We continually hear about outsourcing in industry. When it comes to fire brigades, what is outsourcing?

Outsourcing involves an industrial site, perhaps an oil refinery or a chemical plant, replacing or augmenting their on-site, internal fire brigade with an outside contractor. This is quite similar to the facility replacing its maintenance, accounting or engineering departments with a contractor’s employees. However, in the case of a fire brigade, the contractor may be replacing volunteers.

How widespread is the trend to outsource fire brigades in the United States?

My understanding is that the outsourcing of aircraft rescue and firefighting (ARFF) services at both public and private airports has been underway for sometime. The privatization of industrial fire brigades seems to be most active, at the present time, in the oil refining, chemical and petrochemical industries.

Why do you think that the trend to outsource fire brigades is most prevalent in the refining and chemical industries?

In general, I think it’s because you see the most sophisticated emergency response organizations in those industries. In the U.S. in particular, it’s not uncommon to see a major investment in emergency response preparedness at oil refineries and chemical plants. That investment typically takes the form of 3,000 gpm foam pumpers and foam towers, 8,000 -14,000 gpm foam nozzles (big guns), 6,000 gpm portable pump trailers with 6, 8, and 12 inch fire hose, and literally thousands of gallons of firefighting foam concentrate. The investment also extends to the training and the support needed to maintain fire brigade or Emergency Response Team (ERT) organizations with anywhere from 100 to over 300 members. In my experience, I don’t know of another industry where you can uniformly see emergency response organizations on a similar scale.

You mention Emergency Response Teams (ERTs), in addition to "fire brigades", is there a difference?

I guess that to some folks it might just be semantics, where both terms are interchangeable. To me, a fire brigade is limited to firefighting activities, and an Emergency Response Team is a multi-functional team performing fire fighting, hazardous materials response, emergency medical services and high angle and confined space technical rescue services.

What are the business drivers behind the outsourcing of fire brigades and ERTs?

I’d like to use the oil and chemical industries for my example, because I’m most familiar with those industries. I think there are four major drivers, all of which are interrelated. First, there’s the creation of huge companies through the "mega-merger". ExxonMobil, BP Amoco Arco, and Dow’s purchase of Union Carbide, are examples of those mergers. It should be of no surprise to anyone at this point, that a significant result of these mergers is the reduction of employees. Second, the oil and chemical industries are pushing hard to increase shareholder value; safety and emergency response departments are expected to participate. Third, many of the employees being made redundant, or otherwise accepting enhanced retirement packages, are the most experienced safety department and fire brigade members, leaving (in my opinion) significant experience gaps. Fourth, there is an industry-wide trend to "get back to core competencies" and outsource all non-core business activities (including emergency response).

What is the most significant problem facing a plant manager in the wake of the mega-mergers?

I believe the most significant problem is that there are simply not enough people left to fight fires and respond to other emergencies after all of the downsizing is complete. And even with all of the recent advances in emergency response technology, at the end of the day, we still rely on human beings to mitigate emergencies in our plants.

The fact is, that if a plant optimizes its manning based upon the plant running smoothly, then by design, there’s nobody left to respond to abnormal occurrences (like fires, rescues, chemical releases, etc.) when they occur. I like to explain that having chemical plant board operators leave the control room and fight a fire, is analogous to having the pilots of a burning airplane leave the cockpit to fight the fire. Who’s flying the plane while the pilot’s are fighting the fire? Can you really afford to neglect either duty?

With the economic picture you’ve just painted, what advantages do a full-time contract emergency response organization provide?

The benefits are numerous. Primarily the contract service with its full-time personnel, allow plant operators to do what they do best (run the plant). The contract force is also much easier to administer (fewer people with a consistent schedule vs. very large fire brigades whose schedules are prioritized around their primary job functions). Turnover, and the need for recurrent training, is minimized with the contract workforce. Additionally, the physical fitness of the contract workforce is the responsibility of the contractor and eliminates numerous physical fitness and medical concerns, which often are present with an aging plant workforce. In general, the individual emergency response skill levels of the contract employees can be more advanced as they have the time to train. This training availability is essential if the facility is acquiring some of the more sophisticated fire apparatus available today. While these fire trucks are very labor efficient (flowing massive amounts of water and foam with very little manpower), the equipment operators must be trained to a high degree of proficiency.

What other activities can the full-time contract emergency response organization perform to help offset the costs of the new organization?

There are numerous activities that the contract organization can perform in support of the facility’s health, safety and environmental protection initiatives. These activities include environmental monitoring (including ambient air monitoring), oil spill response, marine fire fighting, response to pipe line emergencies, and response to off-site transportation emergencies. Additionally, the contractor can perform industrial hygiene monitoring, provide comprehensive inspection, testing and maintenance services for myriad fire and safety equipment, and provide support during facility turn-arounds.

What is a mutual-aid organization, and what do you see as the need for and the future of mutual-aid organizations in the U.S.?

A mutual-aid organization consists of several industrial facilities, usually in close proximity, agreeing to send help to each other’s facilities in time of emergency. That help may be in the form of manpower and equipment, equipment and foam stocks only, and/or emergency response specialists. I believe that due to the downsizing of personnel inside facilities, that outside of facility resources (such as those represented by mutual-aid organizations) are becoming even more critical than they have been in the past. There is one problem that is beginning to manifest itself, however. Most mutual-aid organizations function by having their member participants immediately send excess on-shift manpower to the mutual-aid member in emergency. With the significant reductions in manpower at industrial facilities, there are less and less "excess" people to send to these mutual-aid requests. Further, the experience base of most mutual-aid organizations is being depleted through early retirement and other personnel reduction efforts.

I have heard you state in other presentations, that it is possible to replace a volunteer fire brigade with full-time personnel and actually save the plant money. How can that be?

Let’s say that a facility has an ERT with 135 members responding on a part-time basis, and the alternative is to replace that part-time group of 135 with 19 full-time personnel. Let’s say that the resulting organization has 6 responders on shift, operating a three shift, 24 hours on / 48 hours off schedule, with a chief officer working a normal day schedule as the program administrator.

First the facility needs to total all of the costs associated with running a part-time ERT (such as overtime pay for training, drills, actual response costs, travel to fire schools, the cost of training, annual medical examinations, the cost of backfilling certain operations and maintenance jobs while the ERT member is away, ERT incentives, the high cost of ERT turnover, the cost of protective clothing, etc.). Next, the facility needs to total the amount of money currently being spent at the facility to perform a number of duties that could be assumed by the new full-time organization. Next the facility needs to take credit for any personnel cost savings which result from the operations, maintenance, laboratory and other plant departments, which no longer have to overstaff in order to provide adequate candidates for the part-time ERT. My personal experience has been that in most cases this accounting process will show overall savings to the facility, and thus make the full-time organization feasible.

What advice do you have for a plant fire chief who wants to transition to a full-time emergency response organization, but can’t demonstrate a cost savings, especially if the chief is faced with a plant which is dramatically reducing headcount?

Don’t play the numbers game if you can’t win. Try a different strategy. I don’t know of a single case where a company has mandated -- let’s say a 30% reduction of personnel at a plant, and the company has also said that it’s O.K. to lower safety, health and environmental performance by 30%, or burn the plant down in the process. In fact, we all know that senior corporate management expects us to reduce headcount by 30% and have absolutely NO reduction of safety performance. Well it seems to me that if the plant is reducing headcount by 30% and the plant has a volunteer ERT that the ERT is going to shrink by 30%. To be more specific, if the plant shift staffing is being reduced by 30% the shift ERT will be reduced by 30%.

I believe that the best chance the plant fire chief may have is to use an example from the old days when process automation (computerization of control rooms) was being implemented. I can remember when facilities would justify spending $ 20 million for control room automation so that they could reduce shift operations manning by 10 people per shift. Everyone understood that in order to get the $10 million per year savings you had to buy the computers. Pretty simple. I think the same type of logic needs to be used by the fire chief. If the plant wants to save $ 25 million per year by reducing the plant manning by 30%, spend an additional $2 million to provide a full-time contract emergency response so that the facility will have no degradation in its safety and emergency response performance.

Which facilities in the U.S. have recently implemented full-time contract emergency response organizations? When did it all begin?

To the best of my knowledge the first full-time contract emergency response organization was implemented by Richard Wood and I in 1995. Richard was (and still is) the fire chief at OxyChem’s (now Equistar’s) Corpus Christi olefins plant. I was the Vice President & Fire Chief at the Refinery Terminal Fire Company (RTFC). RTFC became the in-plant contractor providing 21 full-time people to OxyChem (by the way, we also showed a savings!). Since then contract ERTs have been established at Koch Refining Company’s east and west refineries in Corpus Christi, Texas; Citgo’s refineries in Corpus Christi, Texas, Lake Charles, Louisiana, and Lemont, Illinois; Motiva Enterprises’ refinery in Convent, Louisiana, and Ciba Specialty Chemicals in MacIntosh, Alabama. There may be other facilities utilizing full-time contractors, which I’m not aware of. But I am certain that there are several other plants about to transition to a full-time contract emergency response organization. Thus the trend continues.

Once a facility has decided to implement a full-time emergency response organization, why should they consider a contractor rather than just hire their own full-time employees?

I think for the same reason the industry overall has adopted the "get back to core competencies" philosophy. Companies have to invest in their people, and I think those companies feel that developing the skill sets of their plant operators, engineers and others who "make or invent products" is the best use of their personnel development money. Similarly, I think that contractors who specialize in emergency response can invest their money into their employees who are providing their core product (emergency response) and pay to retain those employees on a long-term basis and in-turn amass a significant emergency response experience base.

Please understand that I acknowledge that there are truly some exceptional emergency response professionals working on facility staffs. However, in many cases these professionals are retiring and not being replaced. In these cases a contractor with an excellent experience base and field performance record, may be appealing to those facilities who are also looking to outsource non-core activities.

When evaluating a contractor, what qualities should a facility look for?

I would ask the prospective contractor to demonstrate their qualifications in nine (9) areas. Specifically ask the prospective contractor to: 1) Demonstrate experience directly related with immediate first response to plant emergencies (fire, haz-mat, medical, environmental, rescue); 2) Demonstrate that the company principals have professional qualifications and related emergency response experience; 3) Demonstrate that the company has the capability/experience in recruiting, training and maintaining qualified staff; 4) Advise where the company has currently established on-site contracts to provide full-time emergency response staffing; 5) Demonstrate its ability to support plant needs (response to incidents, IH monitoring, training commitment/plan, plant support as defined in bid, maintenance and inspection of plant emergency response equipment); 6) Define the resources available for an extended incident; 7) Demonstrate their commitment to project success; 9) Indicate the company’s financial position.

Can you see industry outsourcing their emergency response ENTIRELY in the U.S.?

No. I think there will be many facilities that for one reason or another will elect to maintain their emergency response program internally.

Do you think the world’s industrial sectors can benefit from this concept of outsourced fire departments? Do you think it will happen soon?

Let me answer that question in several segments. With regard to the utilization of full-time industrial firefighters in industrial facilities, the United States is certainly the "Johnny come lately". There have been full-time professional fire departments in Europe and Scandinavia as well as other areas of the world for years. Some of largest industrial fire departments I am aware of, are at BASF and Bayer in Germany, the Enron facility (formerly ICI) at Teesside in the UK, and the Neste Refinery at Tampere in Finland, just to name a few. I think our counterparts around the world have been pretty amazed that the U.S. refining and chemical industry has been so successful for so long without full-time firefighters.

I believe that anywhere in the world where industrial facilities are faced with significant personnel reductions, that there may be an application for a contract fire department, especially if there is an opportunity do so on a cost-shared basis. I also believe that there is a significant opportunity to contract emergency services in countries where the oil refining, chemical and petrochemical industry is just emerging, such as in some parts of Asia and the pacific rim. In these cases, the contractor can bring technical expertise and experience, which have not yet been acquired by local personnel. Regardless, the issue of focusing on "core competencies" is as applicable in the emerging markets as it is in the countries where the industry is "mature".