Auckland Transport

Supplier selection and management procedure

PRO-HS15-SUP

  1. Background and purpose

Auckland Transport (AT) engages suppliers for a variety of services and projects including consultancy, design and construction of transport infrastructure, and operation and maintenance of public transport. Included are mobility impaired transport suppliers, vehicle recovery services, as well as a raft of independent consultants contracted to assist with a variety of projects and work processes.

The Health and Safety Reform Bill imposes a duty on those who manage or control a workplace to ensure, so far as is reasonably practicable, that the workplace, the means of entering and exiting the workplace, and anything arising from the workplace, are without risks to the health and safety of any person. Under the terms of the Reform Bill, there is no differentiation between an employee and a supplier (contractor); the duty extends equally to both.

The question of what is reasonably practicable is a matter of degree in each situation. In any given contract, it depends on factors such as the:

Scale and nature of the contract;

  • Type of work the supplier was engaged to do;
  • Suppliers’ and principals’ respective expertise in the work being undertaken;
  • Current state of knowledge and ”best practice” in the industry; and
  • Nature of hazards in the place of work.

Although Auckland Transport may not directly engage groups several steps removed (ie sub-contractors), a duty is still owed by AT to ensure the safety of these parties in relation to the contract. Therefore, AT is expected to do everything with regard to Health and Safety (H&S) that could be reasonably expected of the Principal given the circumstances.
The Health and Safety Reform Bill places emphasis on the duty AT has to consult, coordinate and cooperate with all other duty holders along the contracting chain.

The purpose of this procedure is to provide the overarching framework for Auckland Transport business operations to ensure the safe and effective management of suppliers in compliance with the legislation. The intention is to establish a consistent approach when selecting, engaging and managing a supplier from a health & safety point of view. The requirements set out in this document will become the minimum acceptable process across all AT operations.

  1. Scope

This Procedure sets out the minimum health and safety expectations for all AT employees and suppliers in order to ensure the effective selection and management of suppliers in relation to hazards and risks.

It applies to all divisions of AT and all suppliers (see the definition in section 6). This Procedure and the associated tools, will be read in conjunction with the AT Procurement Strategy and Procurement Procedures, as well as the AT Project Management Framework. The H&S Team will work closely with the Project management Office (PMO) and the Procurement team in implementing this procedure.

This Procedure has been completed to align with Auckland Transport’s health and safety framework.

  1. Responsibilities

 Chief Executive 

  • Accountable for the overall company’s compliance with AT Health and Safety policies/procedures including allocation of resources and responsibilities across the business.

Divisional Managers

  • Appoint competent person(s) as Contract Manager, and monitor and review their performance regularly.
  • Confirm there is a process in place to monitor and manage suppliers while they are working for AT or on AT’s premises.

Line Managers

  • Provide input to the supplier management process.
  • Provide support to the Contract Manager in managing supplier health and safety performance.
  • Audit suppliers compliance with AT’s health and safety policies, procedures and standards.

Procurement Manager

  • Incorporate relevant health and safety information in tender documents.
  • Review and verify health and safety information provided by the supplier.
  • Ensure Suppliers H&S Management System documentation is completed as per the Supplier Pre-qualification Checklist for tenderers who are not pre-qualified.

Contract Manager/Owner

  • Competent to undertake their role as set out in this procedure.
  • Incorporate project/contract specific health and safety information, including identified hazards, in the tender documents and contract information.
  • Confirm from the tenderer that they have the capacity to deliver health and safety requirements as per the tender document.
  • Confirm all suppliers have a signed contract in place prior to commencing work.
  • Confirm all suppliers are competent and inducted into AT’s business prior to commencing work.
  • Provide information to suppliers in order that they can undertake their work safely.
  • Demonstrate that all requirements of this procedure have been met before suppliers commence work/activity with AT.
  • Ensure all projects have assessed and mitigated risk as far as reasonably practicable at design stage.
  • Monitor and record Suppliers’ health and safety performance.

Legal Counsel

  • Provide appropriate health and safety contract clauses to ensure hazards and risks are identified and managed to prevent harm to suppliers, employees and others.
  • Provide contract clauses relevant to health and safety reporting requirements.

H&S Manager

  • Assist the business units to follow this procedure and guide them where necessary.
  • Provide professional assistance as required.
  • Review procedures and relevant standards as required.
  1. Schedule

Overview of Process

Specifically the following processes, (taken from the MBIE document “A principal’s guide to contracting to meet the Health and Safety in Employment Act 1992”

Overview of Process

Specifically the following processes, (taken from the MBIE document “A principal’s guide to contracting to meet the Health and Safety in Employment Act 1992”) will be described in more detail to enable a process for meeting the requirement of “all practicable steps” when managing suppliers and sub-contractors:

  1. Scoping the work: - Consider the broad health and safety implications, conduct an initial appraisal of significant hazards & overview of likely risks.
  2. Pre-qualifying the supplier: - Assess the general health and safety capability of potential suppliers for an approved list.
  3. Supplier selection and negotiation of terms: - Assess the specific capability of potential suppliers to deliver the specified contract works safely.
  4. Awarding the contract: - Contract clauses in place covering off health and safety requirements, eg reporting, monitoring, auditing. For larger projects – develop job specific H&S plans; for smaller jobs – maintain agreed health and safety standards, systems and processes.
  5. Monitoring the contract - Monitor/check health and safety compliance throughout the duration of the contract; i.e. audits, site meetings, monthly/weekly reports.
  6. Post-contract safety performance review - Determine whether the supplier is suitable for further contracts based on health and safety performance throughout the duration of the contract.

The key health and safety risks for a particular project, job task or service are identified when scoping the work, and the supplier is assessed to establish whether or not they can perform the proposed tasks in a safe manner. The performance of the supplier is monitored over the life of the contract/project to ensure compliance with established H&S Standards. On completion of the project, post-contract evaluation must be carried out and fed back into the ongoing supplier safety evaluation and pre-qualification process.

The duty of care includes ensuring that only suitably qualified and competent suppliers tender for employment with AT. The health and safety pre-qualifying process is key to achieving this requirement. Suppliers who wish to work with AT must register their interest through the pre-qualification process, and submit all required health and safety documentation. Where current suppliers are not pre-qualified, they will need to provide appropriate health and safety information relevant to the level of risk of the associated work, prior to work commencing. Senior manager sign off, commensurate with the level of health and safety risk, will be required, if the contractor is to be engaged without having been pre-qualified.

  1. Health & safety classification of suppliers

To assist with determining the health and safety specific information that should be provided to, and requested from the Supplier relevant to the contract works, the following Supplier risk classifications are referenced in this procedure. 

Table 1.0: Supplier Classification Matrix describes the outline of the selection and monitoring of suppliers process according to the risk classification of the supplier i.e. based on the level of risk.

Low Risk

Activities that have been assessed which represent a low H&S risk consist of:

  • consultant working in AT office only, ie no field work (may also be considered a “deemed employee”);
  • supplier servicing photocopier machine;
  • supplier re- stocking first aid cabinets.

Medium Risk

Activities that have been assessed which represent low-medium risk consist of:

  • supplier providing AT office cleaning or minor maintenance;
  • painter engaged to re-paint AT interior (work may beccome high risk when using ladders).

High Risk

Activities that have been assesed which represent medium to high-level risk and/or long term exposure to risk consist of (this also includes low-medium risk activities undertaken in a high risk environment):

  • working at or from any height above or below ground level;
  • working or entry into confined space;
  • lone working;
  • working involving mobile plant and equipment;
  • electrical work;
  • work in or nearby the road corridor;
  • work in other areas where people are exposed to road traffic;
  • work in or nearby the rail corridor;
  • working near overhead line equipment (25,000V);
  • working near moving rail vehicle;
  • work in or nearby a body of water;
  • risk of disturbing below ground or over head utility services;
  • excavation or earthworks;
  • exposure or potential exposure to asbestos;
  • exposure or potential exposure to hazardous fumes, dusts or vapours;
  • hazardous and dangerous subsances;
  • exposure to extreme environmental conditions;
  • hot work (including welding, grinding, cutting and any operation which presents a source of ignition);
  • demolition work;
  • work involving significant hazards to the public;
  • working in areas with potential for physical assault.

Tools/templates:

Determining Supplier H&S Risk (H&S Document)

Table 1.0   Supplier Classification Matrix

  

Low

Medium

High

Scoping the work

Determining what work needs to be carried out and considering broad H&S implications.

AT rep to discuss any possible H&S risk with consultant or supplier.

Contract owner will provide all the necessary information relevant to the nature of the work.

Relevant H&S information is given to tenderers through the tender documents. Tenderer responds with appropriate management controls for H&S risk.

Determine Level of H&S risk

Low

Medium

High

Pre-qualification

Possibly

Yes

Yes

Supplier Selection

Assessing capability of tenderers/suppliers

Supplier will acknowledge acceptance of H&S terms & conditions.

Supplier will provide appropriate hazard control  method statements.

Tenderer completes draft H&S plan. Principal provides information, assists with completion of risk assessment and hazard control plans where appropriate.

Awarding the Contract

Maintaining agreed standards. Appoint responsible AT rep as point of contact for supplier.

Finalise & incorporate H&S plan into contract; includes agreed detail of lines of communication, responsibilities, safe systems of work, method statements.

Induction

Induct supplier to AT processes and facilities; e.g. emergency response.

AT Induction required relevant to level of H&S risk.

AT and other relevant industry induction mandatory; eg principal supplier site induction, Kiwirail induction etc.

Monitoring the supplier H&S performance

Provide supplier with appropriate template for incident reporting. Responding to information as received.

Checking and ensuring supplier performance meets agreed standards. Not to preclude AT auditing.

Regular formalised H&S reporting requirements depending on length and complexity of the project (including monthly self-reporting). Regular site inspections and monitoring against agreed procedures. Auditing includes third party and internal.

Post-contract review

Exit interview – include any H&S issues H&S performance results used for reviewing renewal of contract, service agreements, PO.

Complete post-contract evaluation form.

  

  

  1. Process

6.1 Scoping the work

The AT representative (project engineer, contract/project manager) considers the scope of work to be contracted out and determines the health and safety implications of the work before the tenders are sent. The AT Representative will identify the health and safety risks of the proposed works and communicate these as part of the tender/procurement process to tenderers or selected suppliers. This health and safety scoping of the work must be completed for any contracted works whether it is under a tender process, by direct appointment, or by purchase order.

Scoping of the work includes, but not limited to, considering things such as:

  • Nature of the work, e.g. location (eg working on rail or road corridor), types of activity (eg working at height), time frame for completion, number of suppliers on-site, number and activities of sub-contractors;
  • Hazards on-site that could affect the supplier’s work and place their employees and sub-contractors at risk;
  • Hazards the supplier could introduce during the project;
  • Site-wide factors such as access and egress, loading/unloading areas, control of pedestrians, traffic management, underground services, managing other work on site, temporary works, etc.

This information describes known health and safety hazards and issues to be managed for a specific contract. It is generally issued with, or included in, the tender documents. It describes tenderers minimum health and safety obligations and enables allowances for health and safety to be factored into the tender.

The supplier’s responses to the information for tenderer document will in turn form the basis of the health and safety plan for the project/work.  Suppliers should outline their approach to H&S in relation to the proposed works and provide a preliminary outline of the manner in which project/contract-related hazards will be addressed.

Principals and suppliers need to share information and agree on what has to be done, how it is to be done and who should do what.

The nature of the contract and the significance of the hazards will affect procedures and precautions required. For low risk supliers this may be as simple as discussing the relevant H&S risks with the potential supplier and agreeing the hazard elimination and control measures.

There are a variety of AT tools that may be used in order to identify health and safety risk involved in the contracted works, and inform suppliers, including the H&S checklist in the AT Procurement Plan for contracts worth over $25,000. All known and potential health and safety risk must be listed here, as this will be used as key material in the process of tender assessment and raising specific health and safety issues to which tenderers must make response. If further health and safety assistance is required, the procurement process directs the person completing the request to the AT H&S team for further assistance.

If a procurement plan is not used, ie for works under $25,000, the person completing the Purchase Order request on line will be directed to indicate whether or not a health and safety risk exists. If affirmative, they will be automatically directed to complete a contract for that work which will bring in other health and safety requirements, including reporting requirements, into play.

Tools/templates:

  • H&S Checklist in AT Procurement Plan, Section 14.
  • Supplier Selection Recommendation (SSR) (Procurement document for engagement under $100k).
  • Scoping the Work (H&S Document) 

6.2 Pre-Qualifying the Supplier

Pre-qualification is used to establish a list of tenderers that have the systems and processes in place to undertake contracts safely.

Pre-qualification looks at the general ability and competence of the supplier for the work. The Supplier’s documented health and safety commitment and procedures should also be part of the criteria. The level of detail required for pre-qualification should be appropriate for the type of project/work being undertaken, and depend on the size, type and complexity of the job.

The pre-qualification process includes the following aspects of health and safety:

  • Documentation - H&S plan for the type of activity concerned, H&S Policy, hazard control measures, safe work method statements (and other procedures for ensuring the safety of the work);
  • Personnel - qualifications and training that demonstrate competence in the required areas;
  • Sub-contractors - arrangements for assessing, appointing, and managing sub-contractors;
  • Health and Safety performance - employee participation systems, incident reporting and investigation, employee health monitoring, enforcement action, outcomes of safety audits, current ACC experience rating, etc.

The information supplied as part of the pre-qualification process must be kept up to date and relevant for all suppliers. Information such as training competencies and appropriate licenses and registrations must be valid and in date. Pre-qualification must be maintained on an annual basis either as a confirmation of compliance or an update on the core information supplied.

All suppliers who tender for work at AT of a medium to high health and safety risk will be required to sign up to ISNet, an online third party supplier management program implemented by AT, and provide the necessary documented processes required for the type of work they will be performing for AT.

6.3 Supplier Selection and Negotiation of Terms

Consideration of the Tenderer’s skills and knowledge relevant to the health and safety performance criteria for a specified project is critical. It must be stressed that pre-qualifying is concerned with determining the general capability of potential tenderers, whereas their ability to manage the specific hazards in a particular contract is determined in the tendering process itself.

In addition, the following points may also be considered prior to contract decisions being determined:

  • Allow sufficient time to assess the health and safety requirements of the tender;
  • Consider whether the proposed timeframe for the project would adversely affect health and safety outcomes;
  • Where necessary, hold post tender meetings with potential suppliers to further assess their competence and attitude toward health and safety.

6.4 Awarding the contract

Health and safety clauses contained in the contract:

  • Ensure the appropriate H&S clauses are contained within the contract and that the contract has been referenced and signed off;
  • Ensure all relevant reporting requirements are understood;
  • Ensure all roles & responsibilities for supervision and monitoring have been allocated.

Information provided to the supplier shall include the following health and safety related information:

  • The supplier’s obligation to comply with all statutory health and safety requirements;
  • The supplier’s obligation to meet the required standard of safety as determined by the Contract owner;
  • The requirement to develop and submit a H&S Plan in relation to proposed works (for all high risk and some meduim risk suppliers);
  • Any significant known hazards that have been identified in relation to the project;
  • The process by which contract performance will be periodically reviewed;
  • The process for handling non-conformance or failure to comply with Auckland Transport’s H&S Management System and/or the terms of the contract;
  • The requirement to develop and maintain a process for providing suitable induction training to persons involved in the contracted works; and,
  • Other information as required.

Pre-commencement Meeting

On awarding a contract and prior to any contract works commencing, a pre-commencement meeting may take place with representatives of AT and the successful supplier. One of the aims of this meeting is to discuss and finalise the health and safety requirements of the contract. Minutes of this meeting shall be recorded and retained. During the pre-commencement meeting, the AT Project/Contract Manager, supplier and other relevant parties must reach an agreement on accountabilities/responsibilities and finalise the health and safety requirements (which will be outlined in the H&S Plan).

          Tools:

  • Pre-commencement checklist (PMO document).
  • Supplier H&S pre-start checklist. (H&S document).

Supplier Induction

Suppliers and sub-contractors must undergo the relevant H&S induction process to work on any AT site or workplace. This shall involve attending necessary job-specific inductions, e.g. Rail courses and induction if working on or around train platforms, or site inductions on a construction site.

6.5 Monitoring the Health and Safety Performance of the Supplier 

H&S Monitoring and Auditing 

Throughout the course of the contracted works, the Contract owner shall undertake periodic reviews of the supplier’s H&S performance or compliance with relevant health and safety provisions. The Contract owner must ensure all Auckland Transport health and safety policies and procedures are being met, assessed and regularly reviewed by suppliers.

Depending on the scope of works and the contract conditions, this process may be undertaken in a number of ways, such as:

  • Carry out both planned and unannounced safety checks and inspections of the supplier’s activities while work is in progress – using the health and safety plan as reference, as well as contract clauses and any specific organisational and legal requirements;
  • Arrange safety review meetings to keep suppliers informed of the results of monitoring so that they can take proactive steps to improve their performance, plan for and resolve health and safety issues, as well as give positive feedback on successes;
  • Ensure the supplier is reporting all incidents both on a monthly basis and where relevant via the AT reporting tool - Synergi Life. Encourage reporting of issues and incidents without fear of blame;
  • Respond quickly to information and reports which come to light and jointly investigate all incidents; and,
  • Ensure permit to work and job registration systems, competency requirements, and other controls are in place and maintained.

Where an immediate or potential serious risk is identified, AT management has the right to stop the supplier’s work immediately. Any corrective actions identified must be documented, and addressed within a stated time frame.

The method and frequency of monitoring should be determined by the Contract Owner in consultation with the relevant Auckland Transport’s H&S Advisor, and should consider the risk associated with the activity.

Monitoring, reporting and measuring supplier health and safety performance involves tracking of:

  • Key performance indicators (KPI);
  • Incident Summaries;
  • Organisational reporting requirements;
  • Serious harm notification requirement.

(Refer to H&S Procedure: Health and Safety Audits for further information and guidance on AT requirements.)

6.6 Post Contract H&S performance evaluation

Supplier health and safety compliance will be reviewed as part of ongoing supervision. However, when the work is finished (or at periodic intervals in a lengthy or ongoing contract), AT will review the quality of the work against the job safety specifications and the supplier’s H&S performance. This will consider, among other things:

  • the effectiveness of the original choice of supplier;
  • how well the supplier fulfilled the health and safety plan and managed health and safety while completing the contract;
  • any improvements that could be made to equipment, safe work methods etc; and,
  • whether the supplier is suitable for further contract.

Upon completion of works, the contract owner must assess supplier health and safety performance in relation to the project by completing a post contract evaluation form. Where practicable, these records should be retained to assist in future assessments of Supplier/Tenderer competence, and fed back into pre-qualification process.

Tools:

  • Post-Contract Supplier H&S evaluation (H&S document).
  • Project Closure Report (PMO document).
  1. Definitions

Related Standard

Appendix

Table 1.1

Alignment of Supplier H&S Management

Manager of relevant area

Procurement Team

AT Project/ Contract Manager

H&S team (as required)

Scoping the work

Identify H&S hazards/risk level, complexity, control of workplace, degree of interaction, duration of contract, and costing of works. Classify required supplier as low, medium or high.

 -

  - 

required

required

Development and finalisation of tender documentation incorporating project H&S criteria. Procurement to endorse.

 -

required

required

  -

Appoint competent AT Project/Contract Manager.

required

 -

 - 

 - 

Pre-qualifying

Consider suppliers skills, knowledge and capacity to undertake scope of work in a safe manner (i.e. review past H&S history, state of H&S management system, sub-contractor management procedures, inspection/auditing practices, training resources).

 - 

 - 

required

required

Supplier selection

Ensure supplier outlines approach to proposed Scope of Works including a preliminary overview of project-related hazards and the manner in which related hazards will be address (i.e. work method statements inc hazard control).

 -

 -

required

 -

Develop Contract Document and include specific performance criteria regarding H&S (i.e. submitting H&S plans, compliance with H&S legislation, training requirements etc.) Draft H&S Plan may also specify adequate monitoring and supervision levels.

 -

 review

required

required

Awarding the contract

Tender Evaluation Team (TET) determines successful tenderer and award contract. Hold documented pre-commencement meeting with successful supplier to finalise, amongst other information, key H&S requirements of the project.

 -

required

required

required

Review audit of Supplier H&S Plan for Med-High Risk Suppliers.

 -

 - 

required

required

Monitoring supplier H&S performance

Review performance of supplier (and sub-contractors) in accordance with established monitoring methods and H&S plan.

 -

 - 

required

 -

Monitoring may include inspections, compliance audits, meetings, and/or systematic reporting and should be determined based on ‘RISK’ associated with contract works.

 -

 - 

required

required

Report and document non-compliances and provide written directive to conform where appropriate.

 -

required

required

 -

Post contract evaluation

When works completed – Conduct formal review of supplier performance throughout the project and retain records.

required

required

required

required

Update procurement supplier/preferred supplier list with relevant performance information.

 -

required

required

 -