Construction Risk Management in a Hard Economy: The Risks
TJ Lyons | April 1, 2009
Recently the question was posed, "What will be the impact be on safety as we shoulder our way through these tough economic times?" One would immediately think things will turn sour, safety will take a backseat to production, and cranes will again be falling. In fact, though there will be weakness and a tendency for taking shortcuts, there are huge opportunities ahead.
Having just finished a tour of 33 sites in 30 days in 8 states, it is clear the construction world is getting safer, and I was happy with what I saw. Fall exposures are being controlled, sites are better organized, and the workforce is now involved in safety on their project. Operational teams are taking on the safety responsibility (like quality), as an element of building, not an obstacle to scheduling. Our sites appear safer. However, keep in mind that we hear about construction catastrophes on the news, but never about the guy that did not fall or the fire that did not spread due to a lone sprinkler. Consider the last time you got a letter from the Occupational Safety and Health Administration (OSHA) saying, "Congratulation partner—your site looked great today!"
This column details area to be worried about now, balanced with real opportunities to seize on during these tough times.
The People
Firms are making the decision on operating profits based on the cost of good people. Those seen as "constructors" are primary to the job, while other roles—like safety coordinators and quality control officers—will be considered for elimination.
Leaders will ask themselves "Can we get away without a safety coordinator and just have the superintendent take on that role?" Or "I don't want to lose my lead foreman so maybe I will lay-off the safety person and have the foreman take that on for a while." All these are valid decisions and have to be considered in today's uncomfortable climate, as decisions, made in offices across the world, are affecting the business of safety today. I suspect few safety professionals are totally secure in their job prospects and situations this year and next.
During the investigation into the Columbia space shuttle explosion, one finding was the effect on good people leaving an organization due to reorganization:
As more employees have departed, the workload and stress (on those) remaining have increased with a corresponding increase in the potential for impacts to operational capacity and safety.
Source: Columbia Accident Investigation Report, Vol. 1.
The flipside of this atmosphere is the available labor force has become bloated with workers from both ends of the bell curve. Those that could not get work due to performance, attitudes, or habits are waiting for a call, but so are the best of the best who are now available for a job. Never has there been a more qualified pool of workers and supervisors in the United States.
What Will Be Affected
Consider the following cases where cutting costs will directly affect the safety on a project. Though going cheap is not a new idea to many contractors, it will be attempted. The biggest concern is the effect on crane operations, for even little decisions based on cost have huge implications. More on that later. Following are other common cost-cutting areas, along with examples.
Stored Materials
Firms will need more cash as credit availability becomes elusive. Two direct threats result from this: physical overloading of floors and scaffold from materials and the potential increase in fire-load from stored materials.
Overloading Floor Loads
Floors in most buildings range from 50 to 150 pounds per square foot (expected weight imposed), depending on the use of the space—sofas are light, but a generator is heavy. Consider a firm installing Sheetrock in a condominium that obtains a sufficient break in the cost of the materials if it is all purchased and delivered by the end of the month. Not having a warehouse, the contractor negotiates with the general contractor (GC) to load the building overnight so the GC can call this work-in-place and bill the owner early.
During an inspection by the insurer, stacks of Sheetrock (80 sheets high) are noted throughout the building, and the imposed load questioned. The installer explained that in fact, since the stack was laying flat on the ground, the load was dispersed on the floor and the weight was calculated at #140 per square foot, which is within the acceptable range. However, upon closer examination, it becomes obvious that the installer has rested the entire load on two small strips of Sheetrock, concentrating the entire load (over 4,000 lbs.) on just 2 square feet at every stack. You can do the math on that one.
Fire Risk of Stored Materials
Once the condominium was enclosed, it was time to start installing some 300 wooden doors throughout the building. Since they all came from the same vendor, the installer received the permission of the general contractor to store the entire shipment in the basement. When they arrived, each door was wrapped in polyethylene sheeting and cardboard for protection. The owner was billed for work-in-place.
A fire started in the basement and due to the large fire load of wood, plastic, and cardboard—without any sprinkler protection or fire doors—the fire soon spread to the rest of the building. This was a catastrophic loss. As for the doors, the insurer was notified and responded that the general contractor had failed live up to a specific clause in his coverage: he had an "obligation to protect the stored materials." No coverage.
Worker Protection
Rebar caps were invented to keep good people from falling on sharp things. Such caps will reduce the injury if someone falls on the rebar (though that's like putting a bell on the cow rather than fixing the fence). Often seen on construction sites is a "mushroom" cap. At about a third the cost of the correct, square rebar cap, contractors on projects (where no one knows better) will use these mushroom caps to cut costs. If and when you see these, consider them an indication of incompetence, and have the guy in charge go work elsewhere for another firm. These caps fail easily as you can see in the following image..
Example of Mushroom Cap Improperly Covering Rebar
Fall Prevention
Falls are obvious hazards, so contractors will try to keep their employers working inside something to keep folks from hurting themselves. My theory (termed "Lyonetics") assumes that you must remove the worker from making any safety decision, so protecting workers from any fall is the answer.
Fall prevention is one critical area where we will see cheaper approaches to safety. When large open areas are made, wires are installed along the edge of the building to prevent falls. Archaic? Absolutely, but it's not about to change anytime soon. In most cases, it is protocol to install a robust cable and to secure these with meaty clamps to keep the wires tight and people inside. Yet, in the following photo (received from a safety professional), a cheap approach results in a sad attempt at this critical protection.
Example of Inadequate Cable Meant to Provide Perimeter Protection
Though a failure of operational planning (how was this even allowed to be installed?), it indicates how contractors will approach cost-cutting while increasing the owners' risk. Not only is this cable unsuitable for a dog run, but the installation does not conform to any standard of care. The false sense of security this shoddy system will instill on a project must be considered and avoided.
Cranes
This is an area where going cheap will occur and will pose a significant threat to the industry. Consider the following example.
Contributors
A large tracked crane is expected on the project to erect steel. The intended crane has a huge safety factor and would be able to handle any load. Instead, a smaller, cheaper crane is rented. It will be operating at its safety limit.
In preparation, the pad where the crane sits must be perfectly level and solid. To save money, the GC asks the landscaper—not a crew experienced in this work—to prepare the pad. He says, "Anthony, I need you to put a crane pad together. Make it big and flat." So Landscaper Anthony goes to work. The weather has been beautiful and dry, so he scrapes the ground with his skid-steer, brings in some stone, and prepares the pad.
The crane arrives. Again in an effort to save money, material from the last job is used to make timber (mats) needed to put under the crane. Rain is forecast, so the crane operator returns 2 days later and goes to work. After 2 hours, the rotten cribbing becomes kindling, and the soil turns to mud. A light wind blows, the crane goes over, and confused workers mill about blaming each other.
First, Landscaper Anthony gauged the "level" of the crane pads using his own experience and not science. Unfortunately, his pad was off by 3 degrees—something not readily apparent by looking at it. After the rain, the soil was saturated like a sponge, but like a sponge, you can't really see that it's wet. However, due to the 3 degree tilt of the base of the crane, its lifting capacity was 30 percent less than expected.
Second, the crane company had installed wooden mats that should have been used to grow mushrooms or fuel a bonfire, not support a crane. When the soils failed, the dry timbers cracked under the load. Both these contributors played into the hand of gravity, causing the crane to go over. Consider the following photograph supplied by a friend. Reportedly this wood was so dry handfuls of wood were later removed by hand, yet the company expected it to support a crane.
Example of Inadequate Wooden Mats for Crane Support
Quality of Rigging and Work
A system depends on consistent application of methods, materials, and management. In a recent case, a tower crane was installed without third-party monitoring. Quick note: The recent focus on having third-party inspections of crane assemblies is the best thing general contractors have done to increase crane safety since the anti-two block device (keeps loads from over-traveling the tip).
The safety coordinator held several preplanning sessions to erect the tower crane, and the following promises were made:
- Only U.S. made and stamped rigging (hooks, clevises, etc.) were to be used.
- Only new rigging (wire rope and fabric slings) was to be deployed for the operations.
- All section connections would be inspected for consistency and counterfeit materials—more common than people know.
On the day of the installation, three things soon became apparent:
- Well-used Chinese hooks and clevises were delivered to the project, with no indication as to their capacity or heritage.
- The master rigger started to assemble some shoddy nylon strapping. When asked why he wanted to use such materials, he responded, "Well, I don't want to use the good stuff until later."
- A close inspection of the crane sections—assembled off-site—showed an inconsistency in how they were fastened. See the following photo.
Example of Inconsistent Crane Assembly
The erection was halted, people and rigging replaced; however, the potential for these little contributors to affect both the installation of a tower crane and its operation underscores the concern over a lack of vigilance by the crane owner and the need for safety professionals. "Trust but verify" will be a critical construction safety focus as we head into the next few years of economic downturn.
Conclusion
All the cases described above should be of interest to any risk manager. They point to the tendencies that we should expect and resolve as we put projects together. The introduction of small contributors has to be avoided. Preplanning will eliminate the risk by simply asking pointed questions of those we work with and who work for us.
See "Construction Risk Management in a Hard Economy: The Treasures" for several advantages this troubled economy brings to our projects.
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