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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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Punchlist Limbo

Posted By Mr. Ethics, Thursday, July 17, 2014
Dear Mr. Ethics,

The project architect and I recently prepared a project punchlist. The owner did not participate in the punchlist walkthrough due to a death in the family. She authorized us to proceed in her absence. I think the architect was distracted that day because he did not write some things that to me were clear punchlist items (like raised carpet; droopy copping). I am wondering if I should prepare a revised punchlist to include the items I saw. I know this will mean more work for us but I am proud of our workmanship and I think the missing items might cast us in a bad light when the owner finally walks the completed building. Out other option is to correct the issues without telling anyone. Do you have any advice?
Regards,

Punchlist Limbo



Dear Limbo,

Ethics dictates that you correct the problems after you issue a revised punchlist. While you could correct the work without letting anyone know, I think it is important for the project owner know what you are doing on the project, no matter how minor the activity. Issue the revised punchlist by saying you walked the site after the punchlist walkthrough and saw these items that were apparently over looked. This way the architect is not embarrassed and you have acted ethically.

Mr. Ethics

Tags:  MR. Ethics  Punchlist 

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Change Order Blocked

Posted By Mr. Ethics, Monday, June 16, 2014
Updated: Monday, June 9, 2014

Dear Mr. Ethics,

 

The lead project designer wants us to turn over all documents related to a change order request we have submitted.  The designer even wants our original bid sheets and profit calculations and bids from our subs.  The architect thinks the change order work was accounted for in our bid and we have enough profit margin in the project to cover it.  The architect is refusing to review our change order until we turn over those documents.  What should we do?

 

Change Order Blocked


 

Dear Blocked,

 

It is time for you to go directly to the owner and advise them of your situation.  The architect’s position is not justified.  Your bid documents, unless subject to a state disclosure law, are privileged.  What your profit margin is privileged.  The architect is acting unreasonable and unethical.  You should also review your agreement because the architect may also be in breach of its obligations. Only a court or arbitrator should be able to order you to turn over documents such as the ones you describe.

 

Mr. Ethics

Tags:  Bids  Change Orders  Mr. Ethics 

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He Said, She Said

Posted By Mr. Ethics, Thursday, May 15, 2014
Dear Mr. Ethics,

A project owner has asked us to come back to a project we completed 3 years ago. The owner is reporting water leaking in through an area of the roof where the mechanical equipment is located. This is a long term client of ours and they want us to help determine where the leak is coming from. My project manager is uneasy about going to the site since it has been so long since project close out. She thinks there may be some risk we are missing if we do as asked. I think we need to aid this client. Which one of us is right?

He Said She Said



Dear Said,

You both are right. First let me say you are under no ethical obligation to return to the site as requested by the owner. However, as a long term client you probably have a moral obligation to fulfill the request. Second, your employee is also right. If you return to the site you might be considered as having “opened” your closed contract. A court may see your actions as a continuation of your original contract. As a result the project statute of limitations and the statute of repose will be reset by the court to start running from the date you review the water infiltration problem. This would add another three years to the statutes and your risk exposure. You should advise the owner in writing that you will look at the situation but it is not part of the contract services that closed several years ago. Getting a no cost work order would also avoid opening up the original agreement and allow you to act ethically.

-Mr. Ethics

Tags:  Contracts  MR. Ethics  Project Close Out 

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Transparency in Contract Revisions

Posted By Mr. Ethics, Thursday, March 20, 2014
Updated: Wednesday, April 23, 2014

Dear Mr. Ethics,


We use AIA contract documents with all our owners and subs.  We always modify the documents to get better terms for us.  For example, we insert a “paid when paid” clause; broader indemnification; and a lien waiver provision.  We never let the owner or sub know we modified the document.  Now one of our younger employees has voiced ethical concerns about not letting the other party know about the changes we make.  What is your opinion?
 
Very truly yours, Business is Business
 



Dear Business,
 
There exists an obligation that a party entering into an agreement knows the terms and conditions of the agreement.  There is no obligation for a party to tell the other party about the terms and conditions.  Therefore, I do not think you have acted improperly in not pointing out where you have changed the agreement.   However, ethics suggests that it you want an open and transparent relationship with the party you are contracting with, and then you should advise them of the changes you have made to the standard AIA agreement.  Disclosure may not be required but I think it is the best course of action.
 
Regards, Mr. Ethics


Tags:  AIC Contracts  Mr. Ethics 

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Subcontractor Bids

Posted By Mr. Ethics, Thursday, February 20, 2014
Updated: Wednesday, April 23, 2014

Dear Mr. Ethics,


We have a subcontractor that has provided us with a bid that left out a couple of key design areas. We asked the subcontractor about this and expressed our concern that their bid amount does not cover this work. The subcontractor vigorously defended its bid and insists that it will complete the entire scope of its work for its bid amount if we award the contract to them. They also argued that as the lowest bidder they are due the subcontract. None of us here think they can do the work for their bid amount. Is it unethical to deny them the subcontract? What should we do?

Regards, Jim



Dear Jim,

You have acted ethically in providing the subcontractor with an opportunity to explain their bid and position with regard to same. The action you take next does not involve ethics but making a hard business decision. You do not owe the subcontractor with a contract. I would recommend that you contact counsel regarding the potential legal ramifications of having the subcontractor default during the project if you decide to award them the subcontract.

Regards, Mr. Ethics

Tags:  Bids  Mr. Ethics  Subcontractors 

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