the documents. Each hiring client will also have strict requirements for the named insured, additional insured, expiration dates, and certificate holder information. Any deviation from these requirements may prevent approval and may extend the process.
What to do next? Have your insurance agent, broker, or carrier review the certificate requirements and any required endorsements. Where the platform permits direct submission by your insurance representative, use that option to reduce handling and revisions.
4. Experience modification rates (EMR)
Why can this be a problem? The prequalification system may require you to upload documentation related to your workers’ compensation claim costs compared to industry expected costs. Insurance companies use this comparison to develop a rate that hiring clients use to evaluate your safety performance.
What to do next? Review the EMR calculation and underlying information with your insurance or workers’ compensation representative. Discuss the methodology for determining the EMR and steps your company can take to lower it (if necessary).
5. Questionnaire score
Why can this be a problem? Each prequalification system uses a questionnaire to collect contractor information pertaining to health, safety, and environmental procedures. The prequalification systems grade this section according to the hiring client requirements. Be sure to provide complete answers to questions that can be verified by your written programs.
What to do next? Be prepared for questions related to your safety and environmental policies, training, communication, drug and alcohol policies, subcontractors, etc. Answers to these questions may lead to additional document submittal.
6. Contractor fatalities
Why can this be a problem? A work-related fatality may trigger additional review or disqualification, depending on the hiring client’s scoring criteria.
What to do next? If your company has had a work-related fatality within the hiring client’s required reporting period, I recommend that you prepare corrective action information in advance and discuss this issue with your hiring client contact.
7. OSHA citations/EPA notices of violations (NOVs)
Why can this be a problem? Contractors may be required to provide detailed information related to OSHA citations and federal or state environmental NOVs. Companies that have OSHA citations or environmental NOVs may receive additional scrutiny.
What to do next? If your company has received OSHA violations or environmental NOVs within the hiring client’s required reporting period, I recommend that you prepare corrective action information in advance to discuss with your hiring client contact.
8. Training documentation
Why can this be a problem? The prequalification systems will ask if you provide training to employees related to the work they perform. They may then require you to upload evidence of this training. Without robust evidence, this can be a barrier to approval.
What to do next? Make sure your training documentation identifies specific topics covered in the training, dates delivered, and sign-in sheets for employees that received the training.
Documentation gaps can often be corrected, but historical safety performance may require additional hiring client review, and may not be resolved through a revised submission.
The contractor prequalification process can be overwhelming, time consuming, and extremely frustrating. Many companies struggling with EHS resources find that it is better to outsource this onboarding process than burden their internal staff with a project this large.
If your company needs help resolving document gaps, developing written programs, or managing this process on behalf of your organization, please schedule a consultation with ICCP Contractor Compliance today!
Patrick Ard, CSP
President
ICCP Contractor Compliance
About the author
Patrick Ard is a Certified Safety Professional (CSP) with over 30 years of experience working for contractors and hiring clients. He has extensive knowledge of third party prequalification systems having led teams deploying the contractor prequalification model across multiple sites, and also previously worked as an ISN RAVS Plus Lead Assessor. In addition, Mr. Ard has worked as a safety professional for contractors needing to comply with third party prequalification systems.
This unique experience helps Patrick identify documentation gaps, develop practical safety programs, and guide contractors through hiring-client prequalification requirements.