By Ben Snyman, Cofounder and CEO, AuditSoft
Ben holds a B.Comm, LLB, and MBA. He is a qualified attorney and is trained as an ISO 45001 Internal and Lead Auditor. With over 30 years of experience, Ben is recognized as an expert in operational, legal, and regulatory risk management. Connect with Ben on LinkedIn.
Contractors play a critical role in delivering projects across construction, infrastructure, energy, and other industries. Yet while hiring contractors can offer flexibility and expertise, it also introduces significant health, safety, legal, and financial risks.
Too often, organizations mistakenly treat contractor vetting as a procurement task—focused on pricing, timelines, and deliverables. In reality, contractor prequalification is much more: it is a core risk management control that strengthens your Occupational Health and Safety Management System (OHSMS) and demonstrates legal due diligence.
This difference was highlighted by the R. v. Greater Sudbury case, which reaffirmed that organizations cannot outsource risk and will be held accountable for the safety practices of contractors they engage.
Understanding the difference between prequalification and procurement is essential for protecting your workers, projects, and reputation—and for meeting your legal obligations under occupational health and safety laws.
Prequalification is not about filling out paperwork. It is a proactive, preventative process designed to ensure that every contractor you engage is capable of working safely and responsibly—before they step foot on site.
Strong contractor prequalification practices help organizations:
Screen out unqualified or high-risk contractors early
Confirm contractors’ ability to deliver work safely and meet standards
Monitor ongoing compliance with health, safety, and regulatory requirements
Satisfy legal responsibilities under occupational health and safety legislation
This is more than best practice—it’s a fundamental expectation in today’s regulatory landscape. As Ryan Conlin, legal counsel involved in R. v. Greater Sudbury, emphasized in a recent presentation:
“Prequalifying contractors by checking their health & safety documentation and records is the one proactive step a court will expect in every case to prove due diligence.”
Failing to properly vet contractors can expose an organization to legal liability, fines, project delays, and serious incidents.
Prequalification is often confused with procurement, but it is a separate activity that should take place before procurement or as part of it.
Procurement decisions should not be based on cost alone. It is vital that the contractor can deliver the job safely, efficiently, and in compliance with all legal and safety requirements.
That’s why procurement and prequalification require different software to support these two separate activities.
| Prequalification Software | Procurement Software |
|---|---|
| Verifies health, safety, insurance, and financial requirements before bids | Focuses primarily on pricing and bid management |
| Evaluates compliance history and certifications | Lacks formal contractor risk assessments |
| Tracks real-time contractor compliance | No compliance tracking after contract award |
| Syncs with site-level safety and worker systems | No integration with health and safety systems |
| Supports due diligence defense in legal cases | Limited visibility once the contract is signed |
If hiring decisions are based on price alone—without considering health and safety performance—organizations expose themselves to serious risks that can undermine projects and endanger lives.
Contractor prequalification is not a checkbox or an administrative burden. It’s a vital safeguard for protecting people, projects, and organizations. By embedding strong prequalification processes into your contractor management strategy, you can significantly reduce risk, demonstrate due diligence, and improve project outcomes.
At AuditSoft, we launched ContractorXchange to help organizations simplify and enhance prequalification—giving them the visibility, confidence, and compliance tracking needed to manage contractor risks effectively from day one. Join our webinar to learn more.
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