On The Floor: Discussing Contract Services — Demand-Side Views
Jane Alexander | November 15, 2016
What outside resources does a plant turn to when it simply doesn’t have enough qualified in-house personnel to stay up and running safely, efficiently, cleanly, and profitably? Given the ongoing skilled-workforce crisis, which, depending on sector, region, and who you talk to, is improving, lingering, or growing, outside-service providers (including contractors and consultants) often seem to be the only way to fill the void. Diving headfirst into the issue, this month we asked our MT Reader Panelists the following questions.
1. Did their organizations (or, if they were consultants or other suppliers to industry, did their clients/customers) use contractors or contract service providers in the areas of reliability, maintenance, and/or operations?
2. What specific types of work were these contract service providers doing, and could it be improved?
3. What benefits or payback were being realized from the use of the contractors or contract service providers?
We received so many responses from users and service providers alike, that we’ve chosen to run them in two installments (November and December). This month, we present answers, edited for brevity and clarity, from a somewhat varying end-user perspective.
College Electrical Laboratory, Manager/Instructor, West…
Yes, we use contractors and contract labor for expansion projects and extra maintenance programs. The main reasons we use outside staff are that time is money, and special skilled labor is expensive. (We don’t hire any very specialized skills that would just sit around until they are needed.)
We use contractors in [the areas of] HVAC, plumbing, pipe fitting, and several types of electrical specialties, among others. The project manager keeps track of all the skilled contractors involved in a certain project and follows up daily on their progress. Our contracts have clauses related to safety issues, quality, and timetable requirements.
Many of our contractors have done business [with us] for 15 years or more and are very reliable. The main benefits are that they understand our processes, safety requirements, and the quality of work that’s required. Most of our processes run on a 24/7 basis, with scheduled downtime, and our hourly production time is very costly.
In my opinion, our contractors save us more money than they receive.
Engineer, Process Industries, Southeast…
We use contractors for reliability and for major maintenance/modifications. (We’re a small company with an in-house maintenance team that takes care of daily maintenance and calibration items.) We use “specialty” contractors for HVAC, fire protection, air compressors, and as grounds keepers. They all do a good job.
Being a smaller facility, we don’t have to have a “specialist” on site that can work on all of the equipment. Generally, the amount of contracted work does not require someone’s full-time attention.
Maintenance Supervisor, Process Industries, Canada…
Our site uses contractors in the case of downturns or for other situations where we can add or take away people quickly and with no cost to us, i.e., union severances, etc.
Our contractors mostly do project-based work or help maintenance staff if they become overwhelmed by calls to repair equipment. We are satisfied at this time with our contractors and the services they provide.
Maintenance Leader, Discrete Mfg, Midwest…
Our trades personnel are responsible for everything that is related to manufacturing parts for our products. We have contractors that cover anything that is related to building maintenance. In some cases, especially where steam, gas, and water are used, our people will assist the contractors. The main reason for our site’s use of contractors involves the loss of trades that we’ve seen over the years. Plus our in-house trades are working on proactive and reactive maintenance jobs.
Most of our contractors are aware of what they can work on, and they pretty much stick to it. In fact, in some cases, they’ve had parts on hand or available when our vendors haven’t, and they have made those parts available to us.
The biggest benefit I can think of with regard to our use of contractors is that it allows in-house trades to concentrate on machinery issues instead of facility issues.
Plant Engineer, Institutional Facilities, Midwest…
We use contractors to maintain and/or repair specialty equipment that requires costly training and tools. That includes large centrifugal water chillers, Phoenix fume-hood controls and VAV boxes, stand-by generators, cooling towers, and boilers. We also have contractors on standby for assistance with fire and flood cleanup, mold issues in buildings, roof repairs, emergency-power equipment, and temporary heating/cooling, as well as with the previously mentioned chillers, boilers, and generators.
Overall we’ve been satisfied with our contractors. The cost keeps going up, however, which makes us want to do more in-house maintenance and repairs (if at all possible).
The payback seems to be that we don’t lose critical equipment for long periods of time given the contractors on stand-by for our emergency needs. If repairs are made in a timely manner, it prevents us from having to cancel any classes or university functions. As a university with a large student population, a hospital, several large dormitories, two power plants, supplying either 130-lb. steam or high-temperature (375 F) hot water, and two chiller plants for more than 100 buildings, all types of problems can arise.
Reliability Specialist, Discrete Mfg, Midwest…
Yes, we use a contractor for maintenance support at our facility [through a three-year maintenance-service agreement]. It [the contractor] received special concessions from the union’s craft labor, which assured the union that its labor force would be used and we [the site] would receive value in discounted labor.
The contractor is deployed on a regular basis for plant maintenance and outage activities. The scope of work ranges from millwrights actively doing equipment overhauls and rebuilds, pipefitters doing miscellaneous piping projects, and ironworkers, boilermakers, laborers, and operators sporadically dispatched [on an as-needed basis] for non-outage and outage work to help support the plant maintenance department. I believe there is room for improvement.
Unless you do a specific individual call for labor, odds are 85% of the time, an unskilled craftsman will be provided. It’s gotten to the point we [now] specify the required skill sets to do a job, and if unqualified people are dispatched, we can send them off the job without having to pay the union’s show-up of four hours. Since initiating this approach, the dispatchers have become more careful [in sending personnel], and inform us if they don’t have qualified people to fill a job.
Continued use of our contractor [in my opinion] strains the facility’s maintenance budget. Our goal is to get our maintenance backlog under control with contract labor and, from that point on, only use it when necessary for emergency and scheduled outages. If properly deployed as sporadic labor [as necessary], there’s value in not having to increase our in-house labor force. Our current situation, however, is like the college student living at home who doesn’t want to go out on his own: providing little value and expensive to have around.
Coming next month
Look for “Supply-Side Views” on the contract-services discussion in December’s “On the Floor.”