PART 1: The Pitfalls of Hiring an EOT Crane Inspection Company

Unwittingly Getting Your Neck in a Noose

I can see the puzzled look on your face as you read this headline. Isn’t the main benefit of “out-sourcing” to relieve yourself of the headaches of a complex problem like OSHA mandated crane inspections? You’re not a crane expert, and you don’t want to become one; so you just “out-source” the problem to a firm that does this for a living!

Engaging an Overhead Crane Inspector may seem like an easy proposition. Just put together a list of vendors, point them to the cranes to be inspected. Then issue a PO to the low bidder (because you really have no other criteria), and now the crane inspection problem is their problem. The fact of the matter is, that’s probably the way that most crane owners do it. Unfortunately, it’s not that easy, and it’s a great way to get your neck in both a regulatory and legal noose!

Here’s why.

The Workman’s Comp Conundrum

It’s essential to understand the hidden trap of the Workman’s Comp law. In most states, when there’s a severe accident or death, the victim (or their survivors) are legally prevented from suing the employer. However, in the instance of an accident with a third-party crane inspector, while the survivors can’t sue the inspection company employer, they are free to sue the company that owns the cranes they were hired to inspect.

In other words, in the event of an accident injuring the crane inspector, the inspector’s employer is off “scot-free” while the company that hired the inspector… you… are directly in the cross-hairs of the plaintiff’s lawyer. Further, in the event of litigation, the plaintiff’s lawyer, OSHA and, the Inspection Contracting company will all likely cooperate against you, the sole target of the litigation.

I assume the law was written this way to reduce the costs of settling accidents, but it just kicked the can down the road. If the injured party can’t sue the employer, there are several up-stream potential targets for the plaintiff’s lawyer, including the crane owner, crane manufacturer, etc.

A Defective Business Model

This business model sets the stage for a significant conflict of interest between the customer of inspection services and the inspection companies. For the inspection company to be “low bidder,” their incentive is to hire cheaper, less experienced, and therefore less knowledgeable inspectors. Further, it becomes a financial imperative to spend less time and money in subsequent training to maintain a competitive position in the market place. This is what I call “a race to the bottom,” which is what has been happening to the crane inspection business for the past decade.

You may have out-sourced the time and expense of becoming a crane inspection expert, but you’ve retained 100% of the risk and the costs associated with that risk.

Chickens Coming Home to Roost

At this point, your reaction may be anger at those unscrupulous crane inspection companies. To this, I would respectfully suggest you take a look in the mirror to find the real culprit in this story.

I strongly maintain that whenever a buyer purchases;

  1. a complex product (based on hundreds of pages of regulations),

  2. makes a purchase with no written specifications,

  3. chooses not to take the time to become an informed buyer and

  4. chooses the successful bidder on the sole criteria of being the low bidder; this outcome is inevitable.

In other words, the buyers buy an ever-worsening product while the seller’s, in an attempt to survive, participate in a race to the bottom in both competency and profitability.

The Solution

Buyers must either take the time to become experts or find subject matter experts that have no vested interest, to produce airtight specifications for bidders to conform to. Buyers must then steadfastly hold the seller’s feet to the fire and not succumb to the illusion of the low-priced bid.

Many years ago, my father said to me, “…there’s no such thing as a free lunch.” As a 12-year-old, it seemed like a really stupid statement, and as a 66-year-old, it strikes me as a universal truth that we should never forget.

Next, PART 2

“What exactly do you need to know?”

Larry Dunville