Marisco South Ltd: Engaging contractors

Further guidance on the contractor engagement review process

There are two separate reviews that must be completed before a contractor sets foot on any site to commence work:

1. The on-boarding review.

2. The project-specific review.

Department responsibilities for engaging a contractor

There are six departmental teams who are involved:

1. The Procurement team.

2. The Operational team.

3. The H&S team.

4. The Human Resources (HR) team.

5. The Finance team.

6. The Corporate Risk team.

1. The Procurement Team:

Procurement is responsible for carrying out two separate tasks with respect to engaging a contractor:

  • The first is the initial contractor on-boarding review that is carried out to establish the general competency, H&S policies, and insurance credentials of the contractor that must be completed in advance of engaging them for a specific project. The on-boarding review is only completed when the Corporate Risk team records their approval on the Approved Contractor List published on the MOD's Compliance folder.
  • The second review is the more exacting contractor project-specific review that seeks to confirm the specific arrangements to be made between the contractor and Marisco for each site the contractor is requested to work on. It will result in a a written commercial contract to set out the terms, the implementation timetable, and the respective responsibilities of each party to complete the work involved. As every project is different, it will also determine if the intended work falls within the scope of CIS, and in turn which VAT system we must inform the contractor to invoice us under if they are VAT registered.

The Procurement team will be responsible for collecting in the required compliance documentation. They also retain the responsibilities for maintaining and managing the information published on the MOD's Approved Contractor List. Their responsibility for managing the project specific review for each individual project ends when the Operations and H&S teams both confirmed they have cleared the contractor to begin work on a specific site.

The Procurement team is required to keep the Operational, H&S and Finance teams informed of the progress of the negotiations with a contractor to attend a specific site. The Procurement and Operational teams must cooperate to agree upon a date and time when the contractor will arrive on site. This is necessary because the Operational team's site managers or supervisor must attend at the same time to induct the contractor's operative(s) onto site. The Procurement team must also advise the H&S when a contractor will be on any site so they can carry out a compliance audit.

The Procurement team must ensure that where the work falls within the scope of CIS, the contractor does not begin work ahead of the Finance team verifying the contractor on-line with the HMRC, and advising the contractor what VAT system to apply when they invoice Marisco.

2. The Operational Team:

Part of their role will be to work with Procurement team to assist them to complete the on-boarding and project reviews. However, their primary role of the Operational team begins once they and the H&S team have cleared the contractor to begin work on a particular project. Their responsibilities will include working with the contractor to ensure:

  • They both fulfill their respective duties under the CDM Regulations 2015 where either one of the parties parties is a duty holder (e.g. the Client, the Principal Designer, or the Principal Contractor).
  • The contractor fulfills their duties as a responsible person under the Fire Safety Regulations.
  • The contractors meets all relevant Building Standards as they go about their work.
  • The contractors provides all of the information our clients may require to fulfill their duties as an accountable person under the Building Safety Act 2022.

The Operational team must ensure the Site Manager or their Supervisor is available to induct the contractor's operatives onto site and police their behavior and compliance with the site's safe-working rules until they complete their work and leave site.

The Operational team does not have the authority to unilaterally engage a contractor. They must request the Procurement team to carry out a on-boarding review first if necessary, and then a project-specific review. This process can take up to three weeks to complete. So, it is important to plan a sufficient lead time. There is a commonsense exception. In the event of an emergency that requires the intervention of a specialist third-party contractor to be brought onto site at short notice to fix a specific problem, the normal need to involve the Procurement team can be waived. This is a last-resort, emergency option to prevent potential harm to residents or damage to our clients' site property. The Operational manager exercising an emergency call-in will be subject to a post-incident investigation to confirm the situation warranted the breach of normal procedure.

It is imperative that the Operational team takes the lead on when a contractor can attend their sites. Arrangements will need to be made for a site manager or a site supervisor to induct the contractor's operatives onto site and subsequently police their behavior and compliance with the site's safe-working rules until they complete their work and leave site. They will also need to coordinate the timing of the arrival of the contractor's operatives to dovetail them into the smooth running of the project plan and maintain site safety.

The Operational team must also inform in advance the H&S of when a contractor's operatives will be on-site, so they can plan any visits to audit site H&S compliance.

3. The H&S Team:

They will work with the Procurement and Operational teams to carry out critical assessments of the contractor's supplied risk assessments and methods statements to ensure they meet an acceptable standard. The H&S involvement should become involved early on in the on-boarding review of a each potential contractor to ensure they are satisfied they can meet the competency and H&S standards required by statute and best practice (HSE guidance).

With regards to completion of the project-specific review the contractor is expected to supply their site-specific risk assessments and method statements (RAMS) for approval by the H&S team in advance of the date it has been agreed with the Operational team that work should commence. It is an mutable legal requirement that every contractor prepares suitable and sufficient RAMS to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all their operatives [Section 2.1 HASAW 1974]. It is the legal duty of the H&S team under Section 3 HASAW 1974, to ensure that Marisco organise their work in such away as to take all steps, so far as is reasonably practicable, that contractors engaged by them, are not exposed to risks to their health or safety. It follows that if a contractor does not supply a set of site-specific RAMS they cannot begin work on site. If the supplied RAMS have not been approved by the H&S team they cannot begin work on site.

The Procurement and Operational teams must keep the H&S team appraised of the time and dates contractor will be attending site so they can organise any site audit visits to monitor the site safety compliance of the contractor's operatives in practice. Senior H&S have the authority to stop a contractor from working unsafely.

4. The HR Team:

The HR team will lead the appointment of an individual who is to be engaged as 'worker' under tax and employment law.

It is their responsibility to:

  • Agree a suitable rate of remuneration with the worker.
  • Arrange with View-HR to provide a casual worker contract of engagement.
  • Explain to the worker how they must submit timesheets to enable the Finance team to remunerate them.
  • Add them worker to the Citation system.
  • Liaise with the Operations and H&S teams to arrange a day of induction and Citation training.
  • Liaise with the Procurement and Operations teams to confirm how the worker will be engaged when required.
  • Liaise with the Finance team to have the worker added to the monthly payroll.
  • Explain to the worker how they must submit timesheets to the Finance team in order to be paid each month.

5. The Finance Team:

The Finance team will assist the Procurement team to:

  • Determine the employment status of the contractor based on the written terms of engagement, and decide how they are to be remunerated under the correct tax regime.
  • Validate contractors with the HMRC if they qualify to be remunerated under the CIS taxation system.
  • Liaise with the HR team to assist the setting up and operation of a casual worker.
  • Advise the Procurement team which VAT system a contractor must use to submit their invoices if they are VAT registered.

6. The Corporate Risk team:

The topic of proving contractor competency will be high on the compliance agenda for many of our clients in the coming year as the Building Safety Regulator(BSR) continues to enforce the provisions of the Building Safety Act 2022, many of which came into force in October 2023.

The subject of controlling the appointment of contractors and what they do on site, has become a critical risk consideration that board-level managers within our clients must now regularly consider and address. The obvious solution to the problem that some local authorities have already adopted is to introduce a strict work permit and reporting system that controls and restricts what work their property refurbishment contractors can carry out each day. Many built environment agencies are promoting the work permit system as the only way our client's Building Safety Managers can assure their Boards that they are controlling what contractors like Marisco are actually doing on site.

It is inevitable that the way we work with many of our clients is going to undergo a radical change in the next few years. We have no say in the matter. We either comply, or we lose the contracts. The Corporate Risk team's role is to ensure we anticipate the challenges and changes that are being forced upon our clients, and ensure they know we are well ahead of the same compliance curve they are adopting. The aim is to prove to our clients we are a competent contractor they can rely upon under the new building safety regime, before they have to ask us.

So, the Corporate Risk team's role in overseeing the engagement of our own contractors, is to ensure we adhere to our own corporate policies concerning that process.

In summary:

The Procurement team take the lead and also shoulder most of the work for engaging a contractor simply because they are the stakeholder who initiates and controls the on-boarding and project-specific reviews right up to the point in time when the Operations teams takes over as the contractor steps foot on a site to begin work.

The only way the engagement of a contractor can be carried out compliantly to meet all the regulations and achieve the operational efficiency we need as a high-volume, low-margin business, is by everyone cooperating to complete a tedious but nonetheless legally necessary task, and accepting the process can take weeks to complete.

Marisco Group

Head Office:
Unit J5, The Fulcrum
Vantage Way, Poole, BH12 4NU

Tel: 01202 474001

Email: accounts@mariscosouth.com

Marisco South Ltd is registered with: