Contractors:

How to Integrate

External Organizatons

Organizations that have shutdowns have many different relationships with contractors. In some firms the contractor is a small part of the effort, either supplying extra labor or specialized expertise of one type or another. In others, the whole shutdown is designed around a contractor’s strong suit. This book has assumed that all preparation and planning is conducted by company personnel but in fact, in many shutdowns, most of the Phase two work is actually done by the contractor.

Some firms bring in a contractor at the initiation phase and the added expertise is invaluable in keeping expectations in line with reality. Sometimes contractors are more effective than company personnel because they are viewed as outsiders with some objectivity. Many firms hire the contractor to prepare the individual job packages with Job Safety Analysis. These contractors then offer a fixed price bid for the package of work they have developed. Beyond your company rules and some legal requirements you can design a contractor client relationship that suits you.

Some shutdown organizations love to hate their contractor. While they’re been in a relationship for years, it seems that the contractor gets blamed for everything that goes wrong. Yet the next time the work rolls around, the same contractor is the low bidder and gets the work. This scapegoat role is a convenient one for the contractor to play. It protects the organization from having the unpleasant task of confronting its own shortcomings. While the organization is are blaming the contractor it can avoid looking closely at what practices are in place that don’t work or what personnel they have in jobs who are not competent.

Sometimes a long-standing relationship has to be split up. As in any field of human endeavor there are bad contractors as there are bad spouses. In most associations with contractors, as with spouses, there are bad relationships and relationships that went wrong and cannot be fixed. The question is how to avoid the problem in the first place.

One potential proactive solution was offered. Anas Aziz is a manager for Wong Heng Engineering, a major shutdown contractor in Malaysia. He has been involved in shutdowns where the customer sent the shutdown team (both contractors and employees) off site for a team-building workshop. He felt that the time spent was valuable since some level of trust was built up.

It is a challenge to get contractors integrated into the internal workings of the shutdown. Perhaps the team-building workshop that Mr. Aziz described is a good idea. But the two groups seem to have a built in conflict. On the surface it seems that the goals are far apart. The contractor is trying to make money by renting you people and providing you with expertise. You want to minimize costs and the contractor cost is one of the largest.

Standing over this whole battle is the 800-pound guerrilla, the downtime costs. Most of the time the cost of having the plant down dwarfs the separate cost of the shutdown or any savings from the lowest bidder. Of course, if the contractors were comparable then any money saved is real money. The problem is that the best contractor for the job might be the second or third lowest bidder. Thus, taking the lowest bid (which might be mandated by law for some organizations) is often penny wise but dollar foolish. Then there is the cultural problem of the role of outsiders.

In some organizations it runs against the grain to let outsiders to become too close. Generally it is to your advantage to keep the contractor in the communications loop so that they can apply their problem-solving abilities and their experience as members of the team. In fact, experienced shutdown managers such as Larry Jones from Duke Power require their contractors to solve problems (they won’t let problems be brought to the shutdown review meetings without the solutions also being produced).