Hiring a third-party vendor for Process Safety Management (PSM) can feel overwhelming. There’s a lot at stake, from ensuring compliance to maintaining the safety of your facility. In this blog, we’ll dive into the do’s and don’ts of selecting the right PSM partner to help you avoid common pitfalls and make informed decisions. But first, we have to answer this obvious question.
Should You Even Use a 3rd Party for PSM?
Yes, absolutely! Here’s why:
Unbiased Perspective: A third-party auditor provides a fresh, unbiased set of eyes on your system. Their impartiality ensures that compliance and safety standards are met without internal biases or blind spots.
Enhanced Credibility: Outsourcing audits and inspections makes your compliance process appear more thorough and above reproach. Handling everything internally may raise questions about transparency.
Regulatory Compliance: Federal regulations require adherence to Recognized and Generally Accepted Good Engineering Practices (RAGAGEP). For example, 40 CFR 68.73(d)(2) states: “Inspection and testing procedures shall follow recognized and generally accepted good engineering practices.” If your RAGAGEP is IIAR (as it should be for ammonia refrigeration systems), ANSI/IIAR 6-2019 §5.4.2 specifies: “Equipment inspections shall be performed by a qualified inspector(s). Every fifth (5th) year, at a minimum, the annual inspections shall be conducted by a qualified inspector who shall not be influenced by the facility’s record keeping, operations, maintenance, or management. This person shall not present a conflict of interest and shall report instances of deficiencies.” Essentially, this means that if one person is influencing the mechanical integrity program, such as conducting annual MI inspections, that same person should not also influence other aspects of the program, like the 5-Year Mechanical Integrity Audit.
Fresh Insights: When operators or PSM coordinators manage every aspect of PSM daily, they may become less aware of changes or issues within the system. A third-party perspective can uncover potential deficiencies that internal staff might inadvertently overlook. Getting a fresh set of eyes on your system is key to identifying issues and ensuring compliance.
Now let’s get into the do’s and don’ts of hiring the right third-party PSM vendor.
Don’t Choose Someone Without Code Knowledge
An auditor might be extremely knowledgeable and experienced in ammonia refrigeration and appear to know what they’re talking about, but they might not understand the relevant CFR regulations and IIAR code requirements. When such an auditor makes recommendations, they might not be bad recommendations, but they likely won’t have any code to back up their claims. Recommendations like this are what we call “opinion recommendations.” Opinions can be valuable, but when an auditor gives you a long list of items to update your ammonia system, you’re left wondering: “Is this actually required by CFR or IIAR, or is this just their opinion?”
Do Ask About RAGAGEP and Qualifications
Ask what RAGAGEP the vendor uses. For ammonia refrigeration systems, they should say IIAR. If they don’t recognize RAGAGEP or IIAR, that’s a major red flag. Make sure the vendor is fluent in CFR regulations and ANSI/IIAR standards. Look for certifications like RETA CARO or CIRO and University of Wisconsin Madison IRC credentials. You need a vendor who’s not just an ammonia wiz but also a compliance expert.
Don’t Overlook Report Quality
Many companies deliver disorganized, incomprehensive reports that create more headaches than solutions. I’ve seen reports from PSM companies that are as unorganized and confusing as you can imagine. Sometimes, they’re spread across dozens of separate documents for each equipment checklist, with hundreds or even thousands of pages. They may lack code references, tables of contents, summaries, or clear recommendations. After you dig through countless pages of checklists to put together a consolidated list of recommendations, you’re left with a massive to-do list of repetitive, vague, and confusing action items. Don’t do this to yourself!
Do Review Example Reports
Always, especially for something like a 5-Year Mechanical Integrity Audit or an annual MI inspection, ask for an example of what their reports look like and even ask them to walk you through it. If the consultant demonstrating it can’t even tell you where to begin, that’s a clear problem. If they aren’t willing to show you an example, that’s also a problem. If you ask this question to a PSM company and they don’t answer with, “Of course! I’m so glad you asked! Let me show it to you,” then you need to think seriously before signing yourself up for a months-long migraine.
Don’t Focus Solely on Price
Don’t go for the cheapest option solely because it’s the cheapest option. Nor should you go with the most expensive option because you assume it’s the highest quality. Yes, you get what you pay for, but there are exceptions. Sometimes smaller companies charge less simply because they’re trying to enter the market. On the flip side, some PSM companies take advantage of big companies with deep pockets, charging exorbitant fees simply because they know those companies will write the check. An international, multibillion-dollar company might pay $70,000 for an audit when a smaller company pays $35,000 for the exact same thing. If you’re a big national company, don’t let vendors take advantage of you.
Do Balance Cost and Value
Budgeting matters, even for the big players. Take the time to assess whether a vendor’s pricing aligns with their qualifications and deliverables. A fair-priced, qualified vendor will save you time, money, and headaches in the long run. Always ask for example reports, confirm regulatory knowledge, and verify qualifications. Don’t assume higher cost equals better quality, but don’t compromise on quality just to save a few bucks either. If your company operates multiple facilities with several PSM coordinators, they will notice the vendor you choose. They’ll appreciate the effort you put into selecting the best partner for your facility’s needs.
Final Thoughts
Selecting the right third-party vendor for PSM isn’t just about compliance; it’s about ensuring your facility’s safety and efficiency while avoiding unnecessary headaches. By asking the right questions, reviewing qualifications, and evaluating report quality, you can confidently choose a vendor who meets your needs without breaking the bank. Your team will thank you for the effort, and your facility will benefit from enhanced safety and compliance.