This document discusses contractor management for a learning course. It covers 5 sections: tender process, licenses and qualifications, permits to work, and workers compensation issues. Key points include developing clear tender documents, evaluating safety considerations in tenders, ensuring contractors have proper licenses and permits, and requiring regular consultation between principal contractors and subcontractors on safety matters.

1. Contractor
Management
Section 4
Tender Process
Section 5
Licenses, qualifications, permits to work
and workers compensation issues

2. Welcome to this HR Learning Course on
Contractor Management
The course has 5 sections.
Each Section has slides.
Some have resources and videos. Make sure that you use all the
resources.
There is an Assessment Workbook for you to complete. This will help you
to understand the most important information. It will also help you
engage with hypotheticals to UP your skills and knowledge.
If you see a key symbol It indicates this is important for your assessment.
If you see a book symbol it indicates there is a resource that is
downloadable accompanying these slides.
Upload your assessment when complete, and It will be assessed by one
of our HR Learning experts. You will also be awarded a certificate of
completion.

3. INSTRUCTIONS FOR
LEARNERS
• Make sure to download the Assessment
Workbook after looking at the two units in this
Section.
• Have a look at the resources.
• Ask yourself- Can I remember what this material is
about? What are the main learning points? Do I
understand the material? How would I teach
someone else this material?
• If you get really stuck. Send your question to
michael@hrlearning.com.au.
• (You must be enrolled in the HR Learning Course
at hrlearning.com.au to get academic support)

4. The Tender Process
• By the end of this section you will be able
to:
• Contribute to developing the tender
document
• Argue for WHS benchmarking during
tender evaluation
• Select contractors for small projects
that have no tender
• Participate in the tender evaluation
process

5. Reasonably
Practicable
• Where the PCBU relies on a specialist or technical
expertise, the PCBU is required to:
 verify the expert has the necessary
expertise for the work
 verify the expert has their own systems
in place for carrying out work safely
verify the expert is carrying out that
work safely as per their own stated
procedures (and not putting others at
risk)
continue to consult co-ordinate and co-
operate with the expert
provide appropriate instruction to the
contractor.

6. Developing the
tender document
• Should you be required by your company to provide
advice for the tender document keep the following in
mind:
1. If it’s not in the tender document then the
successful contractor will not be bound by it.
Don’t make the mistake of thinking that an
item is implied. If it’s not in the tender the
service or item will not be provided.
2. Clarity of language is crucial. So, for
example, rather than talking about a ‘safety
system’ talk about a safety system that has
current WHS policy, consultation policy, safe
work procedures, notification methods, take
5’s. I think you understand. You have to spell
everything out to the exact degree.
3. Ensure that the tenderer’s answers are
evidence based. E.g. if they say they have a
WHSMS, make sure that you see it.

7. Imagine that
you are the
tenderer
1. You want to win the job. It will bring
employment and food on the table.
2. You have to provide the most
competitive quote because you
know that cost will be a significant
evaluation component.
3. How can you keep your costs as low
as possible but still make the
exercise profitable. You can use
cheap materials; use cheap labour;
under quote and then add variances
during works; reduce profit margins;
take on other projects and split time
between to or more projects.

8. Can you see
the possible
safety issues?
• Obviously if the tenderer uses cheap materials this can
quickly become a safety problem. Poor quality
components can increase the risk factors dramatically
by not providing the risk control parameters that have
been calculated. Think about electrical wiring-fire;
weight bearing components-collapse; scaffolding-
collapse (happened recently in Sydney where the
contractor economised on securing bolts on a high rise
scaffold). Cheap labour means people on your site who
may not have the skills and knowledge to do the job
properly.
• Can you see why the language that we use in a tender
has to be airtight? We cannot leave wriggle room for
tenderers to underquote and provide poor materials
and work.

9. WHS Considerations
When will Section 46 Consultation
occur? Who will carry out that
consultation? What time period?
Once? Weekly? Monthly? How will
the consultation be documented?
How will the successful tenderer
inform on notifiables? [S35-39
WHS Act]
Sign on/sign off process
Audits/Inspections by PCBU of
Contractor
Tenderer and PCBU to provide
dedicated “go-to” staff without
notice
Communication formats

10. Consultation
• If you write the requirement for regular
consultation into the tender document,
this makes it a formality which can’t be
waived off during the process.
• Ongoing consultation is important to
ensure that each duty holder is meeting
their obligation, that risks are not arising
and that all processes are being met by
all parties.

11. Notifiables
• It would be hard to accept a Contractor not informing about a death on your site but it’s very
common that some contractors won’t inform on injuries, electrocutions and dangerous
occurrences.
• A worker gets a minor electric shock. He reports it to security, who suggest that he goes home. This
really happened. What are some of the repercussions in that scenario? Are you thinking worker
has a heart attack driving home? Kills some bystanders. Your organisation sued and prosecuted?
No? A WHS expert has to think of worst case scenarios.
• We put the requirement to notify ALL incidents as a part of the tender process. The tender is not a
contract document-however, it does give the tenderer an opportunity to explain how they will
meet our safety requirements.

12. Sign on and Sign off
• You might think that it’s premature to talk about
signing onto site and signing off. However, right from
the get go you are making it clear to the tenderer
that a successful tender does not give them free rein
at your site. Signing on and off is far more than the
contractors signing a book.
• Contractors need to be controlled on your site. They
need to have permission to be at various places. They
also need to wear clear identification that they are an
approved contractor. If your company can afford it
give them a programmable swipe card that only
allows them entry into pre-programmed spaces, that
tracks them and gives the PCBU control over their
movements. No card, no entry. Depending on the
size of your company this kind of system has many
benefits.

13. Audits
• Have a short paragraph in the WHS section of the Tender on
audits. Although you would expect the winning tenderer to
have exemplary WHS your PCBU has the right to ensure that
work is being carried out safely and as agreed.
• Audits provide an evidence based affirmation of the safety
agreements and assurances made by each party.
• The audit will allow you access to relevant safety paperwork
of the contractor. From there you can determine if safety is
being carried out methodically and to the agreed upon
standards.

14. Dedicated “go to” staff
• As the safety representative of the PCBU
it’s important to have a direct channel to a
dedicated person on the contractor’s
team. This means that a relationship can
be formed that allows for clear channels of
communication and rapid response to
safety issues when needed.
• By formalising this relationship the
contractor cannot make excuses for failure
to notify and for not communicating
issues.

15. Communication formats
• When you communicate on safety with
the Contractor will it be written
communication.
• It is suggested that all safety
communication is recorded in written
form. Make this clear to the contractor
in the tender document.
• How do you deal with phone calls?
Make a log of the discussion including
the time, date and content of
discussion. Assume that every
communication that you make about
WHS will need to be represented in
front of a court.

16. Area of
expertise
• The tender document is a place where we will ask the
tenderer to describe their safety systems especially with
regard to their area of expertise. We want to be assured
that we have met our ‘due diligence’ obligations. We
want to ensure that the tenderer will not bring our PCBU
into vulnerability of litigation or endanger our staff.
• Many contractor managers lay down the law on how
they feel the contractor should carry out WHS. They
insist on SWMS’s and other bureaucratic documentation.
The danger is that documentation becomes an entry
permit rather than a real safe work method.
• The contractor should have their own safety system.
They should implement that. Our job is to ensure that
they are meeting their S46 duties and not bringing our
PCBU into breach at any time. It’s a fine line.

17. Competence
• The competence of the contractor and their team should
include knowledge and skills needed to appropriately
identify hazards and deal with WHS risks associated with
the project.
• The tenderer should satisfy you that the team has:
• Education, training, qualifications and experience
necessary to undertake works
• Duties and responsibilities associated with their role
that are appropriate to their experience
• Individual capabilities, including experience, language
& literacy skills
• Correct licenses, insurances and authorities.

18. The finalised tender
You will have written your component part of the
tender and given it to the Project Manager or to the
Company solicitor to look over.
This is an important necessity to ensure that there are
no loopholes. However, remember that you are the
safety expert.
Read through your part of the tender document
thoroughly.
What is your outcome for the tender document? Has
the way that you have written it gotten you your
outcome.

19. Where there is no
tender
• When the required task is small there may not be a
tender document. In this case it can be very
difficult to control small business contractors who
may be coming onto site every now and then to
carry out repairs or installations.
• One form of control is the induction process. No
contractor should ever be allowed on site without
completing an induction. We will talk about this in
more detail in section 6 of this course.
• Also all contractors must sign in and out. Make it
clear that they will be penalised if they don’t sign
in and sign out. E.g. immediate termination of
contract.
• A lot of the safety issues that we have discussed in
this unit can be included in a Contractor Contract.

20. Preferred Contractors
If your organisation is large, having dozens of different contractors doing the
same kind of work can lead to very inconsistent outcomes. Contractors often
have preferred brands of equipment, plant and infrastructure. At one
organisation this meant that the fire alarm systems for different buildings were
all different makes and models. It meant that they couldn’t talk to each other.
Eventually that organisation chose three preferred contractors and specified
which make and model of fire equipment had to be used. It cost a lot of money
to get a modern fire alarm system that could communicate back to a central
point but because of that we were able to prevent hundreds of thousands of
dollars of false alarms each year.
Preferred contractors is one way of managing who does
work at your sites. Issues to watch out for are conflict of
interests; cronyism or other types of corruption. Make
the appointment of a preferred contractor based on
criteria and have at least yearly evaluation of
performance against those criteria.

21. Arguing the safety
message
• Who usually arranges the hiring of contractors at
your organisation?
• You will need to convince that person or that team
that safety should be a key factor in which
contractor to choose.
• Don’t be surprised if that hiring team is
passionately attached to hiring the cheapest
contractor every time. They are just doing their job
the best way that they know.
• Your job is to convince them that cheapest can
often be false economics when the work is shoddy,
poor quality and will fail when it’s put to the test.

22. Evaluating the tender
• Generally tenders will be evaluated
using a points system. Cost will be 40%
Quality will be 25% Past performance
10% Environmental 15% . Add them up.
It leaves 10% for WHS considerations.
Ideally WHS should get a 30% loading.
• The more evolved our company’s
safety systems, the more percentage
points will be given over to safety.
• If you are fortunate enough to be on
the evaluation committee find a pivotal
decision maker and try to get the WHS
percentage up. Good luck.

23. Evaluating the tender
• If you haven’t evaluated tenders before,
you may be shocked by some of the poor
quality tenders that are received.
• For the safety component consider detail.
How have they addressed your
specifications for safety from the tender
document. What is their past history.
Prosecutions? You can look up the
contractor on Google and also on the
Australian Legal Database (AUSTLII).
• Take your time and involve the other panel
members in your consideration so that
they understand why you are making the
evaluation that you are.

24. Evaluating the tender
• The tender process deserves consideration and deliberation. The
wrong contractor can destroy a project.
• When you see a tender that you suspect will act against the interest
of the PCBU and bring the company into breach of the legislation
exercise your veto. Of course, you probably don’t have a veto but
careful use of this imagined veto can be very effective in
deliberations.
• Being involved in tenders can be extremely interesting and
challenging for the WHS professional. Do your research and enjoy the
process.

25. Section 5
Licenses, permits to work,
qualification and workers
compensation

26. Licenses
• Consider the nature of project being undertaken.
• It is not up to you to do the Contractors safety for them. They
are a PCBU and have responsibilities under the Act.
• So when it comes to jobs that involve working with asbestos,
excavation work, demolition work, high risk construction, crane
operation, forklift use and so on, this is squarely the
responsibility of the Contractor PCBU.
• However, there are a few things to take into account.
• Your tender’s safety section should itemise activities that
are part of the project that require licensing. Make the
tenderer/contractor sign off that their workforce has the
necessary up-to-date licenses.
• Make your organisation checking currency of licences a part
of your agreed audit process.
• Section 46 Consultation must take place around the
planning for these activities. Insist that it does before work
commences.

27. Reasonably
Practicable
• Where the PCBU relies on a specialist or technical
expertise, the PCBU is required to:
verify the expert has the necessary
expertise for the work
 verify the expert has their own systems
in place for carrying out work safely
 verify the expert is carrying out that
work safely as per their own stated
procedures (and not putting others at
risk)
continue to consult co-ordinate and co-
operate with the expert
provide appropriate instruction to the
contractor.

28. Confined Spaces
• The law around confined spaces has changed over the
last few years.
• If your project requires workers to enter into confined
spaces on your site, whose duty of care is it?
• For areas that are part of your organisations premises,
the Primary duty rests with your organisations PCBU
and the Officers.
• It is essential that Contractors follow your
organisation’s Confined Space procedures. Entry to the
confined space will be granted by a qualified member
of your staff. Required paperwork will be filled in for
your organisation as a part of your WHSMS. This will
include formal notification that all workers are out of
the confined space and the space is locked.

29. Confined spaces continued
• When there is more than one PCBU…”, each duty holder should exchange
information to find out who is doing what and work together in a cooperative and
coordinated way so risks are eliminated or minimised so far as is reasonably
practicable. For example, a person who owns the plant or structure that contains
the confined space will have management or control of the confined space. A
contractor engaged to carry out work in the same space will also have
management or control of the confined space at the time that work is being
carried out. In these situations, effective communication, cooperation and
coordination of activities between duty holders is essential to ensure that risks
associated with the confined space are eliminated or minimised as far as is
reasonably practicable.” From Code of Practice for Confined Spaces NSW

30. Section 46 Consultation
• The law requires joint duty holders to hold meaningful
consultation on all safety matters. This is a clear obligation
and key to managing contractors. Sometimes contractors will
attempt to laugh this off, or ignore this obligation entirely and
just carry on with work. This is not acceptable.
• Who should be at S46 consultation meetings? Your
organisation project manager or their second, the contractor
or their principal, key sub-contractors, contractors works
specialists, you as the organisation’s safety adviser/manager.
• The meetings should be formal. As they are safety meetings,
you should chair that meeting.

31. Consultation
• As Chair you should prepare an agenda. All
participants/stakeholders should get that agenda with
enough time to 1. Research 2. Add items
• Formal minutes should be taken but NOT by the Chair. Your
organisation may need to allocate a resource to do this.
• Discussions and decisions should be minuted.
• You should attend regular Project meetings as well as these
safety consultation meetings. Arrange with the Project
Manager to have a standing Safety Agenda item where you
report on your consultation.

32. Chemicals
• The same as with confined spaces, any chemicals which your
organisation has stored are your PCBU’s duty of care.
• Section 46 Consultation required before contractors gain
access to those chemicals.
• One real episode involved a construction contractor who
needed to have chemical expertise because they were going
to be putting a vent into a chemical store that contained
chemicals that could kill on accidental inhalation. Chemical
expertise was essential. Contractors turned up to site,
supposed “chemical experts” and had no idea what a deluge
shower was for. Suffice to say work did not continue and that
contractor was replaced. Why? The risk of one of those guys
getting killed was too much for the PCBU.
• Remember, what is your company’s risk appetite?

33. Lock out, tag out
• Your PCBU should have lock out, tag out procedures
established for your site. It’s important to understand, not
only the risk parameters, but also the knock on effect of the
close downs.
• These procedures must be followed by your Contractors.
• At your regular safety consultation meeting, lock out/tag
outs required for a large project can be planned out and
documented.
• This allows you to analyse the lock out/tag out schedule
and determine how to minimise productivity losses in
consultation with your production management team.

34. Hot work
Consult with the contractor. If your company stores flammable goods, gases
or ignitable substances it’s crucial that everyone has adequate information.
Where the risk of explosion or ignition is present; then welding and other
hot processes should only be carried out under your PCBU’s permit system.
A thorough risk assessment should be carried out before work commences.
Control measures and mitigations using the hierarchy of control should be
implemented as required by the WHS regulations cl-36-38

35. Remote work
• Like many of the risks that we have talked about, the duty
of care for remote work at your site is with the PCBU [cl48
WHS Regs2017]
• There is an obligation for your PCBU to provide
communication with remote workers so that assistance can
be provided if required.
• You will need to consult with the contractor and your
security team about establishing this communication.

36. Summary
• You can see that, when managing
contractors on your site, you would expect
them to have sound safety credentials and
safety processes in place. As the PCBU’s
safety representative, you don’t want to
become the safety Nazi.
• Nevertheless, there is a lot of duty that falls
onto the PCBU not just the contractor.
• You will need to be an expert communicator
who is well prepared with an understanding
of the legislation, WHS processes and a
thorough knowledge of your organisation’s
WHSMS.

37. Hypotheticals
• A worker and an apprentice were waterproofing a small room
at our site, when it appears vapours from an adhesive and
solvent ignited. The small room they were working in was
engulfed in a fire ball, resulting in burns to 55% of one
worker’s body, and 45% of the other’s body. Both workers
were transported to Royal North Shore Hospital.
From SafeworkNSW Website
• Who has the Primary duty of care in this instance?
• Consider the ignition source? SWMS? Risk Assessment? How
could have the ignition source have been controlled?
• How would you prevent an incident like this occurring during
your project?
Have a think about this and answer Question 6 in Section 3
Assessment Work Book.

38. Hypothetical
• A worker has fallen approximately 8m into a lift
shaft while working on the refurbishment of a
building in Sydney. The worker was removing
timber rafters from a roof frame when he fell and
sustained serious injuries.
From SafeworkNSW
• What are some ways that this tragedy could have
been prevented?
• How could you address this scenario in the tender
process and in the section 46 consultation
process?
• Have a think about this and answer Question 7
in Section 3 Assessment Work Book.

39. This ends this section
of the course
Proceed to section 6