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February 11, 2002

National Aeronautics and Space Administration
Attn: Jeff Cullen
NASA Headquarters Office of Procurement
Contract Management Division (Code HK
Washington, DC 20546

VIA E-MAIL: jcullen@hq.nasa.gov

Dear Mr. Cullen:

The American Society of Safety Engineers and its 30,000 member safety, health and environmental professionals applaud the National Aeronautics and Space Administration (NASA) for taking steps to guarantee increased consideration of worker and work site safety in NASA's contracting process with outside firms, as indicated in the Agency's December 13, 2001 Proposed Rule (66 FR 64391)

Founded in 1911, ASSE is the world's oldest, largest and most diverse society of safety professionals. NASA and ASSE have long enjoyed a strong, cooperative professional relationship. The goals of this Proposed Rule match ASSE's mission of protecting people, property and the environment. In fact, many of our members have specific interest and experience in contractor safety management programs.

We must note, however, that ASSE can comment only on the importance that NASA is placing on occupational safety and health in its contracting process. As a general rule, ASSE does not comment on award fees, penalties, or contract structure. Such issues are beyond our purview as a professional society.

The proposed changes will have a positive impact on safety in NASA projects by removing the dollar threshold from the NASA Safety and Health clause in contracts involving construction or hazardous end items or operations, currently set at $1 million; requiring the use of a Safety and Health clause and submission of a Safety and Health Plan when contract performance is on a government facility or when assessed risk warrants inclusion; and strengthening the conditions that must be met for excluding the Safety and Health clause from contracts. These measures will help reduce injuries and possible deaths on NASA work sites.

While the safety of workers will always be the most important consideration, the best possible safety measures on work sites also translates into increased financial savings. Accompanying this comment is a recent article published in ASSE's Management Practice Specialty Newsletter The Compass. The article, which supplements this comment, outlines a variety of considerations that should be taken into account when assessing the typically hidden value of safety and health programs. Increasingly, employers in both the private and public sectors are recognizing that value, as indicated by NASA's proposed rule. That awareness needs to be supported and encouraged by the safety profession, which this comment hopefully succeeds at accomplishing.

As always, ASSE and our members stand ready to assist NASA in any way that we can to help in the implementation of the increased safety guarantees reflected in this Proposed Rule.

Sincerely,

M.E. Greer, CSP
Society President, 2001-02
As printed in the Winter 2001-2002 ASSE Management Practice Specialty Newsletter The Compass at page 1.

SAFETY MANAGEMENT PROGRAMS
MAKE DOLLARS AND SENSE

By Adele L. Abrams, Esq., CMSP

Do safety and health management programs improve a company's bottom line? The answer is a resounding YES, although benefits may be somewhat hard to quantify. But in addition to outright savings on worker's compensation benefit claims, civil liability damages, and litigation expenses, having a solid safety and health management program with top-down commitment will improve productivity and employee morale. It can even make the difference between winning and losing bids and government contracts.

The days are over when companies can view safety and health violations as the status quo, and regard OSHA/MSHA violations and the attendant civil penalties as another "cost of doing business." For one thing, penalties are getting higher and higher. For another, violations that result in the death or serious injury of a worker may be prosecuted at the state level under criminal laws . . . or may result in a referral by OSHA or MSHA to the U.S. Department of Justice. A company may love to see its name in the newspaper . . . but not when it concerns indictment of management personnel!

It is just common sense to recognize that an unhealthy workplace will lead to unhappy workers, and that management must lead by example. Why, then, are corporate safety and health management programs such a hard sell? Why does safety continue to be (erroneously) viewed as the enemy of productivity?

The Hidden Costs of Failed Safety and Health Systems

Anyone who has had the misfortune of witnessing or handling the aftermath of a serious or fatal on-the-job injury knows that, without question, the costs go far beyond those that appear in the company's ledger book. In the manufacturing industry, employees and contractors may suffer job-related amputations, burns, cumulative trauma disorders, crushing injuries, and health conditions including cancer, brain damage, neurological problems and lung disorders. The toll that such injuries - even where non-fatal - take on a worker and his or her family is indescribable.

For those who survive, or who work with the accident or illness victim, the costs continue with psychological stress that may require years of counseling. Many times, co-workers who witness a serious event find themselves unable to return to the worksite at all, which presents additional costs to the company through the abrupt loss of skilled workers. A plant with a singularly bad reputation for safety and health may find itself unable to attract workers at all or may have to pay wages well above market value to do so. These are just a few of the "hidden" costs of a poor safety and health program.

Moreover, as more information concerning a company's OSHA and MSHA compliance and injury/illness experience becomes publicly available over the Internet and from the federal agencies through FOIA requests, foes of industrial growth may use this data to defeat permit applications or zoning change requests. Part of being a "good corporate citizen" - rather than a company that no one wants in their backyard - is offering a safe and healthful work environment to the local residents.

Companies may also "internalize" costs associated with workplace injuries or illnesses to the detriment of their safety and health program management. If some other organization (such as worker's compensation, social security, welfare or other insurance) pays the costs, corporate management may have a disincentive to control hazards. This is "penny wise and pound foolish."

When insurance pays for the immediate costs of employee injuries, ultimately we all pay - either in the form of higher premiums, inability to obtain insurance completely, or passed-through costs to the consumer. Conversely, when there are fewer accidents, society saves as a whole. Fewer hospitals, medical professionals and rehabilitation facilities will be needed, and employee productive capacity will not be reduced as a result of occupational injury, disease and death.

Why Do Safety Programs Break Down?

As we all know from the best-selling book, sometimes bad things happen to good people. I do not believe for a minute that corporate executives set out to kill and maim workers, and it is very frustrating to see companies portrayed as such villains by the press when they come under federal regulatory agency attack. Rather than malevolence, I believe that the key factor blocking management acceptance of safety and health program development is ignorance. Too often, those in authority fail to realize that:

• Specific and measurable goals (besides injury/illness rates) must be established to make it possible to evaluate and hold managers responsible for their safety and health performance.
• Employee training is worth far more than its costs of time and money. Each well-trained employee can function as a "safety specialist" who helps to identify hazards and prevent costly tragedies.
  
• Industrial products and processes must be subject to comprehensive hazard identification, process safety and risk assessment, and human factors analysis before being implemented or utilized in the workplace.
• Occupational health hazards must be monitored. Companies cannot play ostrich about the long-term, adverse health effects of exposure to toxic or hazardous chemicals. It is necessary to heed statistical trends in a company's data and pay attention to anecdotal information (e.g., concerning, perhaps, a large number of cancer cases among a company's retired workers) in order to avoid future class action suits. The experience of the asbestos industry - and the current focus on diesel particulate and occupational silica exposure - hold valuable lessons. An estimated 100,000 deaths occur each year due to occupational disease. If some of these are your workers, and management ignored obvious indications that a health hazard existed on-site, your company may be the target of the next class action suit.
• "Near Miss" incidents must be investigated as seriously as serious accidents, because they reveal the workplace's true hazard potential - and failure to take them seriously encourages employees to use "shortcuts" to circumvent established safe procedures.
• Processes that are related to a high number of non-fatal lost-time injuries should be reviewed carefully to see if they need reengineering. In general industry, machine hazards produce 19 percent of all compensable injuries with permanent disability, according to the National Safety Council. Falls from elevations are responsible for another 17 percent of disabling injuries (and 12.5 percent of workplace fatalities).
• Every accident resulting in serious injury and/or property damage must undergo "root cause analysis" (Editor's Note: See lead article in Perspectives, the Public Sector Practice Specialty newsletter) in order to gauge the likelihood of reoccurrence. Too often, management adopts a "blame the victim" mentality that avoids serious review of the workplace systems and procedures if an alternative cause (e.g., an employee's intoxication) can be identified. The fact is, an employee who falls to his death may have been drunk but that does not mean a legitimate fall hazard did not exist! Blaming the victim may permit a company to avoid redesigning the work area in the short term, but it will not prevent similar accidents in the future.
• Programs must be in place to ensure that independent contractors perform safely, and that visitors to the worksite are given adequate hazard

information to prevent inadvertent exposure to dangerous equipment, conditions or substances.

• Contract bids must require contractors to provide safety performance information so that their past records can be evaluated as part of the selection criteria.
• Safety and occupational health management is a full time assignment and cannot be handled by the resident engineer, bookkeeper, front-line supervisor, or human resources assistant "when time is available." Safety and health management is a profession, not an ancillary task to be addressed occasionally. This may be the most frequent mistake that companies make . . . and it may only become apparent after the facility is subject to complete OSHA or MSHA inspection or has a tragic accident.

How To Convince Management That "Safety Pays"

In recent years, encouraging "top down" safety and health program management has become a priority for federal and state agencies involved with safety regulation and enforcement. A survey of employers indicates that the Top Ten motivations for taking safety actions were:

(1) cost of workers' compensation insurance (59 percent);
(2) "right thing to do" (51 percent);
(3) "increases profitability" (33 percent);
(4) federal/state safety rules (31 percent);
(5) "too many accidents" (29 percent);
(6) employee morale (26 percent);
(7) productivity (23 percent);
(8) OSHA fines (20 percent);
(9) employee concerns (5 percent); and
(10)recommendations of outside experts (13 percent).

Federal Programs

The original OSHA effort to encourage use of safety and health management programs was the Voluntary Protection Program (VPP) initiative, which was established in 1982, was restructured in 1996 and is still in effect. The VPP emphasizes the importance of worksite safety and health programs in meeting the goals of the OSH Act, and provides official recognition of excellent safety and health programs, assistance to employers in their efforts, and the benefits of a cooperative approach to resolve potential safety and health problems. Recognition in the VPP requires rigorous attention to workplace safety by all personnel. Sites are approved based on their written safety and health program and their overall performance in meeting the standards set by the program. The VPP is comprised of program elements that have been demonstrated to reduce the incidence and severity of workplace injuries and illnesses.

• The "STAR" program is the most highly selective program and is for applicants with occupational safety and health programs that are comprehensive and successful in reducing workplace hazards. Lost workday rates are 53 percent below national averages.
• The "Merit" level is for companies with good programs that are looking to improve and proceed to the STAR level. Lost workday rates are 35 percent below national averages.
• The "Demonstration" level is designed for contractors who meet the requirements as STAR-level companies but are not otherwise eligible for the STAR or Merit designations.

VPP participation is strictly voluntary and OSHA keeps application information confidential. Participating employers must still comply with OSHA standards, but they are exempt from programmed OSHA inspections (although not from those prompted by employee complaints or triggered by fatalities, catastrophes or significant leaks and spills). More information on the VPP is available on OSHA's website (www.osha.gov) or through the Voluntary Protection Programs Participants Association (703-761-1146).

OSHA recently unveiled its "e-CAT" initiative, which pushes implementation of a safety culture at every level of an organization. The multi-faceted program has four components: (1) Management System and Safety/Health Integration; (2) Safety and Health Checkups; (3) Creating Change; and (4) Safety and Health Payoffs.

OSHA's e-CAT program consists of electronic Compliance Assistance Tools ("CATs") that provide guidance information for employers to develop a comprehensive safety and health program. Such programs are required by some states, although there is currently no such federal OSHA requirement.

OSHA's safety and health program management rule is under development, and its future will depend on the regulatory priorities of the new Bush Administration. The draft rule, released in October 1998, would have covered all general industry employers and applied to hazards covered by the General Duty Clause and existing OSHA standards. The proposal set forth the following core elements:

• Management leadership and employee participation (hold managers accountable for carrying out safety and health responsibilities in the workplace and provide them with the authority to do so; and, provide employees with the opportunity to participate in establishing, implementing and evaluating the program);
• Hazard identification and assessment (conduct worksite inspections, review safety and health information, evaluate new equipment, materials and processes before they are introduced to the workplace, and assess the severity of hazards);
• Information and training (provide employees with information and training in the safety and health program with respect to the nature of hazards, what is done to control the hazards, and the provisions of applicable standards); and
• Evaluation of program effectiveness (at least once every two years, after the initial program development).

Existing programs would be grandfathered as long as they satisfied the basic obligation for each core element and the employer could demonstrate the effectiveness of its program. The rule would also require employers at multi-employer worksites to provide information about their hazards, controls, safety and health rules and emergency procedures to all workers.

Finally, OSHA has the "SHARP" program (Safety and Health Achievement Recognition Program), which provides incentives and support to develop, implement and improve effective safety and health programs. Participating employers may be exempted from OSHA programmed inspections for a period of one year. All consultation and visits are conducted at employer request. Typical participants are smaller high-hazard businesses (e.g., with fewer than 250 employees) that do not have serious safety and health problems. Participants undergo a comprehensive site visit and agree to correct all identified safety and health hazards. SHARP is available in all 29 federal enforcement states.

Even where not mandated by law, safety and health management programs are critical to the safety and health performance of an industrial employer. Companies that are truly committed to safety management should consider participation in the VPP or the other consultation and professional development programs offered by OSHA or through professional safety organizations such as the American Society of Safety Engineers

State Programs

At the state level, Oklahoma last year was lauded for its "Safety Pays" program, which offers employers assistance in developing management programs that identify and eliminate workplace hazards and ensure compliance with OSHA regulations. Nine employers were among those receiving the state's "Awards of Excellence" and it was noted that the employers had zero lost-time accidents and had reduced worker's compensation insurance costs from 47 to 97 percent.

Similar savings were noted in Alberta, Canada, where the Worker's Compensation Board announced last year that over $2 million in premium refunds would be distributed to more than 400 employers who registered in the "Partners in Injury Reduction" (PIR) program (the preceding year, 21 companies earned a total of $1.5 million in premium refunds). Other PIR program benefits included lower worker's comp premiums, increased worker productivity and minimized accident costs. The average lost-time claim rate at PIR participant worksites dropped more than 20 percent.

Private Sector Initiatives

At the private sector level, the American Textile Manufacturers Institute (ATMI) instituted the "Quest for the Best in Safety and Health" program in 1993 to help its members identify strategies for continuous improvements in safety and health. Approximately 50 companies participated and had impressive results. At one company, Springs Industries, 45 percent of its plants worked 1 million manhours or more without a single lost-time accident - and some exceeded 10 million manhours. What was the secret of their success? The following elements were responsible for a 25 percent decrease in overall injuries in the program's first year:

• guaranteeing management commitment,
  
• careful screening and hiring - selecting those employees with a commitment to safety through in-house referrals,
  
• publicizing the company's commitment to safety throughout the community,
  
• including discussions of safety issues during employee interviews,
  
• offering employee wellness programs (healthier employees are less likely to be injured on the job),
  
• training employees thoroughly, with new hire orientation and use of Job Safety Analysis (a blueprint for carrying out each step of a job safely),
  
• conducting accident investigations and creating a case management program, and
  
• implementing an effective safety program that involves total commitment from employees and management and is based on a "team" approach.

Conclusion

Workplace injuries and illnesses are costly in financial and human terms. More than $40 billion are paid each year by employers and their insurers in worker's
compensation benefits, or nearly $500 per covered employee. This figure is simply unacceptable.

Ultimately, company executives must recognize that they have a duty to provide a safe and healthful workplace to those who work for the company or visit the worksite. It is unethical to risk someone's life and health in order to save money. A sound safety and health management program can help companies fulfill their moral obligation.

• Nearly 50 workers are injured every minute of the work week
  
• 17 workers die on-the-job each day
  
• Workplace injuries will cost society $128 billion in losses this year . . . this equals one-quarter of each dollar of pre-tax corporate profits
  
• Indirect costs of injuries may be 20 times the direct costs -- Indirect costs include: training and compensating replacement workers; repairing damaged property; accident investigation and implementation of corrective action; scheduling delays and lost productivity; administrative expense; low employee morale and increased absenteeism; poor customer and community relations
  
• To cover the cost of a $500 accident, an employer would have to:

• Fall protection program implementation reduced one employer's accident costs by 96 percent - from $4.25 to $ 0.18 per person-hour
  
• Implementation of an OSHA consultation program reduced losses at a forklift manufacturing operation from $70,000 to $7,000 per year
  
• Participation in OSHA's Voluntary Protection Program has saved one company $930,000 per year and the company had 450 fewer lost-time injuries that its industry average
  
• A SHARP program participant reduced its lost workday incidence rate from 28.5 to 8.3 and reduced insurance claims from $50,000 to $4,000
  
• Implementation of an improved safety and health program reduced Servicemaster's worker's compensation costs by $2.4 million over a two-year period
  
• A manufacturer using a state consultation program reduced its worker's compensation modification rate from 1.7 to .999, and saved $61,000 on its worker's compensation insurance premiums
  
• OSHA VPP sites saved $130 million in direct and indirect injury/illness costs in 1999.

Adele Abrams is a professional member of the Society and member of the Mining and Construction practice specialties. She writes a regular column on mining legislation and regulations for Inside Global Mining, the Mining Practice Specialty newsletter, and is very active with the ASSE Governmental Affairs Committee. Her law offices are in Beltsville, MD. safetylawyer@aol.com

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