This is the January 2021 edition of our monthly series of Ethics case studies titled What Do You Think? This series is comprised of case studies from NSPE archives, involving both real and hypothetical matters submitted by engineers, public officials and members of the public.
Your peers and the NSPE Board of Ethical Review have reviewed the facts of the case as shown below. And, here are the results.
Your opinion has been registered for the January 2021 edition of our monthly series of Ethics case studies titled What Do You Think?
Your vote is recorded as:
Want to know how your peers voted? We’ll send you an email with the poll results on January 26.
Your opinion has been registered for the January 2021 edition of our monthly series of Ethics case studies titled What Do You Think?
Your vote is recorded as:
Want to know how your peers voted? We’ll send you an email with the poll results on January 26.
A Review of the Facts
A community service corporation was established for the purpose of revitalizing a city’s downtown area. A consultant recommended building an “off-price mall” in the downtown area, but the project stalled and was never executed.
Several years later, Engineer Roland, a principal in a small structural, environmental and civil engineering firm, was elected president of the community service corporation. He received no compensation for any of his services. The corporation, under Roland’s leadership, was able to persuade state and federal agencies to build office buildings and a federal courthouse in the downtown area.
As selections were in the process of being made for the design work of the federal courthouse, larger design firms started contacting smaller local consulting firms, including the firm headed by Roland’s son, Engineer Mark, who was the president and chief executive officer. Roland was the chairman and principal stockholder of the firm. A major design firm submitting a proposal to the federal government to lead the design effort asked Mark to perform civil, structural, and environmental engineering services in connection with the project. Mark agreed to perform the services.
Was it ethical for the firm of Roland and Mark to agree to perform services in connection with the federal project?
Here is the result of our survey of your peers:
Applicable NSPE Code References:
Code II.4.d: Engineers in public service as members, advisors, or employees of a governmental or quasi-governmental body or department shall not participate in decisions with respect to services solicited or provided by them or their organizations in private or public engineering practice.
Code II.4.e: Engineers shall not solicit or accept a contract from a governmental body on which a principal or officer of their organization serves as a member.
Code III.5: Engineers shall not be influenced in their professional duties by conflicting interests.
Discussion
Fundamental to engineering ethics is the principle that engineers should not use public positions that they hold in a manner that will benefit themselves in their private dealings (Code II.4.d.). In particular, a basic ethical principle for engineers to be mindful of is that engineers should not seek or accept work from public agencies where a principal or an officer serves as a member (Code II.4.e.).
The Board of Ethical Review has, on numerous occasions, had an opportunity to address these two key ethical principles and the policy considerations relating to these principles. For example, in BER Case 62-7, the Board reviewed a case concerning an engineering consultant who had been retained by a county commission to perform all necessary engineering and advisory services. The commission did not have an engineering staff, so the engineer acted as the staff for the commission in the preparation of sewage and water studies, the financing of sanitary districts, and the approval of plans submitted by others. The engineer was also retained by a private company to perform engineering design for the development of several thousand housing units, which involved extensive contract negotiations between the commission and the developer.
The Board found that the engineer was in a position of passing engineering judgment on behalf of the commission on work or contract arrangements which the engineer performed or in which he participated. This obviously involved the self-interest of the engineer and divided his loyalties. Even if the engineer acted with the best of intentions, he was put into a position of assessing his recommendations to two clients with possibly opposing interests. Given these realities, the Board concluded that a conflict of interest existed.
In BER Case 75-7, the Board examined the question of whether an engineer who serves as a member of local governmental boards and commissions that involve some aspects of engineering may provide engineering services through his firm to the Board and commissions. There the Board concluded that an engineer serving on a commission could ethically provide services to the private client because the engineer had abstained from the discussion and vote on certain permit applications. The Board cautioned, however, that care must be taken that the engineer in such a situation not have taken any action to influence a favorable decision on the permit.
In BER Case 82-4, the Board, in reviewing the aforementioned decisions, ruled that an engineer who served as a city engineer and a county engineer for a retainer fee may not ethically provide or render judgment on behalf of the city and county relative to projects on which the engineer had furnished services through a private client. “To do so,” noted the Board, “is a useless act because it is basic to the Code of Ethics that an engineer will not submit plans or other work which he does not believe represents the best interests of the client.” The Board could not see how an engineer could wear two hats and still represent the best interest of his client; to do so would constitute a conflict of interest. “If the county or city wishes to obtain a recommendation on the merits of the work,” the Board stated, “it should retain another engineer for review.”
Turning to the case at hand, we believe the facts involved can be readily distinguished from the line of cases discussed above. In fact, we are of the view that based upon the plain meaning of the language, neither Code II.4.d. nor Code II.4.e. would be particularly pertinent to this case. As applied to the fact in this case, these two Code provisions are essentially intended (1) to prevent an engineer who serves as a member, advisor, or employee of a governmental or similar entity from serving, for example, on the design selection, oversight, review committee of that entity (e.g., federal government) where the engineer’s firm is competing for the work and (2) to prevent an engineering firm whose officer or principal serves as a member of a governmental body from soliciting or accepting a professional contract with that governmental body.
Based on the facts, there is no indication that either Roland or Mark were serving as members, advisors, or employees of the governmental body procuring the design services. Under the facts, the design services were being procured, overseen, and reviewed by an agency of the federal government and not by the community services corporation on which Roland served. Also, importantly Roland and Mark had no direct relationship with the federal agency procuring the A/E services.
The Ethical Review Board’s Conclusion
It would be ethical for the firm of Roland and Mark to agree to perform services in connection with the federal project.
BOARD OF ETHICAL REVIEW
William A. Cox, Jr., P.E. William W. Middleton, P.E. William E. Norris, P.E. William F. Rauch, Jr., P.E. Jimmy H. Smith, P.E. Otto A. Tennant, P.E. Robert L. Nichols, P.E., Chairman
Note – In regard to the question of application of the Code to corporations vis-a-vis real persons, business form or type should not negate nor influence conformance of individuals to the Code. The Code deals with professional services, which services must be performed by real persons. Real persons in turn establish and implement policies within business structures. The Code is clearly written to apply to the Engineer and it is incumbent on a member of NSPE to endeavor to live up to its provisions. This applies to all pertinent sections of the Code. This opinion is based on data submitted to the Board of Ethical Review and does not necessarily represent all of the pertinent facts when applied to a specific case. This opinion is for educational purposes only and should not be construed as expressing any opinion on the ethics of specific individuals. This opinion may be reprinted without further permission, provided that this statement is included before or after the text of the case.
You need a third answer option.
c) Not enough information to make the call. It wasn’t clear whether or not Roland was part of the selection process or had any influence. If he was on the selection committee and recused himself from the decision, I would conclude that the participation was not necessarily unethical. If he did take part in the decision process, in my view it was unethical. Also, it is not clear whether or not the local downtown municipality assigned oversight to the community service corporation or required the projects receive an approval from the service corporations consultant prior awarding the contract.
We all understand the potential ethical impropriety that may arise when there are conflicts of interest.
We need to be careful that engineers serving in civic and related roles are not effectively punished for their service by being prohibited from offering / selling their professional services.
In a case like this, we need to consider what may be best overall for all. Should the engineer abstain from offering all engineering expertise, depriving a group of his skill an experience so that he may ethically pursue the business that may arise? Or should the engineer offer his engineering expertise and deprive himself from pursuing potential business?
Volunteering as a civic-minded subject matter expert at potential penalty to one’s business hardly seems fair.
This is almost akin to consulting with a surgeon and then questioning his/her ethics upon hearing surgery is needed because acting upon the surgeon’s advice will also benefit the surgeon financially.
Personally, I’d opt for full, a-priori disclosure to all parties, with reminders along the way. Should legitimate objections be raised, then I would consider recusing myself.
I understand the perspective that this was an ethical action and that the information presented is limited for the scope of the exercise.
I can also see how this case could be viewed as unethical, especially if the project does not go well or if there are excessive costs associated with the project. With Ronald’s position, he could appear to be directing work or influencing decisions to be in the best interest of his son’s company (where he personally benefits from the income to the company). Further, Ronald could be accused of obtaining the leadership position with the intent to direct work to his son’s firm. Public perception may render a guilty verdict without knowing the facts of the case, resulting in damage to the reputation of Professional Engineers.
As many Professional Engineers develop leadership skills that may benefit society; much like Ronald’s work with the community – I think that we should also understand that there could be a sacrifice that we make when accepting these types of positions. We understand that we are giving up potential contracts when we accept a leadership position or position of influence to help improve the community.
It is not clear whether the Civic Corporation has any input into the selection process or will they have any input in the review of work product during the design process. In light of the ambiguity, I voted Unethical.
I have a lot of experience (20+ years) with government contracting. The contracting paradigm is very simple – the government already knows who they want to hire, if you are NOT that person, then you can only hope that the ‘chosen one’ falls on their sword. In this case, Roland would be the chosen one since he had networked with the City. Further, he was the key person in getting the government to come in, ergo, he used his position as Chair of the NGO to network in to the government bureaucracy and become the chosen one.