AGA UTILITY / CONTRACTOR SAFETY A Contractor’s Perspective By: NPL Construction Co. Dan Weaklend

AGAUTILITY / CONTRACTOR SAFETY A Contractor’s Perspective By: NPL Construction Co. Dan Weaklend

Who is NPL? CORE BUSINESS: • The safe installation & maintenance of reliable energy distribution systems • 2500 employees • 5.7M work hours • 16.5M feet installed/replaced • Fleet of over 3000 units ranked in Top 20 in construction industry • Heavy One-Call user

AGENDA • Safety & Quality • Historical Model to Select a Qualified Bidder • Best Value Process to Select the Contractor of Choice • Life after Selection

SAFETY / QUALITY • The best way to understand a contractor’s Safety and Quality culture is to first separate and identify the differences between Safety and Quality.

SAFETY IS THE STATE OF THE WORK ENVIRONMENT • Most processes that reflect a contractor’s commitment to Safety - and that impactthe contractor’s insurance costs and operating costs - are functions the utility seldom sees. • For example:

VEHICLES • Daily checks • Maintenance • Proper tie downs • Trucks and trailers not overloaded • Proper trailer connections and brakes • Proper tires • Proper parking requirements • Drivers’ safety training program for new hires, refresher & post-accident training

DRIVERS • Proper licenses and endorsements • Health cards up to date • Proper files and log books • Correct files kept at the right location on drivers classified at over 100 air miles • DOT Driver Background Checks • Annual reviews of each driver

LOADING / UNLOADING • Proper lifting procedures for booms • Proper straps used for booms • Booms inspected annually as required by OSHA • Proper pipe trailers (pinch points)

FACILITIES • Storage of flammable liquids • MSDS for warehouse & trucks • Compressed Gas cylinder storage • Forklift training • Warehouse safety • Fire extinguishers serviced and tagged • Open yard storage • Customer material & inventory (e.g. UV protection)

PERSONNEL • Orientation of new employees • Competent person training – who & at what level • Hazwhopper training • Confined space training • Personal Protective Equipment

CONTRACTOR SAFETY THE UTILITY NORMALLY SEES • Safety Vests • Safety Glasses / Shields / Gloves • Hard hats • Trench profiles for shoring • 2’ 4’ 5’ To Stay Alive™ • Traffic control • Parking of equipment on job sites

QUALITY IS WHAT IS LEFT BEHIND FOR ALL CUSTOMERS • Quality is traditionally handled by the utility operations group. • Poor quality can become the largest driver of costs to a contractor & the biggest risk to the utility • For example:

Redoing work • Dig and inspect programs due to a bad fusion or fitting installation • Failure to follow utility construction requirements • Customer outages from not using gauges properly to determine one-way feeds • Failure to do proper paperwork for regulatory records

Improper back fill or poor compaction • Poor restoration • Gas leaks due to poor quality • And worst case, a catastrophic incident/accident Utilities should require contractors to have programs/systems to reduce the risk of quality issues.

WHAT MOST UTILITIES REQUEST TO GET ON THEIR BID LIST • OSHA total incident rate (TIR) • OSHA total lost time (TLT) • OSHA recordable / total reported cases (TRC) • OSHA days away, restricted or transferred (DART) • Contractors experience modification rate (EMR) • OSHA citations • Contractor safety manuals • Certificates of Insurance

TIR EMR Utility ‘s Central Repository/Third Party DART TLT SAFETY MANUALS TRC HISTORICAL MODEL INSURANCE

INFORMATION FILED WITH A CENTRAL REPOSITORY OR THIRD PARTY • Most often this information is not updated. • Information is rarely seen by the operating group that interacts with the contractor. • Safety incident rates are only a piece of the puzzle. Great incident rates do not always mean great Safety, Quality or Best Cost. Safety. Quality. Best Cost.

SELECTING A BEST COST CONTRACTOR Some utilities use a process that has three additional steps to select the Best Total Cost contractor: • Extensive interview process • Onsite review of the contractor’s operations • Final weighted evaluation of contractor on all valued factors

INTERVIEW PROCESS • Utility’s contract management, engineering, operations, safety, regulatory affairs, risk management, environmental and other departments prepare an RFI. • Interested contractors provide requested information and supporting documentation.

INTERVIEW PROCESS • Utility team evaluates the contractor submissions and selects contractors to interview. • Selected contractors make a presentation to the utility team. • Normally, a senior manager from each department is on the utility team.

INTERVIEW PROCESS Some of the information gleaned from the interview process: • Contractor’s experience in the type of work being bid & time in the business • Contractor’s Safety & Quality procedures • Claims Management process • Fleet Safety Program • Pre-hire Qualification Process (BAK Assessment SM) • Training or Leadership programs

ON SITE REVIEW • Utility sends review team to: • Contractor’s main office to verify the information the contractor submitted and meet the people in their own environment • Contractor’s field office • Job sites to see equipment and processes • An in-depth review of the contractor’s programs on Safety or Quality • For Example:

HOW THE COMPANY COMMUNICATES SAFETY & QUALITY MESSAGES • Meetings - Toolbox Topics / Weekly Area Meetings; - Safety Committee Meetings - Kick-Off Meetings - Foreman meeting • Awards • Safety Awards • Quality Awards

WHAT THE CONTRACTOR MEASURES • Experience modification rates • Cost of claims and incident rate by Area, Area Manager, Superintendent • Motor Vehicle incidents • Quality issues • Material defects • Equipment failures / quality issues

WHAT THE CONTRACTOR MEASURES • WC, GL, MV • Cost by body part • Cost by type of MV accident • Closure rate for claims • Bonding capacity • Detailed tracking of drug programs • Cost per work hour • Which employees are covered • Which accidents / incidents are covered under the drug program

OTHER AREAS OF REVIEW • IS / IT Capability (WMS, electronic invoicing, electronic as-built) • Use of new construction technology / cost saving best practices • Employee Development • Creative Pricing • Alliance / Partnering (Risk sharing, Gain sharing) • Industry experience • Supply Chain Management

WEIGHTED MATRIX USED TO EVALUATE BIDS • Utility develops a weighted evaluation. Selected factors may include: • Safety Programs • Quality Programs • Hazardous Material Handling • Measurement Program for Audits/Inspections • Financial Stability • Cost Reporting Systems • Claims Management Process • Insurance Coverage – for every dollar the contractor has in insurance, there is a dollar less risk to the utility.

MANAGING A BEST TOTAL COST CONTRACTOR Once selected, • Contractor and utility begin audit processes • Best total cost process begins • For example:

QUALITY MANAGEMENT PROCESS The Quality Management Process utilizes the specifications and industry standards for each job to define quality. Continuous Quality Audits are performed and data is collected to provide information for reports. Once reports are given, corrective actions are required to improve quality and assure performance within specifications.

AUDITS EXAMPLE

MANAGING A BEST TOTAL COST CONTRACTOR • This contractor selection process opens the door for alliance-like behavior, allowing the contractor and the utility to join together to find ways to achieve the Best Total Cost for Safety, Quality & productivity.

BEST VALUE MODEL • quality • BEST TOTAL SAFETY, QUALITY AND BEST VALUE CONTRACTOR SELECTION SUBMITTAL INFORMATION REVIEWED CONTRACTOR AND UTILITY AUDIT PROCEDURES BEGINS EXTENSIVE INTERVIEW BEST TOTAL COST CONTRACTOR SELECTED SAFETY, QUALITY BEST TOTAL COST PROCESS BEGINS ON SITE REVIEW WEIGHTED MATRIX USED TO EVALUATE BIDS

QUESTIONS? www.gonpl.com

AGA UTILITY / CONTRACTOR SAFETY A Contractor’s Perspective By: NPL Construction Co. Dan Weaklend