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When prequalifying contractors, are your policies robust enough?

U.S. CSB highlights the importance of contractor selection, oversight

Posted July 17, 2018

The U.S. Chemical Safety Board (CSB) released a safety digest outlining the importance of prequalifying a contractor and providing oversight. The CSB conducted several investigations into incidents where insufficient safety requirements for contractor selection were found to have been factors. The digest highlights two of these investigations: An April 2011 explosion and fire that occurred in a fireworks storage facility in Hawaii; and an October 2007 chemical fire in an underground tunnel in Colorado.

Investigation into fatal fireworks explosion

For the incident in Hawaii, the CSB says a federal subcontractor had been hired to dispose of confiscated fireworks. The subcontractor’s personnel were taking apart the individual fireworks tubes by hand and separating out individual fireworks components that are susceptible to ignition from sparks, friction, and static electricity. Accumulated explosive powder was stored in containers in a bunker, which led to an explosion that killed five people and injured one person. The CSB says the explosion was likely triggered by friction or a spark igniting loose explosive pyrotechnic powder spilled or leaked from the storage containers.

In its investigation, the CSB found the subcontractor was awarded the contract to dispose of the fireworks even though it had no prior experience in disposing of fireworks. Instead, it appears the company was selected because of its low bid and promise to finish the job quickly. In addition, the CSB found that relevant federal contracting regulations did not have sufficient requirements for safe practices as well as contractor selection and oversight regarding the unique hazards associated with hazardous materials.

The investigation led to changes in how the U.S. Department of Treasury awards contracts and subcontracts. The Agency now follows rigorous safety-related contractor selection and oversight provisions in contracts with companies that deal with the storage, handling, and disposal of explosive materials.

Investigation into fatal tunnel fire

The October 2007 incident involved industrial painting contractors engaged in recoating a portion of an enclosed hydroelectric plant tunnel with a highly flammable epoxy coating product. Five workers died and three others were injured when a chemical fire occurred inside the tunnel.

The CSB’s investigation revealed that neither the private utility that owned the tunnel nor the painting contractor adequately evaluated the dangers of working inside the tunnel. Neither company had policies or procedures in place to address the hazards of a confined space or the need for continuous monitoring in the work area where flammables were being used.

Further, the CSB found that most of the contractor’s employees had not been given comprehensive formal safety training; effective training on company policies; or site-specific instruction on confined spaces, the safe handling of flammable liquids, the hazard of static discharge, emergency response and rescue, and fire prevention.

Again, the CSB found the prequalification process for potential contractors only considered the contractor’s financial capacity and did not disqualify contractors based on past safety performance. The utility did consider factors such as past performance, quality, and safety records, but still ended up hiring the contractor based primarily on low price.

Among several recommendations in this case, the CSB called on the Colorado Public Utilities Commission to revise its rules regulating electric utilities to require that competitive bidding and contractor selection rules for construction, maintenance, or repair of regulated utilities include procedures for prequalifying or disqualifying contractors based on safety performance measures.

The CSB also recommended the private utility revise its contractor safety policies to ensure that the contractor selection process includes criteria and procedures for prequalifying or disqualifying contractors based on specific safety performance measures. In addition, the utility should require a comprehensive review and evaluation of contractor safety policies and procedures and the safety performance of contractors working in confined spaces.

Finally, the CSB recommended the utility conduct periodic safety audits of contractor selection and oversight at its power generating facilities to make sure they are following corporate and safety policies. The CSB reports the utility has updated its Contractor Safety Program to implement these recommendations.

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