Q & A: Contractor Compliance & Assessment

Q & A: Contractor Compliance & Assessment

Question:  What is contractor compliance and how can it be assessed?


Answer:   When an organization enters into a contract with another party to work on a site that the organization manages, the contracted party becomes a contractor.  The hiring company must ensure that the acquired company meets compliance requirements. “Compliance” properly refers to statutory and regulatory requirements, in other words, those that are not voluntary. The term is often used interchangeably with “conformance,” which points more to how practices align with voluntary guidelines and standards. Typically, “contractor compliance” is usually referring to a bit of both.

How can compliance be assessed?

Most of the initial compliance check happens when a contractor competes for a contract in a bid process. First, supply chain professionals will collect and review all relevant documents, so at least as a starting point, some categories of compliance are validated. Next, someone will have the task of combing through submitted documents and assessing how neatly their credentials align with the established requirements.

(Read about Managing Contractors from Start to Finish: The 4 Stages of Contractor Management.)

However, not all work goes up to bid in the first place. When a new contractor needs to be pre-qualified, online compliance registries can take on this process on behalf of the hiring company. They award a compliance grade and curate all safety information so that it’s available to the hiring company at a glance.

Whichever way this is accomplished, there are a few key categories in which compliance must be assessed:

Legal Requirements

Depending on the jurisdiction, legal requirements supersede everything and must be the main priority when selecting contractors. They must be legally entitled to work in the country, must have worker’s compensation coverage where applicable, and have a business license and insurance. The particulars of the requirements vary but ensuring compliance in this category makes sure your organization doesn’t wind up in legal or financial danger.

Training Requirements

When hiring a contractor, an essential initial step is to assess what contractor training is needed to work safely in the anticipated setting. Usually, training requirements are  attached to the tender Request for Proposal (RFP) package.  Each company bidding on the work can review training requirements and ensure their roster measures up. In addition, copies of tickets and certificates should be collected from each individual as required to ensure compliance with the training requirements.


Finances may be the star of the review, but contractors should also submit their safety, quality and environmental management systems. It helps if a contractor has these systems certified as COR or ISO conformant. That can often be considered satisfactory by the hiring company. Again, compliance registries can offer the service of validating safety program materials on behalf of the hiring company.

Ongoing Compliance

A signed contract doesn’t mean the contractor is compliant. Diligent companies conduct ongoing performance reviews, monitor certificates for validity, and audit safety records as applicable. Continuous monitoring and measurement processes should be established to ensure contractor compliance.


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