The vendor who offers the best deal scores the big contract, right? After all, large companies are always on the hunt for the highest possible profit margin. Well, that’s a common misconception, and especially so in the exploration and production world.
E&P companies run through a list of financial questions when determining which vendor to hire for specific projects. What’s the overall cost? What are the day-to-day projections? What are the bids on the table?
I have seen all of these questions thrown out in high-level decision-making meetings in favor of finding the vendor with the strongest and most comprehensive safety program, even if that vendor had a higher asking price for their services.
Making the Right Long-Term Investment
Looking at this from a financial perspective, let’s say that an E&P company hires a vendor that does not employ a comprehensive safety program. They prefer to market themselves at a lower cost. If an OSHA violation occurs during the project, the fine will quickly offset any perceived “savings.” OSHA is just as likely to charge the project owners as they are the vendor.
Safety violations and accidents can delay the project’s completion time in general, which is a considerable cost in and of itself. I believe that for every dollar spent on a safety-focused area within a department, project owners are going to see a three to four dollar return if – it’s done right.
When advertising their services, vendors will often describe their efficiency, punctuality, and overall quality of work. In my view, safety needs to be a factor vendors lead with when pursuing new contracts in the E&P field.
And, these values vendors bring to the table aren’t mutually exclusive from safety. I used to work with a former E&P executive who oversaw a drilling department that consisted of hundreds of rigs in operation. He told me that the most efficient rig was always, at the same time, the safest rig. This understanding led to him pushing back whenever an operations team didn’t see safety as a top priority.
Getting the Entire Team on Board
Any tension between the operations and the safety departments needs resolution as quickly as possible. For me, the most effective way to accomplish this is to adopt a company-wide culture of safety that permeates from the top down.
If leadership understands that safety is a top concern for any project, I believe they should instill that knowledge across every team in the workforce. Every employee should partially operate as a safety representative so that collectively, efficiency increases across the board. And this includes the sales team. Safety should be one of the top bullets that vendors use to advertise their services. Why? Because project owners in the E&P field more than anything are looking for a return on their investment when it comes to safety protocols.
Where KPA Comes In
KPA provides the safety tools and services that project owners in the E&P industry are looking for when it comes to hiring vendors. Our readily accessible, all-in-one platform and training solutions include a complete view of all safety areas for both employees and managers alike. Whatever the situation calls for, we have your back.