Appointing a principal contractor only protects a project owner if the contractor can actually carry the duties being placed on it. That is why the capability assessment, the work done before the appointment of the Principal Contractor is finalised, matters as much as the contract that records it. A sound appointment rests on a genuine judgement that the principal contractor can manage the safety of this site, and a defensible appointment rests on being able to show how that judgement was reached.
This article sets out what a WHS capability assessment is for, what it examines, and how far it should go. It follows on from the wider question of principal contractor WHS due diligence, and it is written for project owner and their officers who appoint and oversee principal contractors. The framing follows the model WHS laws, while Victoria operates under its own Occupational Health and Safety Act 2004.
Capability means “real capability” for this project
The relevant question is not whether a contractor is capable in general, but whether it can discharge the principal contractor duties on the project in front of the project owner. Those duties include managing the WHS risks of the construction work, preparing and maintaining the WHS management plan, coordinating the safe work method statements for high-risk construction work, and controlling the site. Capability has to be judged against that workload and against the project’s actual hazards. Typically, many of the available contractor software suites miss these fundamental areas. They show the uploaded documents as compliance based on scans but often miss WHS capability criteria.
The hazard profile is what gives the assessment its shape. High-risk construction work is defined in the WHS Regulation and covers eighteen categories, among them work with a risk of a fall of more than two metres, work in or near a trench deeper than 1.5 metres, work on or near energised electrical installations, the demolition of load-bearing elements, the disturbance of asbestos, and tilt-up or precast concrete. A contractor with a strong record in low-rise fit-out may be untested on a project dominated by those activities. Capability is relative to the work, so the assessment starts by understanding what the project will actually require.
The assessment is part of officer due diligence
Officers of the commissioning organisation owe a due diligence duty, which requires them to take reasonable steps to understand the hazards of the work and to ensure the organisation has and uses appropriate resources and processes to control them. On a contracted project, assessing the principal contractor’s capability before the appointment is a direct way of meeting that standard. The assessment serves two ends at once, confirming that the contractor can carry the duties and producing the record that shows the officer’s decision rested on verification. Both ends are served only if the assessment is documented.
What a WHS capability assessment examines
The first area is the contractor’s WHS management system, judged on whether it is mature and used in practice rather than whether it exists. Alignment with AS/NZS ISO 45001 is a useful reference point, although certification on its own does not prove how the system will perform on the site with the specific works. The assessment looks for evidence that the system drives daily decisions, that workers know it, and that it is reviewed when things go wrong.
The second area is relevant experience. The question is whether the contractor has delivered work of comparable type, scale, and complexity, and whether it has managed the specific high-risk construction activities the project will involve. Experience on a different class of work is not a reliable guide to performance on this one.
The third area is performance history. Lost-time and total-recordable injury measures are worth collecting, but they are lagging indicators and can be affected by reporting practices, so they should be read with care rather than taken at face value. Regulator enforcement history carries more weight, including improvement and prohibition notices, enforceable undertakings, and any prosecutions. What the contractor learned from past incidents, and what it changed afterwards, often tells the project owner more than the raw numbers.
The fourth area is resourcing and competence. The assessment identifies the people who will actually run the site, the level of supervision proposed, and the competencies and high-risk work licences held by the workers carrying out the work. A capable system delivered by an under-resourced team will not hold up under the pressure of the project.
The fifth area is subcontractor management, because subcontractors carry out much of the work on a construction site. The project owner needs to understand how the principal contractor selects, inducts, and verifies its own chain, since the principal contractor’s safety performance is in large part a function of how well it manages the parties below it.
The sixth area is the set of formal authorisations, being current licences, registrations, high-risk work licences, and insurance adequate to the project. These are necessary conditions rather than sufficient ones, and they are quick to check, so they belong early in the assessment.
Prequalification is the starting reference, not the assessment
A listing on a state prequalification register, or accreditation under the Commonwealth scheme administered by the Federal Safety Commissioner, confirms that a contractor met a defined baseline at a point in time. These schemes are a useful screen, and they save the project owner from re-checking matters that have already been tested. They do not, on their own, confirm that the contractor will perform on the particular project in front of the project owner, under the particular pressures of that job. The sound approach is to use prequalification to narrow the field, then assess the shortlisted contractor against the project.
Match the depth of the assessment to the risk
The effort that goes into the assessment should be proportionate to what is at stake. A project dominated by high-risk construction work, or a complex site with many contractors working at once, warrants deeper verification, including site visits to current projects, interviews with the people who would run the work, and sampling of the contractor’s actual records rather than its templates. A smaller, lower-hazard project may call for less. The principle is that the depth of the assessment should track the consequences of getting the appointment wrong.
From assessing contractor WHS capability to appointment
The assessment earns its value when it carries through into the appointment itself. Findings translate into the terms of the engagement, into any conditions placed on the contractor, and into the authorisation that gives the principal contractor management or control of the workplace and the duties that come with it. The same findings set the baseline for how the contractor will be monitored during delivery, which is the subject of the next article in this series. Recorded properly, the assessment is also the evidence an officer relies on to show the appointment was made on a reasoned basis.
How Safetysure can help
Safetysure provides independent WHS capability assessments for project owner appointing principal contractors, from Brisbane and across Australia, including for government agencies. The firm assesses a prospective contractor against the demands of the specific project, examines the substance of its management system and its record rather than its paperwork, and reports in terms a project owner and its officers can act on and rely on. That work sits alongside safety auditing and verification during delivery, and the broader task of managing contractors and their WHS responsibilities. For organisations that prefer the discipline embedded, outsourced safety places a retained adviser alongside the procurement and project teams, and WHS audit work is available across the industries the organisation supports. To discuss an assessment, the team can be reached through the contact page or on 1300 087 888.
Safetysure is an ISO 9001/45001/14001-accredited workplace health, safety and occupational hygiene consultancy based in Brisbane. This article is general information and not legal advice. Duty holders should verify current obligations against the legislation applicable in their jurisdiction.
You might like to read our article on choosing a WHS Auditor Wisely
Frequently asked questions
What does “WHS capability” mean when appointing a principal contractor?
The ability to discharge the principal contractor duties on the specific project, including managing the construction risks, preparing and maintaining the WHS management plan, coordinating safe work method statements, and controlling the site. Capability is judged against the project’s actual hazards, not in the abstract.
Is a current prequalification listing enough to confirm capability?
No. A listing on a state prequalification register, or accreditation under the Commonwealth scheme, confirms a contractor met a defined baseline at a point in time. It is a useful screen, but the project owner t still needs to confirm the contractor can perform on the particular project in front of it.
How does assessing a contractor relate to officer due diligence?
Officers must exercise due diligence to ensure their organisation meets its WHS duties, which includes taking reasonable steps to understand the hazards and to ensure appropriate resources and processes are in place. Assessing a prospective principal contractor’s capability before appointment is a direct way to meet that standard on a contracted project, provided it is recorded.
What should the assessment actually examine?
The maturity and use of the contractor’s WHS management system, relevant experience with the specific high-risk construction work, safety performance and enforcement history, the people and supervision resourcing the site, how the contractor manages its own subcontractors, and current licences, authorisations, and insurances.
How deep should the assessment go?
In proportion to the project’s risk. A site dominated by high-risk construction work, or a complex project with many contractors, warrants deeper verification such as site visits, interviews, and document sampling, while a lower-hazard job may need less. The depth should match the consequences of getting the appointment wrong.