Pre-qualification – options

Pre-qualification is lots of pain for limited gain

At Winsland, we believe contractor pre-qualification is an important part of contractor management and PCBU due diligence. That’s why we provide pre-qualification support. Used properly, pre-qualification can:

• improve the likelihood of engaging contractors with sound health and safety systems and practices
• provide evidence of a contractor’s general capability and competence in health and safety
• encourage contractors to improve health and safety performance in order to remain commercially competitive

This position is consistent with WorkSafe guidance that: “Pre-qualification is used to establish a shortlist of potential tenderers, looking at the general ability and competence of contractors for the work.”

However, while the intent is valid, we consider many current commercial pre-qualification processes to be overly bureaucratic, expensive, and only partially effective in assessing real-world health and safety performance.

What commercial pre-qualification aims to do

Pre-qualification is intended to assess whether a contractor, subcontractor, or supplier is capable of working safely before engagement. Typically, this involves reviewing evidence of;

• health and safety policies and procedures
• worker training and competency
• hazard and risk management systems
• incident management and reporting processes
• certifications and insurance
• previous safety performance

The process also assists principals to demonstrate due diligence when selecting contractors.

These are legitimate objectives.

Issues with pre-qualification

Before jumping into pre-qualification, we offer some thoughts based on our experience. The difficulty is that many commercial pre-qualification systems rely primarily on document review. Contractors are required to submit extensive documentation and multiple examples demonstrating system implementation. Initial submissions can be highly time-intensive for SMEs, with further rounds of clarification or resubmission commonly required. While documentation is important, it does not necessarily demonstrate that systems are functioning effectively in practice. A contractor may:

• present excellent documentation but perform poorly operationally, or
• operate safely and competently while struggling to navigate complex compliance paperwork.

Unfortunately, we have seen examples where organisations achieved strong pre-qualification ratings despite weak practical health and safety performance simply because they understood how to present the required documentation.

This highlights a key limitation of paper-based assessment systems: they may provide evidence that systems exist, but only limited assurance that those systems are consistently applied in the field.

Creating cost and duplication SME can’t afford

For many SMEs, commercial pre-qualification creates both direct and indirect costs. Direct costs commonly range from several hundred to over one thousand dollars, repeated every one or two years, depending on the provider and business size. However, the greater cost is usually the internal time required to assemble, maintain, and repeatedly submit documentation. The issue becomes more difficult where organisations already hold externally audited certifications such as:

• ISO 45001
• OHSAS 18001
• ACC Accredited Employer Programme certification

These certifications already involve independent assessment of health and safety management systems. In many cases, commercial pre-qualification requires businesses to provide substantially similar evidence again through a separate process. Some principals recognise these certifications as equivalent or supporting evidence. Others still require registration through a commercial pre-qualification provider as a condition of tendering or site access. This can result in unnecessary duplication, particularly for SMEs with mature audited systems already in place.

Should I use Totika?

Tōtika was developed to reduce duplication across the construction and infrastructure sectors by providing a common framework for contractor health and safety pre-qualification. Under the Tōtika model:

• contractors can use one recognised assessment across multiple participating organisations
• participating providers apply a common standard
• externally audited systems such as ISO 45001 may be recognised as an alternative pathway

This is a positive development because it moves toward standardisation and reduces repeated assessment across multiple clients and providers. For organisations already certified to ISO 45001 or similar standards, Tōtika may help avoid repeated pre-qualification through multiple commercial schemes.

Thus organisations might use Tokia:

If asked to complete a pre-qualification by one of the Tokia agencies when you are already pre-qualified by another.

If holding ISO 45001, OHSAS 18001 or the ACC Accredited Employer Partnership Programme  –  avoids having to pre-qualify through the commercial providers.

Is pre-qualification enough?

No.

Pre-qualification alone does not remove a PCBU’s obligations under the Health and Safety at Work Act. Regardless of whether a contractor is pre-qualified, organisations still need to:

• ensure risks are identified and managed
• coordinate overlapping duties
• communicate site hazards and controls
• monitor contractor performance
• verify controls are working
• provide appropriate supervision and oversight

A contractor with a strong pre-qualification score can still perform poorly if contractor management is weak.

Can I do pre-qualification myself?

Yes. In our view, the following elements may substitute for and are often more important than the front end, paper-based commercial pre-qualification process:

1. Past experience

If you have past but recent experience working with a contractor, why would you not rely on your own internal assessement of their health and safety systems and performance? What is better than first hand experience? Nothing – so we see no need to pre-qualify contractors you know well. But:

• Document it – have H&S as part of your formal post contract review process
• It should be recent engagement (within the last 2 years)

2. Site Specific Safety Plan

A comprehensive Site-Specific Safety Plan (SSSP), integrated into contractual arrangements and tailored to the actual work and site risks, is far more valuable in terms of producing positive health and safety outcomes than pre-qualification. Provided it is a SSSP that documents a plan (including responsibilities and health and safety processes) applicable to the work on a specific site, rather than being an ad hoc series of documents.

Under the Health and Safety at Work Act 2015, PCBUs with overlapping duties must consult, cooperate, and coordinate activities. The SSSP is one practical mechanism for documenting the outcomes of this process.

3. Active contractor management

Effective contractor management requires:

• site inspections
• audits
• reporting
• supervision
• verification of controls
• engagement with workers

This is where “Safety as Done” becomes visible.

4. Verification of competence

Traditional procurement and HR processes can also be adopted for selection of contractors reviewing qualifications and experience

• checking references
• confirming licences and certifications
• reviewing prosecution or enforcement history
• interviewing key personnel

These activities often provide more meaningful insight into practical competence and may be sufficient on their own (if documented).

If you want to use approaches feel free to contact us for assistance. Pre-qualification support is what we do.

To bid I need to complete pre-qualification with a named provider. What are my options?

Audited via ISO 45001, OHSAS 18001 or the ACC Accredited Employer Partnership Programme – go to Tokia – they accept these.

Enrol with the named provider, pay the fee, complete the training and then complete the audit

No named provider but must use Tokia – make a free call to us for advice on who best fits your needs.

Complete the audit yourself or engage us to complete the application process for you to minimise effort and maximise the chances of success.

Conclusion

There is a legitimate argument that contractor pre-qualification in NZ is – lots of pain for limited gain. We do not argue contractor pre-qualification has a legitimate role in contractor management and PCBU due diligence – it is certainly best practice. The issue is how, without creating an industry in itself. However, the commercial pre-qualification provider approach of documentation review alone is not a reliable indicator of real-world health and safety performance. It is lots of pain for limited gain.

The current commercial model can impose significant administrative and financial costs on SMEs while providing only limited assurance regarding practical safety capability. Thus, SME can validly look to alternative, more affordable approaches to meet the objectives pre-qualification seeks to achieve, these being:

• identify contractors with sound health and safety systems and practices
• assemble evidence of a contractor’s general capability and competence in health and safety

Ultimately, organisations achieve these objectives and improve health and safety outcomes, not by relying solely on “Safety as Imagined”, but by examining and managing “Safety as Done”.

Case studies

Winsland provides pre-qualification support across many organisations, primarily in the construction sector. We support businesses wanting to be pre-qualified and businesses on the other side, wanting to run their own pre-qualification process.