SELECT 'O'Connor' (invalid) vs. 
SELECT 'O''Connor' (valid) vs.
SELECT 'O''Connor'+'''' (valid)

declare @sqltmp varchar (3000)
set @sqltmp = 'select contractor'
select @sqltmp = @sqltmp + ', sum (case factory when '''+factory+''' then 1
else 0 end) ['+factory+']' from (select distinct factory from tbl_machines
order by factory) as tt
select @sqltmp = @sqltmp + 'from tbl_machines group by contractor order by
contractor'

select contractor
    , sum(case factory when 'F1' then 1 else 0 end) [F1]
    , sum(case factory when 'F2' then 1 else 0 end) [F2]
    , sum(case factory when 'F3' then 1 else 0 end) [F3]
    , sum(case factory when 'F4' then 1 else 0 end) [F4]
from tbl_machines 
group by contractor 
order by contractor