Just about all companies use outside contractors for something - to maintain boilers, service photocopiers or simply tidy up the workplace after hours. Recent activities outside of my general manufacturing background have enabled me to learn some important lessons about the challenges a company assumes when it engages an outside contractor. I would like to share some of these lessons with you. Part 1 of this series will cover the hiring process. Next week, I'll look at how to make the actual contracting arrangements.

General Contractors and Subcontractors

Let's start by defining what we mean by "outside contractor." There are in fact two kinds of entities: General contractors and subcontractors. The distinction between the general and the sub is subtle but important to understand.

The name general contractor is somewhat misleading. General contractors don't necessarily do every aspect of a job. They might not actually do any part of the job. The general contractor oversees the work and makes sure it gets done. The subcontractors are like the troops that perform the work functions. The general contractor hires the subcontractors and directs their work efforts.

Thus, when you hire a contractor, you're hiring not just the general but, indirectly, the subs the general brings in.

The Contracting Function

Hiring and dealing with a general contractor is obviously quite different from looking up a plumber in the yellow pages and then dealing directly with that person when he shows up to unclog your drain.

At larger organizations, hiring or contracting with general contractors is generally the realm of the Maintenance Manager, Operations Manager or person in charge of Engineering. In many cases, the Safety or even the Environmental Manager's involvement is limited to functions such as the negotiation of the Contractors Safety Agreement (if there is one) and (especially for Environmental Managers) oversight of compliance with Air Permit or other regulatory requirements.

At smaller organizations contractors are usually hired by a variety of people or by individuals who serve as the company's jack-of-all-trades. This little dissertation will be, I suspect, of most use to this group.

The Hiring Process

The person or persons who perform the contracting function, regardless of what they're called or the type of organization they work for, must do some homework before looking for a contractor. You should have more than a general idea of the scope of work you want done. There are numerous other details to consider. For example, you might have to check with organizations such as The Better Business Bureau to find out if there are any licensing or permitting requirements in your area for that kind of job.

You'll also need to establish job specifications so contractors can bid for the contract. Contractors are notorious for cost overruns and delays. So you might want to include performance and cost limitations in your request for bids. Make sure contractors provide quotes in writing; verbal agreements are no guarantee.

Ask for references. Talk to people who have used the contractor for similar work. Ask about the quality of the work, the timeliness of completion of the work, the accuracy of estimates concerning time to do the job, the cost and the contractor's availability to follow-up after the work was complete.

You must also be aware of the safety implications of the contracting process and ask appropriate questions to address them. These questions need to address not just the general contractor but any and all subcontractors the general brings in. So don't be afraid to ask the same question more than once.

Conclusion

Finding a good contractor can be as challenging as finding a good mechanic to work on your car. I hope these steps help you improve your hiring process. Next week, we'll look at how to negotiate the contract.

HEALTH & SAFETY LAW TRAVELOGUE

DENMARK

Norm Keith - bio

By Norm Keith, B.A., LL.B., CRSP

The so called "Scandinavian Model" refers to a tradition of cooperation among government, industry and centralized unions. This is a contrast to most of the rest of the industrialized world in which workplace health and safety tend to be divisive and adversarial.

Health & Safety Profile: Denmark

• Population: 5.4 million
• Labor Force: 2.9 million
• Total Accidents: 66,031
• Total Fatalities: 57
• Life Expectancy: 77.44 years
• GDP per Capita: $31,100
• Government Type: Constitutional Monarchy and Democratic State
• OHS Legislation: OHS statute called the Working Environment Act. Regulatory enforcement is moderate. No criminal enforcement.

(Statistics are from 2002)

About Norm Keith

Norm Keith, BA, LL.B., CRSP, is a partner in Gowlings' Employment and Labour Group, specializing in occupational health and safety law, workers' compensation, privacy law, labour and employment law, and alternate dispute resolution. He has extensive experience with wrongful dismissal, human rights, labour arbitration, judicial reviews, Ontario Labour Relation Board cases and fiduciary duty lawsuits.

To view his bio, click here. You can contact Norm by email here or by phone at (416) 862-5699.

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