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3. Contractor selection and negotiation of terms

Principals are required to give and receive information on hazards at the tendering stage, whether or not pre-qualification is used. This will normally take the form of the principal requiring tenderers to complete a health and safety questionnaire or checklist relating to the specific hazards of the contract, along with other tender documentation. This information is combined with any other gained from pre-qualification.

Where pre-qualification has not been used, the principal will also need to gather information that allows assessment of the general competence of the contractor to manage health and safety. A decision to accept a tender cannot be based on price if it is at the expense of adequate provision for health and safety. It is also worth remembering that a tenderer's health and safety record may well be indicative of its business efficiency and reliability as a contractor.

The principal has a responsibility for contributing to hazard management
The principal should identify and describe hazards related to the contract with the tender documents. They should also indicate, for example, whether work is to be done when its employees are absent, any areas that need to be demarcated and kept clear, and other similar information. For a suggested format for an "information for tenderer" document, see page 34. The principal should also stipulate safety standards in advance, where practicable.

Example

Tender documents should outline arrangements to enable the contractor to work within the principal’s health and safety management system (e.g. explaining and agreeing on appropriate points of contact and named individuals for reporting and monitoring progress).

The contractor will also be expected to describe their hazard management processes, and identify specific hazards which the principal may not be aware of.

Hazard assessment will include a competent examination of what could cause harm to people or other damage, in order to weigh up whether enough precautions have been taken, or if more should be done to prevent harm. Often the principal, contractor and any subcontractors will need to discuss jobs together to ensure the necessary information is available. Job registration provides a typical checklist for such discussions (see page 49). More formally, permit-to-work systems are often used in high-hazard situations. These are specific, formal procedures used to control hazardous work (e.g. entry into confined spaces, hot work, plant, electrical work, and pipeline breaking).

Example

In a controlled situation, permit-to-work systems may provide the most effective means of a principal managing exposure to significant hazards by contractors, employees and others. They are an essential feature of safe systems of work in many maintenance activities. For example, a principal was held liable when a contractor’s employee was burned by an electrical flashover after exercising uncontrolled access to switchboard equipment that required controlled access and a permit-to-work.

Part 2 of A Guide to the Health and Safety in Employment Act 1992 has more information on hazard management requirements.

3.1 Including project health and safety information in the tender

This information describes known health and safety hazards and issues to be managed for a specific contract. It is generally issued with, or included in, the documents. It describes tenderers' minimum obligations with regard to health and safety, and enables allowances for health and safety to be factored into their tender.

The information for tenderer document can be used as key material in the process of tender assessment, raising specific health and safety issues to which tenderers respond to in their tenders. These responses in turn need to be considered by the principal in making a judgement as to whether potential contractors have both adequate provision for health and safety, and are competent to carry it out.

Those preparing the project health and safety information (whether the principal, or an agent such as a consultant engineer or architect) will need to determine its most suitable format. The project health and safety information should be drawn up to require specific responses to issues. There is little advantage in only outlining hazards or risks. What is needed is the contractor's responses to how they will manage them during the work in terms of elimination (where practicable), isolation (again, where practicable) or minimisation (if elimination and isolation, respectively, are impracticable). The contractor's responses to the information for tenderer document will in turn form the basis of the health and safety plan for the project.

The main purposes of the information for tenderer document are to:

• provide a focus for bringing the project health and safety issues and the design to the attention of parties
• enable contractors submitting tenders to be fully aware of the project's health and safety requirements
• provide a benchmark against which the tender submissions can be measured, and
• provide a basis for the development of the contractor's health and safety plan for the project.

The information will mainly come from:

• the principal, who provides the contractor with information relevant to health and safety, such as existing drawings, surveys, a description of hazards known specifically to them, and their own health and safety requirements, and
• designers/advisers or agents of the principal, who provide information about the known hazards which will have to be managed by the contractor.

Subjects for inclusion in the ‘information for tenderer’ document

The degree of detail required, and the size and format of the information, will depend on a number of factors such as the nature of the work or project, types of foreseeable hazards, potential risks, and other requirements of the principal.

Obviously, some items listed below will not be relevant to all contracts. Work with minimal risk calls for simple, straightforward approaches. On the other hand, large projects involving significant risk will require more detail. The health and safety information provided should be specific and tailored to the contract, and the needs of those receiving the information.

Conveying the tender information

Health and safety information for tenderers can be included in tender documents in a number of ways, depending on what is appropriate. It can be included as part of the specifications for a project, as a totally separate document, or as a documented discussion with potential contractors on particularly small jobs. The key point is it needs to be appropriate to the project, so health and safety requirements are effectively built into tender documents and the project in some form - addressing health and safety from the beginning of the process, clearly defining and acknowledging the safety requirements in the tendering and award process.

Template for an ‘information for tenderer’ document

The template below will help the principal record job details and related hazards, as preliminary information for the contractor. The form may be completed by the principal either before, or with, tender documents. It provides an example only, and indicates the likely content and format of such documentation. Some of the information will be intrinsic to other tender documentation, but wherever possible it should be made clear as a matter of health and safety.

Subject	Information required/expectations
Tender title Ref no:
Description of job/project	Description of job/project Describe the nature and extent of the project (location, type of work, timetable, performance standards, etc.) Outline the design of the project as required for the tenderer to be aware of all the health and safety issues involved. This may include information on the project beyond the scope of the work being tendered for.
Site/place of work	Describe the site/ place of work with regard to location and relevant issues, and including such factors as provision of services, existing or coinciding uses, adjacent premises, access and traffic systems and restriction, ground condition, atmospheric conditions, etc (e.g. underground services, drains, overhead lines or cranes, machinery or vehicles, work at heights, electrical or chemicals hazards, etc).
Materials/equipment to be used	The description need not repeat the tendering specifications, but should draw the tenderer's attention to any particular materials or equipment that presents health or safety issues. This includes materials, equipment or plant supplied, or specified by the principal and to be used/installed by the contractor (e.g. flammable, toxic, substances, heavy and/or bulky items).
Hazards relevant to the job	Detail the hazards likely to be associated with the job under tender. Hazards described may be proximate to and not necessarily part of the tender itself.
Work processes	This includes, for example, welding/hot work, electrical, confined/restricted spaces, working at height, proximity of overhead wires or cranes, excavation, or demolition.
Special requirements	Is there provision for the health and safety plan to be incorporated into an existing health and safety plan for the site? What other site-wide factors are there (for example: are there any special client needs such as access for school children, elderly or disabled persons in the vicinity; the positioning of the site access or exit points; location of unloading, or layout and storage areas; temporary site accommodation; traffic/pedestrian routes and so on)? Detail any restrictions on working hours, vehicle access, difficult or restricted access to work area, permits to work, requirements for hazardous substances or work environments, emergency procedures, provision of barriers or signs, and any health surveillance/medical.
Other information provided by the principal
Design information or specification documents	Available? Yes . No . Provided? Yes . No. Detail the relevant information that is available to the tenderer.
Drawings	Available? Yes . No. Provided? Yes . No. Detail the drawings that have been prepared by the principal for the tender, and any pre-existing drawings, plans, specifications or other documents that are relevant. Provided with invitation to tender? Yes . No .
Principal's rules for contractors	What site rules relating to the principal does the contractor need, such as emergency procedures, permit-to-work rules and so on, when work takes place at the principal's premises? Will there be any overlap with the principal's own activities during the project, particularly where work is to take place at the principal's premises that might be occupied?
Emergency procedures	Describe the principal's emergency procedures for the site/ place of work. Detail the emergency procedures required of the tenderer to resolve any anomalies or points of conflict.
Contact and liaison	Describe a process for liaison and co-ordination for health and safety that is appropriate to the project. Include a delegate for multi employer site meetings as appropriate. Include a procedure for dealing with design changes after the work has started. Detail the responsibilities for notifying work or reporting accidents or serious harm to the Department. Provide details of how the work methods are supervised, and who will be responsible for supervision. Name of tenderer's contact employee: Senior manager: Tel:
Completed by	Name: Position: Contact details: Date: Signed:

3.2 Tender review, evaluation and contractor selection

Tender submissions (or pre-tender documents) should be received, evaluated and assessed by the principal to ensure potential contractors have complied with the tender documents, including the requirements relating to health and safety for the project, and are competent to carry out the contract.

3.2.1 Assessing health and safety competence

Assessment of the appropriate level of health and safety competence is an important element of contractor selection and appointment. To be consistent and fair, the principal needs to give full consideration to the information gained from tenderers at the pre-qualification and/or tender stages.

Where possible tenderers should be advised in advance of essential conditions required before they are considered competent to complete the contract.

The principal should evaluate the tenderer’s ability to manage specific issues contained in the information for tenderer document or otherwise provided by tenderers. The level of detail required for a decision will depend on the nature of the project and risks involved.

Compliance with health and safety requirements must be a precondition to any tender being successful. Where there is any deviation from required standards, these should be addressed before acceptance of the tender.

Past performance in health and safety is a significant issue, but should not be the only consideration. Also competency assessment should not be limited to one deciding factor, particularly tender price. The courts have made it clear that safety is just as important as tender price when entering into a contract. Issues that focus on the health and safety requirements for the project need to be raised, and answers sought.

3.2.2 Capability

Principals to contracts will be expected to judge the capability (or competence) of contractors where this is critical to safety. In order to do this, they will judge the health and safety capabilities of short-listed contractors according to information about the:

• contractor's management systems and practice
• contractor's experience in the type and complexity of the work to be carried out
• contractor’s resources in relation to the work to be completed
• extent to which the risks of the contract will be minimised by suitable precautions.

This may be based on information gained through the pre-qualification process, but companies will often develop permit systems tailored to the particular tasks and hazards their contractors will encounter.

Accreditation under sector specific, ACC or other health and safety management programmes are a useful indicator of performance, but should not be the only measure of health and safety capability. Instead, assessment should be made with reference to particular hazards and processes.

However, principals themselves will need to have the appropriate training and competence at least to the level of being able to exercise good judgement.

Subcontractors will usually be expected to meet selection criteria which match those used for selecting the main contractor.

The competence of individuals will usually need to be assessed
Individual competence is judged according to a combination of training and experience.

The contractor's managers and supervisors will need to demonstrate they have received adequate health and safety training for managing the work, and have access to appropriate competent advice.

Health and safety certificates of competence or "passports", such as those issued by Site Safe in the construction and retail sectors, provide another source of evidence regarding appropriate basic training and competence in a particular industry or setting. Health and safety representative training is a further indicator of awareness and consistency in the contractor’s workforce.

3.2.3 Key considerations in selecting contractors

In summary, notwithstanding the above considerations, in selecting a contractor the principal should consider the candidate's ability to manage, implement and monitor health and safety procedures, including:

• insurance and accident compensation ratings
• compliance with standards
• associations/accreditations
• health and safety experience
• policies and procedures
• subcontractor selection and management
• organisation and arrangements (including assignment of responsibility for health and safety issues, employee participation, etc.)
• information, training and supervision
• planning and setting performance standards
• hazard assessment
• accident reporting, recording and investigation methods
• performance monitoring processes
• review methods, and
• safety record.

3.2.4 Subcontractors

Principals are advised to also monitor the selection of subcontractors. In some situations health and safety requirements, such as a permit-to-work system or particular hazards, may mean the principal nominates particular subcontractors as a condition of the contract.

The selected head contractor will need to supply potential subcontractors with information about the project, the site, relevant parts of any existing health and safety plans, and any other relevant information. Much of this information will be relayed from the tendering or pre-tendering materials supplied by the principal, and includes:

• arrangements for the health and safety management of the project
• monitoring arrangements
• workplace/site rules and procedures (such as wearing personal protective equipment, training or competency requirements)
• processes for giving information and improving health and safety management in the workplace, and
• procedures for further subcontracting.

Requirements for health and safety need to be made clear at the pre-tender and tender stages. This means tendering contractors — who are in fact principals themselves in relation to subcontractors — have enough information to ensure site-specific provision for health and safety is included in their own tender submissions, demonstrating they are competent in health and safety matters relevant to the project.

It is a truism that in all tendering situations, price is only one factor and a low contract price does not necessarily lead to value or efficiency in the performance of the contract. The courts have made it clear cost savings or time reductions should never be sought at the expense of safety. Many section 18 prosecutions have concerned cases where unsafe practices arose from perceived commercial pressures.
Health and safety being overlooked can lead not only to accidents and injuries, but also delays, difficulties, and increased costs that may be borne by contractor and/or principal.

3.2.5 Evaluation

Principals need to ensure that:

• tenders are assessed by those with skills and knowledge relevant to the health and safety requirements of the project
• tender evaluation includes adequate consideration of health and safety requirements
• adequate time is allowed to assess the health and safety requirements of tenders
• the proposed schedule for the project would not adversely affect health and safety
• the health and safety performance of potential contractors and organisations tendering for the work has been adequately assessed, and
• all tenders are thoroughly reviewed, benchmarking the potential contractor's health and safety competence against tender requirements.

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