This is a fictitious set of events/scenarios to highlight the benefits of qualifying your contractors who provide onsite services:

Current dilemma facing the purchasers on site

• A large number of Contractors are accessing the project site who are not prequalified.
• Contractors are being engaged to performing Onsite Services by the Purchaser with either no, few and/or inadequate commercial arrangements being implemented prior to them being contracted.
• Some of the Purchasers onsite representatives are issuing contractors with Service Orders without negotiating mutually acceptable, commercially prudent Terms and Conditions and Service Level Agreements (SLA’s).
• The Purchasers on site management are unhappy with this practice as it is commercially inappropriate but they are constrained by time and are unable to implement adequate fully recordable and traceable prequalification systems.
• The Purchaser has determined that some major contractors have no clearly defined, mutually agreed Service obligations. This includes Terms and Conditions of Service which defines the Purchasers and Contractors contractual obligations as well as their service deliverables and expectations.
• Unqualified contractors can potentially add increased costs to their scope of services.
• These contractors and/or their subcontractors may not be suitable to work at the Purchasers site ?
• These contractors may pose a Health and Safety risk whilst on the Purchasers site.
• These contractorss may engage staff who are not suitably qualified to carry out the contracted activity.
• These contractors may have serious breaches in respect of environmental matters.
• These contractors may not have signed a Non Disclosure Agreement (NDA) with the Purchaser to ensure confidentiality remains during the service duration.
• These contractors may jeopardise the Purchasers Intellectual Property rights.
• The Purchaser may not have carried out reference checks against unqualified contractors.
• No due diligence may have been conducted against unqualified contractors to ensure they are authorised to contract services with the Purchaser or that they are financially stable.
• The Purchaser does not know whether the contractor has a history of reneging on their contractual responsibilities and/or under performing the services provided by them.
• If no Terms and Conditions are agreed to prior to the Purchaser engaging the contractors services then the contractors Terms and Conditions govern the service.

The way ahead

• The Purchaser needs to define what their service requirements are for each contractor based on the complexity and total contract sums applicable to each service package. Ie. Minor works/ Major Onsite services.
• A Qualification process for contractors needs to be implemented.

About 

Glenn Turley is a consultant with 20 year procurement experience. He undertakes work on EPC projects for clients requiring the intensive management of procurement systems, packages and people.

He has also focused for the last six years on automating procurement and materials management processes.

Contact Glenn by phone: 61 42 760 8741

Contact Glenn by email at: glenn@logcon.com.au

Logistics Consulting website site: http://www.logcon.com.au