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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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Top tags: Mr. Ethics  Bids  Change Orders  Contracts  Ethics  Legal  AIC Contracts  Bid Sheet  Bidding Requirements  Bonds  Change Order  Code of Ethics  Construction  Design  Disputes  EIT  Errors and Omissions  Government  Inspections  July 2015  Lawsuit  Liability  LLC  OHSA  Owners  PE  Planning  Project Close Out  Public Safety  Punchlist 

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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Bidding Requirements

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

Dear Mr. Ethics,

We are bidding a project that is located in a different state than our office. The bid documents and contract requires us to warrant we are licensed in the project state. We are not licensed in that state but will get a license if we are awarded the project. Does our bidding without a license violate any laws or codes of ethics?

Regards,

Paul



Dear Paul,

I am not sure if you are violating any laws but your bidding without the required license seems to constitute a lie. You are bidding with the knowledge that you do not meet all bid requirements yet by bidding you are representing that you are compliant. I think your intent to bid is unethical. You also need to recognize that if you are awarded the project contract you may be denied a license by the project state. If this occurs not only would you be in breach of the agreement but you may not be able to avail yourself of the judicial system of the project state in a claim situation. You may not be able to bring a claim or defend a claim in the project state. Become compliant before the bid is due.

Regards,

Mr. Ethics

 

Tags:  Bidding Requirements  Mr. Ethics 

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All About Efficiency

Posted By Mr. Ethics, Thursday, December 19, 2013
Updated: Wednesday, April 23, 2014

Dear Mr. Ethics,

As a contractor is it unethical for us to change the design of the architect in order to correct a design error without first telling the architect? We find it to be easier to make the change and then let the architect know about what we did. We seem to be able to keep the project moving by this approach. We do not have to wait days for a response.

Regards, All About Efficiency


While you may be acting ethically I am not sure your being as smart.



Dear Efficiency,

As long as you're notifying everyone (architect and owner) your acting ethically. While you may be acting ethically I am not sure your being as smart. What happens if the owner rejects your change? Also, I am sure you're contracts call for you to give the architect and owner pre-notice of any changes before you make any change if you want to be compensated for same. Give the owner and architect a heads up and get their responses before you go ahead with the changed work.

Regards, Mr. Ethics


Tags:  Design  Mr. Ethics 

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Confidential Bid Sheet and an Unethical Owner

Posted By Mr. Ethics, Thursday, September 19, 2013
Updated: Wednesday, April 23, 2014

Dear Mr. Ethics,

When we submitted our bid to the project owner we accidentally included a copy of our final bid sheet. We discovered our error when the project owner called to advise us that we are the lowest bidder but they want to discuss lowering our number because of the bid sheet. We have told the owner that it is not right but their reply has been “you opened the door.” The owner also told us that if we do not talk about lowering our bid they will re-bid the project because our bid sheet shows the project can be done for less while leaving room for a “reasonable” profit.” What should we do with this unethical owner?

Brett



Dear Brett,

There is no question that the owner is acting unethically. The owner knew or should have known that the bid sheet was confidential information. The owner should have returned it to you immediately. The owner’s attempts to use it against you is unconscionable and a violation of the established bid process. Advise the owner it is acting unethically and that it is in violation of the bidding process. If this is a public project you may want to mention the possible legal violations the owner is committing since public bids are specifically governed by law in most states. Regardless of project type you may want to seek court intervention since you right to make whatever profit you can is usually protected by courts.

Respectfully, Mr. Ethics

Tags:  Bid Sheet  Mr. Ethics  Owners 

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Risk Exposure

Posted By Mr. Ethics, Thursday, July 18, 2013
Updated: Wednesday, April 23, 2014

Dear Mr. Ethics,

There seems to be a growing trend in the construction industry whereby project owners are placing all risk on the design professional or contractor. Owners are assuming less and less risk exposure through contract provisions that assign risk away from them. Additionally, we are being asked to carry higher limits of liability on our insurance policies while also assuming an indemnification obligation that protects the owner from claims even if the owner is the cause of the claim. Lastly, owners are insisting on being listed as additional named insureds on policies. This isn’t ethical, is it?

Very truly yours, Ami

All parties to a project should assume the risk exposure that they can control



Dear Ami,

It is unethical for a party to assign risk exposure that it is in the best position to control. Construction parties should be assuming that risk exposure that they control through their performance of work, services and/or actions. Risk that is assigned to party who has no ability to control same is not reasonable or ethical. All parties to a project should assume the risk exposure that they can control. That is the way claims are controlled and in some cases prevented. Owners forget that even though they may slough risk onto another when a claim arises they will be brought into that claim. Claim filings increase when a party cannot control its risk exposure.

Regards, Mr. Ethics


Tags:  Liability  Mr. Ethics  Risk 

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