DynMcDermott

2006 Robert W. Campbell Award Recipient
Category II

Excerpts from Case Study

DynMcDermott (DM) Petroleum Operations Company, located in New Orleans, LA, is the Management and Operating (M&O) Contractor for the Department of Energy (DOE) Strategic Petroleum Reserve (SPR) and is responsible for operating and maintaining the government owned facilities.  Our profits are generated by meeting specific, performance based goals, many of which are directly related to Safety Health & Environmental (SH&E) outcomes.  As a result of our adoption of a Baldrige-based business management model, married with the “best practice” Safety, Health & Environmental (SH&E) management systems of ISO 14001, the EPA Performance Track Program, and the OSHA Voluntary Protection Program, DM has delivered excellent SH&E performance during our contract tenure.  We believe that these four management systems complement and support each other, resulting in top business performance over the past 13 years because of (not in spite of) our focus on the worker, the public, and the environment.

DynMcDermott Petroleum Operations Company received the prestigious Malcolm Baldrige Quality Award for 2005; the nation’s highest honor for business Performance Excellence and is the only federal government prime contractor to have received this recognition. Our facilities have also won analogous awards on multiple occasions from the states of Louisiana and Texas.  We believe that adopting a Baldrige-based management model has improved our performance company-wide.

Formed in 1993, DM successfully re-competed after our initial ten year contract period and in April 2003 received a new contract through 2008 with renewal options through 2013. DM has held the SPR contract longer than any preceding contractor.  As a condition of this contract, DOE requires that DM have no other customers. 

The contract is performance based - meaning that all allowable operational costs are paid by DOE. We generate profit from an annual award fee, based on obtaining DOE mission-driven, specific targets for our service and performance results. Of the 31 DOE Performance Evaluation and Measurement Plan (PEMP) FY2006 performance measures; 11 (35%) are SH&E related. 

Simply put, the better our SH&E performance, the more profit the company generates. This performance based contract is a key driver in the evolution of our high performing, results oriented culture. Since 2000, the SH&E performance has met or exceeded 100% of our performance targets enabling the company to receive 100% of the SH&E performance award fee and avoid any deductive measures; in 2005, this amounted to an impact of almost $1,000,000.  The total award fee score for the year was 98, resulting in a record high award of $3,139,366.  In addition, reductions in waste generation and spill incidents have accounted for another $3,878,000 in cost avoidances and savings since 2000, when the ISO 14001 Environmental Management System and EPA Performance Track programs were put in place.  A similar cost avoidance has been experienced for the reduction of recordable accidents from 34 in 1994 to 4 in 2005, an 88% reduction.

Marrying the Baldrige model with the “best practice” SH&E management systems of ISO 14001 and the Voluntary Protection Program has allowed us to achieve excellent results in safety, environmental, and health performance. DM has been continuously certified by a third-party registrar to the ISO 14001 standard since 2000, when it also became a charter member of the Environmental Protection Agency’s (EPA) National Environmental Performance Track (NEPT) program.  Our two Texas facilities have since become the very first two Certified National Leaders in the Clean Texas, Cleaner World Program.  We have won Environmental Excellence Awards from the National Association of Environmental Professionals for Environmental Management and Best Available Environmental Technology; from the U.S. EPA for Outreach, from the Department of Energy for Environmental management, Downstream Product Stewardship, and Waste Management from the state of Louisiana for Mercury Reductions, from the State of Texas for Emergency Preparedness, and from the Louisiana Quality Foundation for Environmental Management.  DM employees serve as Board Members and Officers in various regional and national professional organizations that advance SH&E stewardship, including a member of the editorial board of the National Safety Council publication, Safety+Health.

The DM storage sites have been Star facilities in both the OSHA and the DOE Voluntary Protection Programs (VPP).  Since their initial acceptance into the programs in 2000, our four sites have won 20 Star among Stars awards from OSHA Region VI for achieving Total Recordable Incident case rates and Days Away/Restricted Time (Lost Workday) case rates between 50% and 90% below the average for our NAIC category, 49319 (formerly SIC 4229).  All four sites were recertified in both VPP programs in 2005-2006.  Different aspects of the SH&E management system have won the DOE Fossil Energy ESS&H Excellence Award five times in the past five years.  Our OSHA trained, Special Government Employees (SGEs) have also been recognized by awards for their assistance with mentorship and appraisals.  Our sites have won multiple awards from the National Safety Council over the years for our safety performance.

DM has not had a Notice of Violation against our environmental programs at any of our six facilities since 1995.  DM has never been cited for an OSHA violation.

DM believes that by using the employee-owned SH&E programs of VPP and Behavioral Safety and ISO certification within the Baldrige management model, we have developed balanced, effective, and value-added SH&E management systems.