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Compliance Glossary Term

Prequalification

A vetting process where operators assess a subcontractor's safety record, insurance, and certifications before awarding work. Companies must pass prequalification to be added to an approved vendor list. Failing or lapsing can disqualify a subcontractor from bidding on projects entirely.

Related Terms

Tier 2 Diesel Engine

Compliance

A diesel engine meeting EPA (Environmental Protection Agency) Tier 2 emissions standards, regulating nitrogen oxide and particulate output. Many job sites and municipalities restrict or ban Tier 2 equipment in favour of cleaner Tier 4 units. Subcontractors should verify equipment tier requirements before mobilising to avoid costly compliance issues or equipment swaps.

PSM (Process Safety Management)

Compliance

A regulatory framework governing hazardous process facilities like refineries and gas plants. Subcontractors working on-site must comply with the operator's PSM programme, including hazard reviews and safe work permits. Non-compliance can result in immediate removal from site.

Coastal Development Permit

Compliance

A regulatory authorisation required before construction or field work begins in coastal or tidal zones. Subcontractors must confirm permit approval before mobilising crews or equipment to shoreline sites. Work started without this permit can trigger stop-work orders and significant project delays.

Indemnification

Compliance

A contractual obligation where one party agrees to cover another's losses, claims, or legal costs. For subcontractors, indemnification clauses often require you to absorb liability even for an operator's own negligence. Always have legal counsel review these clauses before signing.

Utility Locating

Compliance

The process of identifying and marking underground utilities before excavation begins. Subcontractors are often required to confirm locates are valid before breaking ground. Failure to comply can result in strikes, liability, and work stoppages.

Api Rp 571

Compliance

API RP 571 (Recommended Practice 571) identifies damage mechanisms affecting fixed equipment in refining and petrochemical facilities. Subcontractors performing inspection, maintenance, or repair work must understand these mechanisms to meet client integrity requirements. Familiarity with this standard is often required for turnaround and vessel entry scopes.

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