Third–party prequalification is a rapidly-growing business model providing companies with a convenient way to ensure contractors meet safety, fiscal, and other requirements before being hired to work on a jobsite.
How the Process Works
Companies, often called Owner Clients or Owner Operators, and contractors both pay to secure an account with a third-party auditor, such as ISNetworld®*, PICS®, PEC® Premier, Comply Works, and Canqual.
After establishing an account, the Owner Client uploads requirements specific to their companies, projects, and jobsites; and prospective contractors post detailed qualifications of their company and employees. If a contractor wants to work for an Owner Client, they must ensure they meet all of the needs of the Owner Client.
Throughout the process, the third-party auditor inspects and validates the documentation uploaded. Common types of documentation and requirements include safety programs, training programs, insurance information, workers’ compensation information, incident statistics, financial stability, and past performance
As an Owner Client’s needs change, the contractor must go into their account and update the documentation to meet these new requirements, or risk falling out of compliance.
Usage of Third-Party Auditors
The oil and gas industry is exceptionally receptive of this pre-qualification model. One of the main reasons for the acceptance is a desire to cut down on the staggering fatality rates.
The average fatality rate for all industries-U.S. workers is 3.8 deaths per 100,000 employees. Compare that with a 27.1 per 100,000 for offshore workers, according to data from the Bureau of Labor Statistics, and you can see wherein the need lies
In addition to limiting fatalities and injuries, third-party auditor services help Owner Clients limit liability. The popularity and effectiveness of these services is evident by the rapid growth the past several years by companies such as ISNetworld®*, PICS®, PEC® Premier, Comply Works, and Canqual, and others.
In a September 2013 press release, ISN®* touted how in a short 12 years of existence, the company has grown to service 320 Owner Clients and 50,000 contractor customers across more than 75 countries.
However, it is not only the oil and gas industry in which third-party auditor services is booming.
Textura Corporation, a provider of similar services to the construction industry, recently surpassed $15B in client construction value across the US and Canada. “We are constantly looking for ways to streamline the qualification process from both the subcontractor and general contractor viewpoints,” said Jonathan Halloran, EVP, Client Services, Textura Corporation In a press release issued by the company.
ISN®*’s press release also pointed out that the company’s business is expanding into markets outside of the oil and gas sector.
“ISN’s continued growth is due to the solid relationships ISNetworld helps to foster between our contractor customers and their clients,” says Joseph Eastin, President of ISN. “Our team is dedicated to the success of our members in all industries and regions around the world.”
As the use of these third party verification companies expand, Safety Services Company has witnessed an increase in demand from contractors needing help to maintain their account.
“Often time, the steps required to meet the requirements of owner clients can be daunting tasks,” said Safety Services Company Global Compliance Solutions General Manager Daniel Silverfield. “Because of our expertise in helping thousands of clients with the landscape and requirements of these auditors, we are able to help contractors establish accounts and secure Owner Client approval.”