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Ever find yourself in a sticky ethical situation? Mr. Ethics has your back! Mr. Ethics is here to take your questions and give you his input on how to best deal with your situation. Have a question for Mr. Ethics? Send it to info@professionalconstructor.org and he may respond to you here on the Mr. Ethics Blog.

 

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Mr. Ethics - November 2015

Posted By Mr. Ethics, Monday, November 30, 2015

Dear Mr. Ethics,

 

We are the architect of record for a hospital, new construction project.  Our contract calls for us to be the initial decision maker for any contractor disputes that arise on the project including any claims that allege errors and omissions against us.   The general contractor wants that provision stricken from the project agreements because they believe that we should not be ruling on our own potential errors or omissions.  They argue its patently unethical.  I think their request is insulting.  We can render unbiased decisions.  What do you think about the request?

 

Very truly yours,

 

Insulted in Utah

  

 

 

Dear Insulted,

 

I am sure that you can ethically carry out your obligations under this provision but this may be one request you should support.   Perceptions can be stronger than reality when it comes to acting ethically.  Even if a ruling is unbiased a perception is still going to be that you were covering an exposure of liability that you committed.  Moreover, if you determine that an error or omission did occur you could be considered to have admitted liability for any costs incurred as a result of same.  Admissions of liability, if made without the consent of your professional liability carrier may result in your coverage being voided.  Although you are committed acting in an ethical manner, and perceptions of impropriety may be unethical in themselves, you may want to consider the general contractor’s request.  Sometimes it may be better to decline a responsibility so long as it is not unethical to do same.  This may be one of those times.  

 

Regards, Mr. Ethics.

Tags:  Contracts  Disputes  Errors and Omissions  Mr. Ethics 

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Mr. Ethics - October 2015

Posted By Mr. Ethics, Wednesday, October 28, 2015

 

Dear Mr. Ethics,

 

I have recently graduated from engineering college.  I was hired by a great mechanical engineering firm.  I regularly attend project presentations with the senior staff.  One particular senior member is a great guy who probably knows more than I ever will.  My problem is that when we do our presentations he never corrects the potential client when they refer to him as a PE.  He never graduated from college and never even sat for the PE.   I think he is acting unethically.  Should l discuss this with my boss?

 

Regards, EIT

 


 


Dear EIT,

 

I am not sure if I have enough information to give you a clear answer.  There are many people in the industry that came up in a time when a college engineering degree or PE defined their talent.  So long as the company reviewed and accepted their work as their own there is no issue.  If the individual is specifically representing themselves as a PE then there is a definite issue.  My recommendation would be to talk to your boss about what you can say or not say as an EIT in a meeting.  Ask him if you have to correct someone who may think you are a PE and how the company wants you to do same.  Hear what your boss has to say and then decide if the other employee’s actions remain troubling to you.

 

Regards, Mr. Ethics.

Tags:  EIT  MR. Ethics  PE 

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Change Order Conflicted

Posted By Mr. Ethics, Tuesday, July 28, 2015
Dear Mr. Ethics,
 
I consider myself an ethical person.  Doing the right thing has always come easy.  I am now faced with a situation where I am uncertain what to do.  The construction manager on a project I am running has confided in me that he anticipates taking a new job in a few weeks.  He is trying to clear out some outstanding change orders before that time.  He is negotiating hard with me over the change orders but once we settle on a cost he adds a bump to it as recognition of the good relationship we have had on the project.  My problem is that I like the “bump” I am getting but it feels unethical.  Should I tell the CM’s boss and the owner what is occurring? 
 
Regards, Change Order Conflicted


 
Dear Conflicted,
 
I do not think you should contact either the CM’s boss or the owner.  First you do not know if something may occur where the CM will not get the new position.  Second, you say the CM is negotiating hard on behave of his company and the owner.   If you are concerned about the “bump” thank the CM for the gesture but refuse it.
 
Regards, Mr. Ethics.

Tags:  Change Orders  July 2015  Mr. Ethics 

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Undecided

Posted By Mr. Ethics, Wednesday, June 24, 2015
Updated: Friday, June 19, 2015

Dear Mr. Ethics,

My partners are telling me we should be forming limited liability corporations for every project we do. They tell me that these “L.L.C.’s” will legally protect our personal assets and the assets of our regular company. They say our only risk is the assets that are in the L.L.C. for the project. Basically, if something goes wrong, we can walk away without much worry. I really like that idea but it kind of feels that in a bad situation we will leave others holding the bag. Can you give me some insight?

Regards, Undecided Partner


  

Dear Undecided,

  

LLC’s have been around for decades and are perfectly legal. Those contracting with LLC’s generally know what they are about. So there is nothing wrong with forming LLC’s as a project delivery vehicle. Ethics come into play when the LLC is deliberately underfunded for a project. This is often done to allow the LLC to draw off the profits from the project and then leaving the remaining parties to fund the project and claims that will arise. Consult legal counsel about the pros and cons of a LLC and then use it properly if formed.

Regards, Mr. Ethics

Tags:  Legal  LLC 

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Fogged Windows

Posted By Mr. Ethics, Thursday, May 21, 2015

Dear Mr. Ethics,

I just came from a project meeting where the owner said he wants to upgrade the windows we will be installing on a four story condo project. The owner gave me a change order with the cost he wants to pay for the upgrade. He indicated that he and the architect researched the windows and think the change order reflects a fair price for the upgrade. I do not know what research they did but I can supply the upgraded windows for 25% less than the owner’s proposed costs and still make a healthy profit. Am I under any obligation to set the owner straight?

Fogged Windows

 




Dear Fogged,

I liken this to a situation where someone does not understand what they have. It is like someone who offers to sell you a ring for $50 because its cubic zirconia. You know however the ring is a real diamond worth thousand times the asking price. You can pay the $50 and run but you may not feel good about it later. I think an ethical person would disclose to the owner you can do it for less. You will still earn your “healthy” profit and also gain in your reputation which is priceless.

Mr. Ethics.

Tags:  Change Order  MR. Ethics  Reputation 

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