This is the March 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.
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Your opinion has been registered for the March 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 March 23.
A Review of the Facts
Engineer Danny contracts to serve as a consultant to a federal environmental agency for the development of an overall hazardous waste remedial strategy. Under the contract with the federal agency, Danny agrees to provide basic consulting services with an understanding that the federal agency may request additional services at a later date. Nothing is contained in the contract between Danny and the agency concerning other work for other clients.
Two years following completion of basic services to the federal agency, Danny is retained to provide environmental consulting services by a major industrial corporation, which has been deemed by the federal agency to be responsible in a dispute over the clean-up of a hazardous waste site. Following the execution of its contract with the corporation, Danny is contacted by the federal environmental agency and is asked to provide consulting services for the agency. These services would be performed per Danny’s original understanding with the agency in connection with a specific hazardous waste site of the major industrial corporation, which is also now a client of Danny. Danny informs the federal agency that the performance of such services would constitute a conflict of interest and declines to perform the services requested.
Was it unethical for Danny to agree to perform services to the industrial corporation under the facts without the prior consent of the federal agency?
Applicable NSPE Code References:
Code II.4: Engineers shall act for each employer or client as faithful agents or trustees.Code II.4.a: Engineers shall disclose all known or potential conflicts of interest that could influence or appear to influence their judgment or the quality of their services.
Code III.4.b: Engineers shall not, without the consent of all interested parties, participate in or represent an adversary interest in connection with a specific project or proceeding in which the engineer has gained particular specialized knowledge on behalf of a former client or employer.
Discussion
Issues involving conflicts of interest have long been some of the thorniest issues faced by engineers. The Board of Ethical Review has had numerous occasions to address issues of conflict of interest, particularly those involving public and private relationships.
One pertinent case is BER Case 87-3, where the Board considered facts involving a county that employed individuals to perform building inspections in the county. Dissatisfied with the services provided by in-house inspectors, and as part of an effort to “contract-out” certain county functions, the county decided to retain a private consulting engineering firm to perform building inspections.
The county selected and retained an engineer to perform the work. One of the engineer’s responsibilities was to inspect a building project developed by a client of the engineer. The client was a company for which she had regularly performed services in the past. Although the engineer did not provide any services in connection with the building project in question, the engineer and the client anticipated that they would continue to work together in the future.
In contract negotiations with the county, the engineer disclosed the relationship with the client, and it became a matter of official record. In finding that it would not be unethical for the engineer to perform building inspection services for the county in connection with the project developed by the client, the Board, considering earlier BER cases, noted that unlike other cases, the facts did not deal with a situation where an engineer was being retained as a paid advocate for a particular position or point of view on a pending matter in direct conflict with the engineering opinions of her county client. Nor was the Board faced with a situation where the timing of the retainer raises questions of impropriety.
Rather, in BER Case 87-3, the engineer was being asked to perform basic inspection services in connection with a building with which she has never previously been involved but which was developed by a former and possibly future client. While the Board noted that the engineer had a professional obligation under Code II.4 and Code II.4.a. to disclose her relationship with the client to the county, the Board did not believe it would be necessary for her to decline to perform the inspection services. To prohibit the engineer from providing building inspection services would be an unrealistic intrusion into her practice and would inhibit the county from utilizing a flexible method of delivering services consistent with public health and safety.
Another case involving the question of conflict of interest was the earlier BER Case of 76-3. There, an engineer, under a retainer agreement with a county to provide sewer design and expertise and general advisory services, entered into a second retainer agreement with a developer with county approval. Thereafter, the developer filed a petition with the zoning board to rezone a substantial portion of the county for commercial purposes. The county department filed several engineering reports adverse to the zoning petition, recommending denial of the rezoning because the proposed construction would overload available water and sewage facilities. The development company then called the engineer as an expert witness at the zoning hearing. The engineer testified in support of the zoning petition. The Board concluded that it was unethical for the engineer to appear for the development company while serving as an engineering consultant to the county.
There are several aspects of the facts contained in the instant case which differ from earlier BER cases. BER Case 87-3 did not involve a set of circumstances where the engineer and his client had a current relationship, circumstances which could raise a question of conflict of interest between the engineer and the public client. In addition, unlike the facts of BER Case 87-3, here, the engineer was involved in the development of the overall strategy for the federal agency. In this regard, the engineer was apparently not involved in any aspects of the work for the federal agency, which was specific to any particular project or site, but rather was involved as a consultant in the program planning for the agency. Also, in BER Case 87-3, the engineer disclosed his relationship with the client during contract negotiations with the public authority. Here, apparently, because of the timing of the relationships between the engineer and his clients, the engineer did not disclose his proposed relationship with the industrial corporation to the federal environmental agency.
The facts in BER Case 76-3 are quite different from those in the immediate case as well. There, the engineer was attempting to serve the interests of two separate masters at the same time. Unlike the facts of this case, an objective evaluation of the circumstances should have led the engineer to conclude that there was the potential for a collision to occur between the interests of his two clients.
The Ethical Review Board’s Conclusion
Split Decision
Majority Opinion (4 out of 7 board members)
It was unethical for Engineer A to agree to perform services for the industrial corporation under the facts without the prior consent of the federal agency.
Here, we are dealing with a somewhat vague and indefinite understanding between a consulting engineer and a federal agency for ongoing planning support to effectuate an important federal program. In areas such as hazardous waste remedial work, innovative approaches are being implemented to address these important societal concerns. Without getting into the technicalities of the law of government contracts and procurement and other arcane issues which are not the subject of this Board’s inquiry, weighing all of the facts and circumstances involved in this case, we believe it would be proper for Danny to perform services for the industrial corporation in the manner indicated provided Danny obtains prior consent of the federal agency.
Minority Opinion (3 out of 7 board members)
It was not unethical for Engineer A to contract with the industrial corporation without obtaining prior consent of the federal agency.
We share many of the reasonings of the Board. However, in our opinion, the majority of this Board has given unjustified weight to “an understanding that additional services may be requested at a later date at the government’s request.” In this instance, two years had passed without any exercise of such understanding by the government. Such a substantial period of silence would seem to free Danny of any reasonable expectation of further demand for services. We also question whether federal procurement regulations would permit or validate such a loose continuing arrangement. Further, we question whether having provided services in development of a “strategy” should preclude Danny from ever providing engineering services for clients over which the agency has oversight responsibility.
BOARD OF ETHICAL REVIEW
John F. X. Browne, P.E. Herbert G. Koogle, P.E.-L.S. 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.
It is common for contracts to be open ended allowing for the possibility of future work. However, since the future assignment is “possible” not “promised” it is unrealistic for a consultant, once the original assignment is complete, to refuse any other work that “might” conflict with an unspecified future assignment from the original client. I think Danny’s actions were both ethical and responsible business practice.
i’m in agreement with the minority opinion in this case. A contract such as this should be clear about the term of services to be provided, preferably with a specified end date. Absent that, it is reasonable to assume the two-year pause constituted the completion of the contract services. An open ended contract should not be interpreted as preventing the consultant from accepting other related work. To be valid, both parties of the contract must benefit. There was no benefit to Danny under this contract once his initial consulting was completed, therefor no contract. I believe in a legal dispute, the agreement would be interpreted in favor of Danny since the government wrote the contract.
No problem accepting the work from the industrial sector since two years had lapsed since the last work from the federal agency. He did the correct thing by informing the agency that the industrial customer he was representing was the customer the agency wanted him to investigate and could not represent the agency in the investigation. How was the consultant to know if the agency would ever contact him again to perform work?
The government’s rulemaking process is supposed to be knowable by all citizens. So by subsequently working for the PRP the engineer brought no secret knowledge. The reverse is not true. And, of course it would be unethical to work for both at the same time.
I would agree with the minority opinion. 2 years had passed since the completion of the original work. That would seem long enough to presume no additional work would be requested under the original agreement
I’m with the minority on this one. Had the interval been 6 months or even a year, I might have a different opinion. After two years, the agreement is substantially moribund. Suppose the time had been 10 years instead? Would the majority continue to believe Danny was required to advise the federal agency? I doubt it. So the discussion, as I see it, is a matter of degree, not kind.
There doesn’t appear to be any retainer offered with regard to Danny’s future services to the federal agency, so the “client” relationship is tenuous at best. It would have been better for Danny’s contract with the agency to have a retainer clause or a sunset clause. If someone doesn’t call me after 2 years with regard to “future” services, I would assume they have moved on and are not interested.
There was no language in the original agreement regarding other clients. If such exculpatory language existed this would be wrong. Otherwise Danny did right by fully disclosing relationships which developed in the ensuing interval. ETHICAL
I would agree that the way Danny handled this was ethical. I think it would be unreasonable for an agency to expect a consultant not to pursue work that May be a potential conflict. Two years and no additional assignments would probably make an agency be scrutinized by there comptrollers as to why the contract is still open.
Based on the information provided, I see no reason not to accept work from an industrial client. If the government was paying a retainer to the engineer or there was ongoing work with the engineer – I think that there should be a closer review. With no communication or work between the parties for a period of two years, I believe that the engineer should be able to accept work from industrial clients (unless there was a contractual agreement that he would only work for the government – which was not mentioned in the case description). The work with the industrial client should have been shared with the government, which it was. With the information provided, I believe that the actions were ethical.
Based on the facts provided, I agree with the minority opinion.
I voted that it was ethical to accept the work from the industrial contractor…his contract with the government made no stipulations. He proves his good intentions and ethics be refusing to perform the work for the government as an adversary to his client.
What folks seem to be missing is the following “fact:” …Danny is retained to provide environmental consulting services by a major industrial corporation, which has been deemed by the federal agency to be responsible in a dispute over the clean-up of a hazardous waste site. This was the subject of Danny’s work for the government agency. Code III.4.b directly applies to this. The number of years between contracts should not matter. The fact that it was a government agency should not matter. Think of it this way, if this became a court case, who would Danny testify for?
I agree with the majority opinion. In performing the original work for the government, he became familiar with the project at government expense, and may have been privy to the governments regulatory position and certainly with the governments remediation strategy, which he apparently formulated. There is an implication in the statement that his work for the government may have involved this particular site, even if that is not the case, he gained “particular specialized knowledge” per III.4.B. The question is not whether he should do the work, the question is whether he should have informed the government prior to taking the work on to ensure that a conflict would not arise and to determine if his services would be required by the government as part of the prior contract, which has not lapsed absent some closure action.
I agree with the minority position. Based on the limited details of the case description, I’d make the assumption that the private firm was hiring Danny to help remediate this situation. You’d like to think that would also be a prime goal of the government. Nothing in the description states that he was functioning as an expert witness for either side. The government contract seemed very open ended, bordering on restraint of trade, if interpreted that it freezes him out of a substantial amount of related work.
Danny also promptly and ethically disclosed the potential conflict at the appropriate time? By the way, a conflict which he had no way of knowing would arise. How much of an ethical responsibility is he supposed to take on?
The work that Danny provided to the government seemed to be developing regulations or a regulatory position. We should all have knowledge of the government’s regulatory position so that we can navigate the rules. They should not be secret.
Danny had no idea that the government would ever come back to him with additional work. He could not turn down all industrial work in hopes that the government would again employ him.
I agree with the minority