Assessing Contractor Qualification Programs

Many operators of liquid and gas pipelines depend on their contractor partners to perform a wide range of routine and specialized work to keep their systems running safely and smoothly. The regulatory requirement for ensuring contractors are qualified lies with the operator; however, many operators rely on their contractors to share in the responsibility. In some cases, the operator is willing to accept contractor qualification credentials in accordance with a contractor’s own qualification program. This approach is not restricted by regulations but does require careful handling by the operator to ensure adherence to both explicit requirements and implied expectations of Operator Qualification regulations.

According to §192.805 and §195.505, each operator shall have and follow a written qualification program.

The key term in Code is ‘operator.’ Contractors aren’t required by federal pipeline safety regulations to have and follow a written qualification program. Operators own all aspects of the qualification processes used to qualify individuals who perform covered tasks on their pipeline system, whether tasks are performed by operator employees or contractors. Despite the regulatory obligation resting solely upon the operator, some contractors create and follow written qualification programs of their own.

When an operator determines a particular contractor will perform covered tasks on their pipeline system, the operator must determine whether the contractor will work under the operator’s or the contractor’s qualification program. The operator should document their review and acceptance determination of the contractor’s qualification program.

It’s important to note that if the operator accepts a contractor’s qualification program, both the operator’s and the contractor’s qualification programs may be audited during the operator’s regulatory inspections.

Our recommendation is for operators to adopt the lowest risk practice of requiring contractors to comply with the operator’s qualification program without regard for whether contractors have qualification programs of their own. If the contractor follows the operator’s qualification program, the operator is under no obligation to review the contractor’s programs. However, many operators choose to accept their contractor’s qualification programs. The following parts of the contractor’s qualification program should be evaluated before making an acceptance decision.

1. Consistency with the Operator’s OQ Program
2. Program Rigor
3. Training and Testing Processes
4. Qualification Processes
5. Unique Procedures and Equipment

Consistency with the Operator’s OQ Program

An acceptable contractor qualification program should be consistent with the operator’s program. The operator must ensure that covered tasks are aligned between the programs. For example, if the operator has a custom task list and a contractor uses a general industry task list where task names, task descriptions, and task steps are not in alignment, the qualification programs may not be compatible.

Task Consistency:

Whether the operator has established a separate contractor task list or if the contractor has its own task list, the operator must review both the internal task list and the task list the contractor will work under to identify inconsistencies so any differences can either be eliminated or, when necessary, maintained with adequate justification.

Operators must assess important task components, such as span-of-control, qualification methods, and qualification intervals. Keep in mind that inconsistencies between the plans must be explained during regulatory inspections. For example, both the operator and the contractor’s qualification programs include a covered task for inspecting for atmospheric corrosion. However, the span-of-control in the operator’s program for this task is 1:3, meaning one qualified individual directing and observing a maximum of three unqualified individuals. The contractor’s written program allows a span-of-control for the same task of 1:5, one qualified to five unqualified individuals. This means the contractor may have more unqualified individuals being directed and observed while performing the task than the operator. This is the kind of inconsistency that would be difficult to justify.

Generally, operators have more confidence and trust in their own employees than in contractor employees. If the span-of-control ratio was reversed, 1:5 for the operator and 1:3 for the contractor, that is still inconsistent and would require justification; however, a reasonable case could be made that the operator has greater control over the training and qualification processes for internal operator employees, and that operator employees tend to be longer tenured than contractors, making a wider span-of-control for operator employees potentially justified.

Even if the operator has a well-considered rationale for inconsistencies, differences should be avoided. The ideal situation is where the operator’s and contractor’s qualification programs are in alignment in every aspect. Additionally, operators should strive to have both contractors and internal employees work from a single task list.

Program Rigor

When we consider program rigor, we’re talking about ensuring both the operator’s and the contractor’s qualification programs are similarly demanding in terms of qualification methods. For example, if an operator’s qualification program requires both a written assessment and a performance evaluation for initial and subsequent qualification, while the contractor’s program requires a written and performance for initial qualification but only a written for subsequent qualification, then the contractor’s qualification program, in effect, sets a lower standard for contractors than the operator has established for its own employees.

This is an inconsistent process that would be difficult to justify. Why would an operator require less assessment for contractors than for their own employees? The ideal situation would be for the operator and contractor to use identical qualification methods. If the operator has determined there should be a different level of rigor – either more or less stringent – for contractors than for operator employees, from a regulatory perspective, that may be acceptable, provided the operator understands the inconsistency and has documented their rationale.

Training and Testing Processes

Although §192.805(h) and §195.505(h) only require training as appropriate to ensure that individuals performing covered tasks have the necessary knowledge and skills to perform the tasks in a manner that ensures the safe operation of pipeline facilities, training is typically an important component of a written qualification program. As such, operators should meticulously evaluate and observe contractor training to ensure consistency with the operator’s training.

Training Vendors:

When training vendors are involved, operators sometimes defer to the vendors to ensure training is worthwhile, relevant, and sufficiently applicable to their operations – when in some cases, training may not meet the operator’s requirements.

Review of Vendor Materials:

Operators should thoroughly review and document their acceptance of vendor or contractor training and testing materials to avoid potential concerns during regulatory inspections. To reduce the potential for program inconsistency, operators should limit their acceptance of vendor training and testing materials to only a single vendor or ensure the operator has the ongoing capacity to validate the complete program for all approved vendors, including future changes and updates.

Operator-Specific Training:

There are occasions when an operator provides in-depth training for their employees but not for contractors who perform the same task on their pipeline system. This is a potential consistency concern. An obvious gap between training programs would exist if, for example, the operator provides a multi-day, classroom, and hands-on pipeline locator training course for internal employees, while contractors who perform locating for the same operator are trained via a brief online or classroom training course.

The operator should ensure contractors have training comparable to that provided to operator employees. This may be accomplished by assisting the contractor in creating similar training courses or by the operator inviting contractors to attend the operator’s training courses.

Testing Safeguards:

Some operators have established waiting periods between test attempts to ensure test takers have time after a failure to study procedures or to review training content prior to retesting. Waiting periods reduce the likelihood that individuals will simply memorize questions and answers from the previous test, to pass the retest without acquiring additional knowledge.

Some operators have established limits to the number of test attempts, so individuals don’t become qualified after failing a test an excessive number of times and then eventually passing the test. These and other testing safeguards are effective methods to ensure test integrity.

Currently, there are industry initiatives underway to establish a detailed, high-integrity framework for contractor qualification processes. The goal is to make contractor qualification processes and records as reliable and secure as the internal processes trusted by operators. These worthwhile endeavors provide contractors with the benefit of reducing qualification expenses by facilitating the transfer of qualification records between their operator customers while providing operators the benefit of safe and secure contractor qualification processes comparable to their own.

Operators should review contractor qualification programs to determine if testing safeguards are in place and if those safeguards are aligned with those in the operator’s program. If, for example, the operator has established a 24-hour waiting period between test attempts and three as the maximum number of test attempts allowed, as requirements to ensure test integrity for operator employees, the contractor should have identical or even more stringent measures in place. If there are discrepancies in testing safeguards between operator and contractor programs, the operator must be able to explain and justify them during regulatory inspections. A likely question for the operator is if you consider waiting periods and a maximum number of attempts necessary to test integrity measures, why don’t you require them of your contractors?

Proctoring:

Operators should consider a proctoring mandate for contractor testing to ensure testing is conducted according to operator policies. Some operators go a step further and require an independent third-party to proctor contractor testing. Third-party proctoring can provide an even higher level of operator confidence that testing was conducted properly. Independent third-party proctors have a strong incentive to ensure there is no cheating or rule-breaking during testing because the third-party proctoring vendor may lose their contract if the operator doesn’t have a high level of confidence in their work.

An operator reviewing a contractor qualification plan may require proctoring or even third-party proctoring for contractors but not for operator employees. The best practice to ensure consistency would be to require the same approach to proctoring for both groups; however, an operator can justify proctoring for contractors and not for operator employees by pointing out that the operator exercises a greater level of oversight and control of testing processes for operator employees than it does for contractors.

Training Content:

Operators should review all operator and contractor training content and testing materials to determine alignment with the operator’s qualification program and operator procedures. This includes internal, operator-developed training, vendor training developed for the operator, and off-the-shelf training available through vendors to the industry in general.

Off-the-shelf training and testing can be an excellent tool for training and assessing individuals in commonly performed tasks using industry-accepted processes. However, off-the-shelf training and testing should be supplemented, where necessary, with operator-specific content. For example, inspecting for atmospheric corrosion is performed consistently throughout the industry. During their review, an operator may find that an off-the-shelf training course is sufficiently aligned with their procedures for performing this task and approve the course. Other tasks are performed less consistently by operators—for example, emergency response. Many operators have detailed emergency response plans to ensure public safety based upon their history and priorities. In this case, off-the-shelf training and testing materials may be inadequate.

If the operator reviews training and testing materials and determines they don’t address all important steps in the operator’s procedures, the operator may either require contractors to complete an operator’s custom training course developed for the task or to complete an off-the-shelf training course along with a supplemental operator-specific course that fills any gaps of the off-the-shelf course.

A key question to ask in determining which path is appropriate is, does the off-the-shelf course present any material that conflicts with operator procedures?

• If yes, the off-the-shelf course material conflicts with operator procedures. The off-the-shelf course shouldn’t be accepted by the operator. Individuals should not be trained in the wrong way to do something and then retrained in the right way. This can lead to confusion.
• If not, the off-the-shelf course doesn’t conflict with operator procedures, and the off-the-shelf course is simply missing some details of the operator’s procedure. The off-the-shelf course may be used along with an operator-specific supplemental course to fill any gaps.

Operators don’t need to do this comparison if they require contractors to complete operator-specific and/or operator-developed courses.

Testing Materials:

An important oversight that operators sometimes make is failing to review vendor testing materials as part of the review of training materials. It is essential that testing materials are reviewed to determine alignment with operator testing and the overall effectiveness of testing materials.

For example, operator employees qualifying to perform a particular task are administered a knowledge test consisting of 30 challenging questions that are either multiple choice with single and multiple answer options, matching questions, or sequencing questions. Essentially, the test consists of challenging questions and question types used to assess knowledge. For the same task, contractors take a ten-question test consisting of true or false and multiple choice with single-answer options. The distractors used in the contractor questions are simplistic, meaning a person with reasonable test-taking skills could reason their way to a passing score, whether or not they have adequate knowledge of the material being assessed.

Operators do not want to find out that contractor or vendor testing is inadequate after a serious pipeline incident or during a regulatory inspection. A thorough review prior to accepting the materials will ensure the operator is aware of any deficiencies and can either refuse to accept the materials or accept them with the caveat that an operator-specific supplemental course is required for qualification.

Note: Some training vendors will legitimately cite intellectual property concerns with sharing training and testing materials with an operator. This is understandable. However, as part of the review and acceptance process, the operator should seek to find a way to review the vendor’s training and testing materials. This may be accomplished by the vendor sharing the materials through an online meeting, where materials are reviewed by the operator. Still, no copies of the materials are transferred to the operator. Another way to relieve the vendor’s concern would be for the operator and vendor to enter into a non-disclosure agreement prior to sharing materials. If no accommodation can be reached, making it impossible for the operator to review the vendor’s training and testing materials, the operator should refuse to accept them. The regulatory burden of review of training and testing materials to determine alignment with the operator’s program is on the operator. It is unlikely the operator would prevail in regulatory enforcement action by stating vendor materials accepted by the operator could not be reviewed by the operator due to vendor confidentiality concerns.

Qualification Processes

Evaluator Qualifications:

Operators must review the contractor’s process for selecting evaluators to ensure it is adequate and consistent with the operator’s process. There would be a significant disparity if, for example, the contractor requires five years of field experience, successful completion of an evaluator training course, and at least three years of experience performing the covered tasks the evaluator will evaluate while the operator doesn’t have a formal process for selecting and training evaluators. This would mean the operator has a lower evaluator selection standard than their contractor. This would be challenging to justify during a regulatory inspection or during an investigation after a serious incident.

The best practice is for the operator and contractor to have identical evaluator selection requirements.

Performance Evaluations:

The operator should review the contractor’s written qualification program to determine how performance evaluations will be conducted. For example, are performance evaluations conducted in the field, on the job, or via simulation? Does the contractor use discussion of task steps as an evaluation method? Does the evaluator submit performance evaluations in the field, in real-time, on a mobile application or online portal, or are performance evaluations submitted later, on paper? Does the contractor have an established number of performance evaluations an evaluator can submit in a day, or will any number of performance evaluations be accepted?

Ideally, the operator and contractor will conduct performance evaluations in the same manner.

Unique Procedures and Equipment

Every operator has specialized procedures, equipment, materials, and system components that make their company and pipeline system different from other operators. These unique features can make acceptance of contractor qualification programs challenging but not impossible.

Operators should review company procedures and manufacturer guidelines to determine the steps necessary to perform tasks. These task steps should be included in both operator and contractor training and qualification materials. If, for example, a contractor has developed a process for sealing cast iron pipe joints, the operator would need to develop training, testing, and qualification materials to ensure thorough evaluation that individuals have the knowledge, skills, and abilities to perform this task safely. Contractors who will perform the process must be trained and qualified as well.

Summary

To meet the need for operations leaders to quickly onboard contractors to address operational needs, many operators choose to accept multiple vendor programs. While this objective is sensible, without a thorough program review, accepting more than one vendor program can present significant risk.

To better understand this risk, let’s compare how regulatory agencies conduct enforcement actions to how municipalities enforce traffic laws. When a driver is stopped for speeding, the police officer believes he or she has sufficient evidence proving that the driver was exceeding the speed limit on a single occasion and issues a single citation. The driver may have been speeding hundreds of times previously and only cited once. In this situation, drivers aren’t required to be proactive because prior traffic violations aren’t considered.

On the other hand, if a state or federal pipeline safety regulatory agency determines the operator violated a pipeline safety regulation, the regulatory agency will dedicate substantial resources to investigate to find other violations during the inspection period, which typically includes the previous three to five years. In each violation, the regulatory agency may issue a penalty to the operator. According to §190.223(a), the maximum federal civil penalty may reach, but not exceed, $257,664 for each violation, for each day the violation occurs, up to a maximum civil penalty amount of $2,576,627 for any related series of violations.

The key difference is that in a traffic situation, there is no attempt to issue citations for previous violations. At the same time, in a pipeline safety regulatory enforcement action, there may be a considerable investigation of events occurring prior to the date the operator became aware of the deficiency.

Operators must perform due diligence in advance to prevent program deficiencies from occurring. Suppose a deficiency is discovered by a regulatory agency today. In that case, violations can and likely will be written for past occurrences the operator may not have been aware of at the time they occurred. To prevent these situations, operators should consider taking the following recommendations.

Recommendations

1. Everyone Should Follow the Operator’s OQ Plan.

As stated previously, the safest way for operators to avoid inconsistency is to require contractors to follow the provisions of the operator’s written qualification program and to decline to accept contractor qualification programs.

2. Limit the Use of Training Vendors to Fully Vetted Programs.

If training vendors are involved, ideally, both the operator and the contractor should use the same vendor. Although this approach could lead to lag time in onboarding contractors, the objective is for the operator to have a dependable, consistent qualification program they know inside and out and can rely upon on during regulatory inspections and legal proceedings. If the operator decides to accept more than one training vendor, each vendor should be fully vetted by the operator.

3.???? Consider Contractors and Operator Employees the Same.

Regarding personnel training and qualification, operators should consider contractors the same as operator employees. Both groups of individuals should be provided the same quality of training, the same training materials, and the same qualification processes. Eliminating variances between operator and contractor qualification programs will greatly reduce the operator’s time spent reviewing contractor qualification programs, as well as the regulatory risk and civil liability due to inconsistencies.

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