Robust contractor management ensures both parties understand their roles and responsibilities, so a successful outcome can be achieved. 

In this article, we explore a scenario that demonstrates what can happen when due process is not followed around contractor management, as well as steps to develop an effective relationship between a hotel and its contractors.

Case study: how to properly manage building contractors

While this scenario is hypothetical, it’s one that’s repeated all too often in hospitality businesses.

Let’s say, a 100-year-old pub is undergoing extensive renovations while still operating during the day, and night contractors such as builders and welders are brought in to do work to bring it up to current standards. However, they have not been properly vetted for their skills or instructed how to carry out the works in a safe manner.

Whilst renovating,  hot works spark a fire in one room that quickly spreads to other parts of the property. Unfortunately, fire management systems such as sprinklers have been turned off allowing the fire to quickly ignite other parts of the heritage-listed building. The pub, a favourite with locals and tourist, is completely destroyed.

This is a tragic situation, one that may have been avoided if proper procedures had been followed. Here are some of the steps that could have been taken to reduce the risk of fire at this pub.

Five steps to better contractor management

It’s imperative to recognise both parties have duties to fulfil when it comes to conducting work at a hospitality venue. These responsibilities start with appropriate planning.

1. Outline the scope of works

The first step should be to define the scope of works. Be clear about exactly what needs to be completed, which includes undertaking a full risk assessment.

2. Detail special precautions

After the scope has been defined, set out any special precautions the contractor is required to take and specify any permits they need to have when undertaking the work.

In the plan, it’s essential to set expectations about how much oversight the team completing the job will require.

3. Choose an appropriate contractor

Part of planning for any construction work at hospitality premises will be selecting the best contractor for the job.

Ask potential contractors to submit a detailed plan as part of this process. This should include a written statement about the methods they will use to do the work and also how they will meet WH&S obligations.

Check skills and prior experience completing similar work when vetting potential contractors. If significant work is required to be done to the premises, to save time, it may be worthwhile to establish a list of pre-vetted contractors, across a number of different trades.

4. Develop a shared understanding of the job

Once plans have been received and a contractor has been chosen, it’s worth talking through the plan with them, to have confidence they understand what’s required. Discuss the work and also how WH&S requirements will be met.

5. Supervise and assess the end result

It’s vital to provide ongoing supervision once the work is underway. The person in charge with this duty needs to have the right skills to assess whether the work being completed is being carried out competently. If hot works are being carried out, a “hot works permit” and a “fire impairment notice” form should be completed.

At the end of the job, the work then needs to be reviewed to make sure it’s sound and meets required standards.

Many applications

While this blog is focused on managing building contractors, these principles also apply to other contractors such as caterers, maintenance staff and cleaners.

Finally, it’s essential to inform your insurer or mutual when undertaking major works on a property so they can help you to manage any risks. This is one of the best ways to reduce the chance of a catastrophe destroying a prime asset.   

For more information on contractor management, please contact either your insurance broker or Xenia directly.

Xenia Mutual Ltd ACN 650 383 430

Important note:

This article contains information of a general nature only. This article has been prepared without taking into account your objectives, financial situations or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information.  Information in this article is subject to change.