OCCUPATIONAL SAFETY AND HEALTH risks related to subcontractors are significant business risks encountered by contractors that employ other contractors (as prime contractors or general contractors). Although OSHA stipulates that "with respect to subcontracted work, the prime contractor and any subcontractor shall be deemed to have joint responsibility" [29 CFR 1926.16(a)] and "in no case shall the prime contractor be relieved of overall responsibility for compliance" [29 CFR 1926.16(a)], the regulations have significant areas open to interpretation. In addition to a prime contractor's moral obligation to provide reasonable care in recognizing and controlling occupational hazards for all employees---including a subcontractor's employees---subcontractor-related safety risks to the prime contractor include:

  • risk of injury- or fatality-related legal actions against the prime contractor by or on behalf of a subcontractor's employees;

  • risk of regulatory citations (by OSHA) to the prime contractor originating from a subcontractor's safety violations;

  • risk of negative publicity and loss of competitive edge because of a subcontractor's subpar safety performance.

Mitigating these risks is an important task of a prime contractor's management team, which should include the insurance, contracts, legal, operations and safety management departments. "Reasonable care" toward subcontractors is a typically prescribed necessary remedy to control the cited risks (OSHA, 1999). Reasonable care involves proper contractual and insurance bases; prequalification of subcontractors; requesting and obtaining qualified and safety-trained subcontractor personnel; obtaining safety planning documentation (such as safety and health programs, site-specific safety and health plans, and job safety analyses); and obtaining competent safety officers with the subcontractor's trade employees. It also involves establishing rules of the game, such as requiring the subcontractor to hold regular safety meetings; providing regular and random safety inspections and audits; and holding regular joint prime/subcontractor safety meetings. The optimal dose of a prime contractor's involvement in subcontractor safety management or oversight (such as a need for a full-time prime-contractor safety manager, the frequency of a prime contractor's inspections and safety visits, and the level of documentation) should be the subject of a careful review. Any remedy should be applied in an optimal dose: too low and it will not be effective, too high and it may become a poison (e.g., potentially exposing a prime contractor to additional liabilities). In the delicate balancing act involving subcontractor safety management, the correct extent of reasonable care is an essential factor (Harrison Steck PC, 2001). To achieve this balance, the prime contractor must establish an optimal level of care over subcontractor safety management programs that includes all contractual, insurance and safety-related elements. The level of control is a critical element because while it helps achieve the necessary compliance, it may negatively affect the prime contractor's liabilities (as more control can mean more liability). Therefore, the strategy is to strive to effectively manage the project safety program without assuming unnecessary liabilities and to find a "golden" optimum somewhere between the total hands-off and total hands-on approaches. Doing so would provide the answers for the prime contractor's companywide or project-specific safety risk management tactics, including the necessary staffing and funding of subcontractor-related safety management programs.

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