Wisconsin Department of Transportation lags behind peers in setting

Daily Reporter (Milwaukee), May 14, 2008 by Sean Ryan

Editor's note: The following story kicks off an occasional series inspired by the April 2 gas-line explosion in Oconomowoc and the discovery that the Wisconsin Department of Transportation does not check safety records when hiring contractors.

Quad/Graphics Inc. won't hire contractors with below-average safety records.

Joe Muehlbach, director of facilities and environmental policy for the Sussex-based printer, said if contractors' safety records make him nervous, he chucks their files. It's a matter, he said, of being socially responsible and not inheriting risk from an irresponsible contractor.

"It's not worth it," Muehlbach said. "The couple of dollars you might save is not worth the potential headaches down the road."

C.R. Meyer and Sons Co., Oshkosh, disqualifies subcontractors with safety records worse than its own.

Wisconsin's Division of State Facilities won't hire low bidders with high workers' compensation rates.

But the Wisconsin Department of Transpor-tation doesn't have anything in place that resembles those programs. The agency first considered including safety checks in pre-qualification after its contractor hit a gas line that blew up a church April 2 in Oconomowoc, but WisDOT won't have a solid plan until fall, said Donald J. Miller, the agency's project develop-ment director.

Private companies and general contractors that hire contractors often check safety histories, said George Yoksas, Milwaukee-area director for the Occupational Safety and Health Administration. It works, he said.

"In those facilities where safety and health is considered, there's been notably less accidents, injuries and illness," he said. "For the people that deal with it, it has been a success."

Yoksas said he cannot speak on behalf of OSHA, and would therefore not comment on whether WisDOT should adopt similar practices.

"I have my views, and those are my views," he said. "Safety and health is important in all aspects, whether it's in the private sector or in government sector."

There are many ways to gauge companies' safety histories, but it is best to check their OSHA 300 logs, which tally all lost-time injuries, and their workers' compensation experience modification rates, said Dan Burazin, safety director for the Associated General Contractors of Greater Milwaukee. An EMR of 1 is average, while 1.2 is 20 percent worse than average.

C.R. Meyer's rate is less than 1, and it requires subcontractors to at least equal its EMR as well as its worker-injury rates on the OSHA 300 log, said Fred Rideout, director of risk management for C.R. Meyer. He said the company sets such requirements "so people can go home at night and be with their families."

"That's the No. 1 reason," Rideout said. "It's the right thing to do."

As a secondary benefit, this enables C.R. Meyer to compare its safety record to the competition, Rideout said.

"You don't want to be the cheapest guy on the block," he said. "There's a value to doing business safely, and that costs money."

The drive to be the lowest bidder always has run against AGC's efforts to get generals to qualify subcontractors based on safety, Burazin said.

"No doubt about it," he said. "We've known that for a long time."

The conflict between lowest bid and best safety practices becomes a challenge for public agencies that must follow state contracting laws, Muehlbach said. He suggested public agencies set thresholds for contractors' performance-bond rates to avoid companies with bad safety records.

"I think it would be nice if they could," he said. "But the laws that surround public bids for contract work pretty much control what you can or cannot do."

The DSF began using the EMR as its safety standard four years ago after industries complained the agency's methods were too arbitrary, said David Helbach, secretary of the DSF. It lets all companies bid on contracts, but the division won't sign with a contractor if its EMR is 1.2 or higher.

"I think the institutional history, as well as the statutory requirement, is that the intent of our department is to have open, transparent, fair bidding," Helbach said.

When the new standard was created four years ago, some wanted it to be set at 1, others at 1.5, so 1.2 is a compromise, said Tab Tabrizi, director of the DSF's Bureau of Architecture and Engineering Services.

Muehlbach noted Quad/Graphics hired builders to construct 10 million square feet of building space since 1988, and he said contractors with good safety records aren't necessarily more expensive.

"To be honest, I think you can find very competent contractors without paying a premium just because they maintain a safe environment," he said. "I don't think you need to compromise price to get good safety."

Miller at WisDOT said he isn't familiar with the DSF's methods, but he plans to look into it. He said he also is checking the city of Madison and Dane County's systems of requesting contractors' safety records during the pre-qualification process.

WisDOT uses its debarment process to disqualify contractors from bidding, Miller said, and the agency will look at other government policies to determine how to use safety information it collects during pre-qualification.