This is the April 2020 edition of PDHengineer’s 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.

A Review of the Facts

An owner is in the process of selecting an engineering firm to perform design services in connection with the construction of a manufacturing facility. The owner employs a qualifications-based selection procedure in which firms submit their qualifications and the best qualified firm is selected subject to negotiations on the fee. Following selection by the owner of Engineer Mark, the owner contracts with Engineer Greg, principal in one of the firms that had submitted its qualifications to the owner, to assist the owner in its negotiations with Mark. Greg agrees to perform the services.

Was it ethical for Greg to agree to assist the owner in its negotiations with Mark?

Here is the result of our survey of your peers:

60% not ethical; 40% ethical

Applicable NSPE Code References:
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.1.e: Engineers shall not promote their own interest at the expense of the dignity and integrity of the profession.
Code Code III.6: Engineers shall not attempt to obtain employment or advancement or professional engagements by untruthfully criticizing other engineers, or by other improper or questionable methods.
Code III.7.a: Engineers in private practice shall not review the work of another engineer for the same client, except with the knowledge of such engineer, or unless the connection of such engineer with the work has been terminated.

Discussion

The facts in this case are unique and have never been considered before by the Board. The Preamble requires that services by engineers be with “…honesty, impartiality, fairness and equity…” We find it difficult to believe that Greg can approach the negotiations complying with this criteria having lost the assignment to Mark. The facts do not indicate that Greg has disqualified himself from future considerations should the owner fail to negotiate a satisfactory fee arrangement. It is conceivable, therefore, that Greg might have another opportunity for this assignment; hence, possibly affecting his impartiality. Under this circumstance there can be a perception that Greg could be in violation of Code III.7.

While the owner and Mark are aware of the prior involvement of Greg in the selection process, Greg apparently has not withdrawn from future consideration for this assignment and other future assignments for this owner. Code II.4.a calls on the engineer to “disclose all known or potential conflicts of interest that could influence or appear to influence their judgment or the quality of their services.” It is not enough for Greg to assume, and probably correctly so, that all parties are aware of his potential conflict of interest. The Code clearly requires the engineer to call this to the attention of all parties. Apparently, Greg did not do so.

Code III.1.e. requires the engineer to “avoid any act tending to promote their own interest at the expense of the dignity and integrity of the profession.” While Greg may make a reasonable effort to be impartial and fair in representing the owner in the negotiations, the perception will be to the contrary. Such perceptions are not in the best interest of the profession.

Another consideration in this case is whether in assisting the owner in its negotiations with Mark concerning the design fee, Greg is actually engaged in the “review of work of another engineer for the same client.” We conclude that the negotiations concerning the design fee clearly falls within the functions and activities of involved in work perform by engineers. Such negotiations involve a careful analysis of the scope of engineering services to be provided by the engineer to the client. Therefore we conclude that the activities of Greg involves the review of the work of Mark.

Having concluded that Code III.7.a would apply to the facts under consideration and that the activities of Greg involves the review of the work of Mark, we are of the opinion that Greg would have an ethical obligation to provide notice to Mark that he would be assisting the owner in its negotiations with Mark. Again the Board notes that there is nothing to indicate in the facts that Mark, knew or had any reason to know, that Greg agreed to perform those services for the client.

The Ethical Review Board’s Conclusion

It is not ethical

It was unethical for Greg to agree to assist the owner in its negotiation with Engineer Mike since (1) Greg had not withdrawn from consideration for the assignment should the owner fail to satisfactorily negotiate a fee and (2) Greg did not notify Mark that he would be assisting in the fee negotiations.

BOARD OF ETHICAL REVIEW
James G. Fuller, P.E.; Donald L. Hiatte, P.E.; William W. Middleton, P.E.; Robert L. Nichols, P.E.; William E. Norris, P.E.; Jimmy H. Smith, P.E.; William A. Cox, Jr., P.E., Chairman

Dissenting Opinion:
It was ethical for Greg to agree to assist the owner in his negotiations with Mark. None of the facts indicate he would have any trouble being “honest, impartial, fair or equitable” as indicated in the preamble. He may have lost the manufacturing facility job to Mark but appears to have made a good impression on the owner that holds potential for the future. Who better to negotiate the contract for the owner than another engineer, a lawyer?

The facts give no indication that Section III.6 even comes into the picture. Obtaining a position as the owner’s rep “by untruthfully criticizing” Mark is not even hinted at, and acting as the owners rep would not “promote his own interest at the expense of the dignity and integrity of the profession.”

It is a far stretch of the imagination to think negotiating a contract is “a review of another’s work” and if Mark believes this he will certainly “have knowledge” when negotiations begin. (no violation of III.7.a).

Section II.4.a requires the engineer “to disclose known or potential conflicts of interest to their clients”. The client is already aware of Greg not receiving the manufacturing facility as he decided to award it to Mark. If there is any conflict, the client knows it.

— James G. Fuller, P.E.

Note: The Board of Ethical Review operates on an “ad hoc” educational basis, and does not engage in resolving disputes of fact between parties in actual cases. That function is left to the state society if members are involved in judging whether a member has violated the Code of Ethics. Being solely educational, the function of the Board is to take the submission of “facts” as the basis for analysis and opinion without attempting to obtain rebuttal or comment from other parties. On that basis, the reader of the opinions should always recognize that the Board of Ethical Review is not an adjudicatory body, and unless indicated otherwise, its opinions are not binding upon the National Society of Professional Engineers, any state engineering society or any individual. Instead, the opinions represent the opinions of licensed engineers as to the reasonable standards of practice within the engineering profession. Board of Ethical Review opinions are intended to provide guidance in actual cases only to the extent of the “facts”, stated in the case. Cases may be reproduced for educational purposes as long as the material reproduced provides appropriate attribution to NSPE and the Board of Ethical Review.