The topic of H&S pre-qualification came up a while back on the Forum and generated quite a bit of heat! Here is the earlier thread.

That's why I saved it till last...

The temptation is to hide behind it, when what we should be doing is far more active management of this brand of "worker". — Simon Lawrence

Having seen some of the larger Civil Engineering companies "out source" this aspect of their operations to third party pre qual operations, who then make a buck out of charging both the principals involved, and subbies,with nothing changing except more cost and time spent shuffling existing paperwork such as Insurance Certs for the poor subbies, who have most likely had their payment terms pushed out to 60 or 90 days, and can't afford to list with every random pre qual agency- bah humbug

Pre quals are only to the benefit to the provider as they are making money from us the suppliers when we provide the information, and charging the customer to use the information. My understanding of pre quals when they first kicked off was that they were to streamline the passage of information and make the process easier, but I have found that this is not the case. I now need to do 8 differing prequals based on who our customer uses... and now I understand that there is another in the wings CHANZ

We use prequalification simply as one of a whole range of tools. The prequal is not site specific but does give us some degree of confidence that we are awarding work to subcontractors that can evidence relevant systems for managing their own risks.

Great read, thank you Simon.
I have a similar opinion to Craig in relation to using pre-qual, if a contractor provides a copy, great but they still need to provide evidence to Us (Organisation) of how they intend to do the job and how they are minimizing the risks to others in our workplace. I feel that all the pre-qual provides us is confirmation that when the contractor was assessed their ducks were lined up, but that doesn't mean they are still lined up 6, 12, 18 months later, the ducks move. it can be useful but I do not see it as a prerequisite.
I believe for most organisations Contractors are the most awkward risk to manage.

"When the contractor was assessed their ducks were lined up". Nope All it shows is that they had a good system of documents. Since neither Prequal nor Sitewise gets off their rear ends and actually goes out to where it matters: on SITE! - good documents is ALL it shows. Unlike accounting, where faulty documentation means something significant, inadequate h&s documentation means very little. Apart from TAs, Training and Competency, and pre-start toolbox talks the rest is not indicative of anything but an ability to create endless mostly useless documents and ALL OF IT can be created, managed, successfully uploaded for high prequalification success by someone sitting in an office with a keyboard. (Working for an organisation who doesn't understand 'lean and keen' and is HAPPY to employ more admin. staff.)

For example: "Sub contractor pre-selection documents"? Oh please! Unless there some huge bureaucratic ineffective communicating, overspending monolith that HAS to send documents across an office rather than speak, this is how it usually goes and it's perfectly effective with good, knowledgeable personnel:
QS to Site Manager: "what was the scaffolder like?" Site Manager: "Yeah, good bloke. Worth getting again."

While you need to have a system to measure the competence etc.of your contractors, I don't think these large formal and expensive prequalification systems have saved anybody's lives.

Since neither Prequal nor Sitewise gets off their rear ends and actually goes out to where it matters: on SITE! - good documents is ALL it shows — Jan Hall

Be nice if there were only two Jan a couple of years ago it seemed like every second emailwas an invitation to register with our preferred "prequal company" at varying degrees of cost, one of our big clients decided that they were going with a US based one, $2,300 for me to register our business with them, plus the time taken to jump through their hoops, I just said "no thanks", it meant kissing goodbye to $35K worth of work PA. In the end, a lot of their subbies revolted and gave them the advice that involves sex and travel, and they backed down and went with SiteWise. Much more cost effective, but you are totally right, no boots on the ground to confirm that practice matches documentation.

While you need to have a system to measure the competence etc.of your contractors, I don't think these large formal and expensive prequalification systems have saved anybody's lives. — Mike Massaar

It's more a butt covering exercise from my observation, than anything to do with life saving

Might have missed the bus here, but in case it's still useful:

H&S PQ is a good example of 'demonstrated safety work' (Rae & Provan, 2019).

It's the very first (and least important) stage in a Supplier Selection Process. It really only can assure the buyer of services that the suppliers who are able to tender for work have an appropriate H&S management programme (suitable and sufficient for the type of business they are).

Research shows that work-related accident and fatal accident rates can be significantly reduced by implementing a suitable OHSMS (Yoon et al. 2013).

A written and comprehensive H&S management programme is effective in helping reduce H&S risk for construction businesses (Hallowell and Gambatese 2009)

Investment in a suitable H&S management programme is shown to be a good investment (Bayram, Ünğan, and Ardıç 2017)

The attention created by the adoption of a management programme opens possibilities for giving priority to key OHS issues in the business (Uhrenholdt Madsen et al. 2020)

Using system levers to require businesses to have a structured and proportional H&S management programme tends to have positive safety benefits (Frick and Kempa 2011)(Frick 2011)

The problem is that pre-qualification processes are overcooked, overcomplicated, expensive, confusing, and bureaucratic.

Prequalification is the 'ticket to the dance' - 'getting a date' is a different conversation and where the energy and effort should be.

Tōtika has been developed to de-clutter H&S Pre-qualification in NZ and move the conversation forward.

References:

Frick, Kaj. 2011. “Worker Influence on Voluntary OHS Management Systems – A Review of Its Ends and Means.” Safety Science 49(7):974–87.

Frick, Kaj, and Viktor Kempa. 2011. Occupational Health and Safety Management Systems: When Are They Good for Your Health? Brussels: ETUI.

Hallowell, Matthew R., and John A. Gambatese. 2009. “Construction Safety Risk Mitigation.” Journal of Construction Engineering and Management 135(12):1316–23.

Rae, A., & Provan, D. (2019). Safety work versus the safety of work. Safety Science, 111, 119–127. https://doi.org/10.1016/j.ssci.2018.07.001

Uhrenholdt Madsen, Christian, Marie Louise Kirkegaard, Johnny Dyreborg, and Peter Hasle. 2020. “Making Occupational Health and Safety Management Systems ‘Work’: A Realist Review of the OHSAS 18001 Standard.” Safety Science 129:104843.

Yoon, Seok J., Hsing K. Lin, Gang Chen, Shinjea Yi, Jeawook Choi, and Zhenhua Rui. 2013. “Effect of Occupational Health and Safety Management System on Work-Related Accident Rate and Differences of Occupational Health and Safety Management System Awareness between Managers in South Korea’s Construction Industry.” Safety and Health at Work 4(4):201–9.

I acknowledge the academic theories used here to justify Tōtika and other Prequal schemes, but when it comes down to practicability I think Simon has summed it up nicely. One could provide a set of no more than 12 contractor due diligence questions for businesses engaging contractors that would achieve the same outcome at no charge. The PCBU simply has a duty of due diligence in selecting a competent contractor and applying the 3 C's on the job based on who is in the best position to manage which risks. Just putting it out there for comment????

The PCBU simply has a duty of due diligence in selecting a competent contractor and applying the 3 C's on the job based on who is in the best position to manage which risks. — Tony Walton

And somebody saw the opportunity in the market to "take care of that" for PCBUs (for a small fee of course) - then more and more companies jumped on the pre-qualification bandwagon... which lead to the creation of Tōtika to solve the issue of "contractors requiring to retain multiple pre-qualification certificates".
While this is a solution to the identified problem, I do wonder, like you , if looking at this wider as a "how can we do tenderer selection better in NZ?"
And to be honest a "Yelp, but for contractors" could probably be more beneficial to NZ... although that would be ripe for abuse if it was just an open feedback format!

Fortunately for me, the "joys" of prequal systems are becoming a distant memory, who has signed up for Tōtika ? Is it living up to the promise of de-cluttering H&S Pre-qualification in NZ?

From my experience, I agree with Simon's take.

In other organisations I've worked, in NZ & overseas, the Contractor H&S Assessment was a procurement function and carried out as part of the contractor engagement internal process. Once the contract was in place the H&S performance was handed over to the contract manager. As H&S team we assisted with the performance audit & report. We didn't use Pre-Qual providers.

S Signed up for Totika but unfortunately Kainga Ora don't currently recognise it so another prequal was required to be added to the ever growing and getting more expensive list. Well done for getting off this treadmill.

Quite apart from the cost, the time taken to answer much the same questions and send off copies of documentation, insurance certificates wound me up. How did you find the process and cost for Tōtika Denise?

Really good Steve. No issues with Totika but unfortunately not widely recognised yet by Clients or potential Clients.

Hi Tony, Great comments.

To clarify the references I provided don't actually justify pre-qualification, they provide evidence that OH&S management systems do provide benefits to safety. Pre-qualification can be a way to gain assurance organisations have OH&S management systems, but there are likely better ways to do that.

The papers referenced are not models or theories (except 1). They are peer reviewed scientific papers that provide evidence for the principle being discussed. I would be delighted to send you copies of the any of the papers referenced if you would like to read them. I would recommend in particular Rae et al. (2019) as it offers a model that supports the perspective you have raised.

On your proposal:
If 12 questions are provided to suppliers, who decides what the 12 questions are?
Who pays to assess the answers to those questions?
How would they be assessed?

Totally with you Matt.

The reality is that system change is difficult to achieve and must be incremental to allow everyone to move at a pace they are comfortable.

We all know the current situation is poor, there are lots of people with ideas about what could be done instead, but none able to articulate how the change can be practically achieved.

Tōtika is there to provide an opportunity for the system to incrementally shift to something better (once we know what that is); the reality is, we can't wave a magic wand and move to utopia - noone would like that even if we knew what utopia is.

Science has been telling us that TRIFR's are statistically not significant and not a measure of safety, but a poor measure of productivity for more than 20 years. Most seem to be still doing that too.

They are working on it; most recent information is early in the new year :-)

A few of our current clients have finally moved from the $4,000+ per year overseas based company and gone to Tōtika. It wasn't easy to say we are not paying the bill and not needing their service anymore. They wanted to talk to other "Managers" in the company, as "Co-ordinators or Advisors" are not good enough to cancel their membership that we no longer need.

Our client said Tōtika is free to sign up and use. So we thought we will give it a go.
We contacted them, and they said Tōtika is a framework. It is not a pre-qual system.
In order to get our system checked under Tōtika, we need to sign up with one of the four pre-qual scheme that are aligned with Tōtika. Funny hah?
The cheapest one is around $2,000 per year. Not free is it? Apparently due to the size and type of our company (around 100 staff and medium risk industry), we don't qualify for the free one.

One of our new client has asked for this to be done soon before we start working for them.
It will take ages to get all their questions answered and not looking forward to it :sad:

The cheapest one is around $2,000 per year. Not free is it? Apparently due to the size and type of our company (around 100 staff and medium risk industry), we don't qualify for the free one.

One of our new client has asked for this to be done soon before we start working for them.
It will take ages to get all their questions answered and not looking forward to it :sad: — Yonny Yeung

The Devil is always in the detail :wink: At least it is (presently) cheaper than some of the overseas based options that burst on the scene in 2017- 2018

Hi Yonny, I'm sorry you feel you have been mislead in some way. Perhaps I might clarify a couple of facts, as I'm concerned your post will mislead others (which is what I feel you are accusing Tōtika of if I'm being honest):

• Tōtika is free for contractors and suppliers to register. For transparency, Tōtika takes an annual fee from member schemes ($5000) and an annual fee from clients/buyers of services ($1000) to cover the costs of running the portal. Currently the costs exceed our income, so CHASNZ is picking up the surplus bill to run the scheme as it grows (the system automations alone cost in excess of $10k a year).
  
• Tōtika takes zero fees from suppliers and contractors. The scheme takes no financial benefit from the assessments contractors/suppliers have to pay for.
  
• No assessment with a member scheme costs close to $2000 as you've stated. Our member scheme fees for assessments are in the range of: Cat S (Sole Traders) - $190-$298 for 2 years; Cat 1 (Smaller lower risk suppliers of services) - $320-$598 for 2 years; Cat 2 (Medium sized/high risk suppliers) - $850-$999 for 1 year; Cat 3 (Large/suppliers of very high risk services) - $1199-$1499 for 1 year.
  
• Tōtika recognises a number of other certification and assessment schemes (e.g. ISO 45001) that adequately evaluate supplier OH&S systems and don't involve pre-qualification assessment schemes.
  
• You refer to a free service - As far as we are aware there is no way to get independent assurance for your OH&S management system for free; if there is, let us know and we'll look at it. I think that it would be a tough ask to get people to give their professional services away for free - I don't, do you?
  
• The intent of the recognition scheme is that contractors and suppliers of services can choose how they get their OH&S management system independently evaluated from our range of options and that all their clients will recognise that one thing - that represents significant savings in terms of time, trouble and cost.
  
• All of these facts are laid out clearly in the scheme documents that are available on the front page of the website: http://www.totika.org

Fundamentally, Tōtika has been established as a not for profit mechanism to give suppliers and contractors maximum cross-recognition for their H&S compliance efforts. We accept H&S pre-qualification isn't perfect and we are working hard to incrementally move NZ's approach to something better for everyone. Unfortunately you can't wave a magic wand and fix the whole system overnight - change is incremental and the solution is always going to be the Best Acceptable Solution, not the perfect one.

Feel free to email me if you want to continue the discussion - jonatchasnzdotorg

Yonny's statement isn't true. I've responded to him and have provided the facts :smile:

I kind of get where Yonny is coming from though Jon - and this is his experience with dealing with Totika.
Yes a lot of contractors will not be out of pocket (and in fact a lot will save money) with Totika, as they are likely to already be pre-qualified at the appropriate level with one of the participating schemes.
However in Yonny's case it seems like they would also have to switch pre-qual providers (and I am assuming they are a large company) so $1200-$1500, plus if they engage subcontractors themselves it is likely they would have been instructed to sign up as a "Suppliers with own Supply Chain" at a cost of $1000 for the "buyer" functionality of Totika - so all up they are looking at a cost of over $2000 (although only a portion would go to Totika).

As you say though, this is only the starting iteration of the process for improvement in this space, although to be honest there are much bigger issues with NZ's accepted procurement practices - just take NZTA Board Chairman's public statement of the extreme disappointment in the delays to opening Transmission Gulley despite NZTA making their expectations clear and pushing very hard for it to open, their is not even the slightest bit of consideration of the contractor's point of view from the NZTA Board - how can we get anywhere to improve all project outcomes if we still have leading organisations run by boards or management teams without a mindset of collaboration with all involved in projects to best manage the risks (not just safety) between those involved rather than lumping the risk onto the contractor and demanding that things don't change from the idealised concept that was first scribbled down 5+ years ago? To be honest a lot of this probably also goes back to how public money is allocated, spent and justified...in other words the Government can't be seen wasting money, so we just make out that it is just the contractor to blame (and is there anything we learn anything from the current hot topic that "you can either blame or learn, but you can't do both").

And that is my main point... contractor prequalification was never really the problem, how many convictions have there been of a Principle Contractor failing to Pre-Qualify their subcontractors? I am going to bet on 0 - there are plenty of cases where their failure was to consult, or co-ordinate, or co-operate with their subcontractors to manage risks, but there will be none in which a judge has effectively said "you are being convicted because you did not ask for your subcontractors safety information before you asked them to give you a quote" and definitely none where the defense of "but I prequalified them so I'm not responsible" actually worked.
"Blanket" Contractor Prequalification (as is the current norm either in house or by 3rd party) has effectively been a parasitic solution that never really had a problem to solve, except for providing a false sense of security to senior management and Boards that they were actually managing the "sub-contractor" safety risk. In other words - it was always implied as solving your "sub-contractor management" risks so you had your ass covered when a sub-contractor seriously hurt or killed someone. Evidence of this is how often in the tendering process it is accepted that a supplier's quote will be accepted on the prevision that they will achieve the requirements of any "safety pre-qualification" clause before the contract is signed (or even better, before work is to start on site). This is the point of the OP that started this discussion in the first place.

I do question though if an iterative response is best in this case - or do we simply accept that the current state of pre-qual is at least something, while working to provide better industry specific procurement guidelines and guidance (including safety) - WorkSafe NZ and NZ Government H&S Lead do provide some general guidelines, and interestingly neither of these advocate for "blanket" pre-qualification as we have now but rather a project specific pre-qualification process as part of the tendering process which is proportional to the size and complexity of the project (so vague but this is where industry specific guidelines can step in to fill the gap of what "proportional" actually looks like).

But even this doesn't get down into the crux of it... which is that "safety" isn't an independent or static variable in the contract management space. There are a lot of different influences on safety both from within a contractor's own company and from outside of it, and these change throughout the lifecycle of a contract - depending on the circumstances an excellent "pre-qualified" contractor may resort to "less safe" practices when up against it (i.e. there's not enough trench shields available in the region so we're only using them on "high-risk" excavations because none of our clients can accept a delay to their project"). The improvements needed required us to understand this and accept that risks are best managed in collaboration with all project stakeholders not just lumped onto one of them, and that simply things do and will change from what was planned at the start of a project.

I guess my philosophical question to you regarding Totika and the OP is; do you see Totika as a stop-gap (to be disbanded when the actual issues are resolved), or do you see a future iteration of Totika's Pre-qualification as the end goal?

Hi Matt,

Thanks for taking the time to contribute to the discussion.

I'll start by answering your question:

Short answer:
The long term strategy for Tōtika is to adopt evidence based solutions that increase the safety and health of work suppliers of services deliver.

Longer answer:
In the short term, Tōtika is intended to standardise PQ assessment in NZ in order to declutter the demonstrated health and safety work suppliers of services have to undertake for the buyers of their services.
In the medium term, Tōtika intends to work with buyers of services, to explore further opportunities to reduce time, trouble, and cost to suppliers of services. Linking PQ to health and safety data (which is what we are currently doing) will provide useful evidence to inform this work.
In the longer term, Tōtika (through continued collaboration with our stakeholders) will continue to monitor the scientific evidence base and industry data (including sponsoring research where appropriate), leading a move towards approaches (whatever they look like) that are proven to enhance the health and safety of the work suppliers of services are delivering.

I really enjoyed reading your perspectives and align with much of what you have to say. The only bit I didn't agree with is your first paragraph for these two reasons:

1. I am not aware of any instance where a supplier has been instructed to become a 'Supplier with Supply Chain' member of Tōtika, nor would Tōtika support such an approach. Every business signed up to receive the supplier listing service directly from Tōtika have done so as a matter of choice and that will continue to be the case. Since we moved away from taking credit card payments, I now personally speak to every single applicant for buyer access to make sure they need it before they receive an invoice. Tōtika has turned many more suppliers towards the free registration than they have accepted for the payed one.

2. In the aforementioned case the supplier is moving away from an expensive international supplier that the client has stopped using (as that client has moved to Tōtika). Without Tōtika, that client would have very likely continued with the expensive international supplier. Whatever costs are associated with that suppliers choices for PQ in the future, Tōtika will not see $1 of it and the supplier will not have to pay more than $1500 for an assessment if they use a Tōtika member scheme (it's very likely they will pay much less. They stated they were paying $4k to the big expensive PQ supplier, which means they are a relatively small company or they would have been paying much more).

Cheers

Jon :smile:

1. I am not aware of any instance where a supplier has been instructed to become a 'Supplier with Supply Chain' member of Tōtika, nor would Tōtika support such an approach. Every business signed up to receive the supplier listing service directly from Tōtika have done so as a matter of choice and that will continue to be the case. Since we moved away from taking credit card payments, I now personally speak to every single applicant for buyer access to make sure they need it before they receive an invoice. Tōtika has turned many more suppliers towards the free registration than they have accepted for the payed one.

2. In the aforementioned case the supplier is moving away from an expensive international supplier that the client has stopped using (as that client has moved to Tōtika). Without Tōtika, that client would have very likely continued with the expensive international supplier. Whatever costs are associated with that suppliers choices for PQ in the future, Tōtika will not see $1 of it and the supplier will not have to pay more than $1500 for an assessment if they use a Tōtika member scheme (it's very likely they will pay much less. They stated they were paying $4k to the big expensive PQ supplier, which means they are a relatively small company or they would have been paying much more). — Jon Harper-Slade

Yeah I was assuming a bit in that first paragraph (sorry), and probably worded it wrong (especially after your clarification that it would actually be specifically yourself giving any sort of advice on which way to go) - so possibly read that from more of a perspective of "from what I read on the website, this is what it'll cost me", rather than "Totika told me this is what it will cost me" - and fair call on the fact it would be a reduction in total cost anyway even if it is an additional cost to engage a new PQ supplier.
I still would however be cautions with the use of "it's free to register with Totika" as even though it is technically correct, there is some implication of no cost - compare it with "there is no additional cost to register with Totika" which implies that there are costs (as you have outlined) but those costs are outside of the actual Totika framework. The analogy of a sign outside of a foodcourt saying "It's free to dine in this foodcourt" - some may interpret that as they are going to get free food; while most would consider that while they won't have to pay to enter the foodcourt it is reasonable to expect that they pay whichever food vendor they decide to purchase food from for that food.

Interesting to understand a little more on the direction of Totika, sounds like it may be close to the Yelp/Finda for Contractors I mentioned earlier (without the issue of fake reviews) ;)
One additional thought to ponder over - while we may be able to better identify "good" / "safe" contractors early with pre-qulaification systems, will any of it actually be of use? In NZ we generally have a small pool of contractors that are suitable for specific contract works - a large scale commercial building project - you have a handful of main contractors to choose from, regional roading project - handful of contractors, national roading project - looking at joint ventures or international suppliers, small / medium industrial or building capital works - handful of local mech/elec/civil/etc. contractors... my point being is generally in NZ we already know who is available to complete our work before the scope is even written up, we have already used them multiple times before and have relationships with them (including knowing what to watch out for). In other words - how often do we engage a contractor that we have no knowledge about prior to going into it?

More good points :smile:

Tōtika have received lots of constructive feedback (including yours) and are looking to tweak the web site in the new year; particularly so there is more clarity about the costs and what people have to do (so we are on it!).

I agree with your point on proximity to suppliers here in NZ. Here's my analogy:

• PQ is getting 'a ticket to the dance';
• Procurement processes are about 'trying to get a date';
• Winning work is 'getting a date' (this is about making sure a good impression is made on the first date in order to get the opportunity to develop a good 'relationship' ).

Some question I think it would be useful to seek answers for are:

• Is there value in providing tickets to the dance? If yes, what's the best way?
• In getting a date, what is the best way for a buyer to set expectations and for suppliers to show how they would meet those?
• What does a good relationship look like or what does it take to get a good relationship?
• Why would you need to keep trying to get a date with a party you are in a good relationship with and what mechanism would avoid the need?

yes it is a framework, but it means that you only need to do 1 prequal and not several, so although there is a cost it is greatly reduced and you do not need to submit the same information more than once. So there it has to be a win-win situation..

That's very true Don, but only if there is wide spread support for it amongst your target group of potential clients, allowing you the luxury of ignoring those clients that choose to use another pre-qual supplier/system.