Question

2) For each ethical case shown Case a) answer the questions with brief explanation. (10 points) Facts: Engineer A works for an engin xov fa rices for bot neering fim, WXY Engineering, that performs professional Engany x. Esimated bucst Bompany X. The engineering fees on the project have t amount agreed to between the engineering firm and eer A's direct supervisor at WXY Engineering, advises a private private and governmental clients. Engineer A is working on xceeded the estimated budget Engineer B, Engineer r A to charge his future t ngineer ae Companyider budget. Although the engineering services for aiticipated tecy, the budge not reated, neither Company X nor Company Y are a pany Y, which was well me on the project for Company X to the budget of pany X and and it is not exceed its pany Y are not related, neither involved do not relate to any public funds, a oudget with Compn dtional charges will cause the WXY Engineering to ox Questions: anti cipated that the com t be ethical for Engineer A to charge his time for Company x to the budget of Company Y? Was it ethical for Engineer B to direct Engineer A to charge Engineer A's time for Company X to the budget of Company Y? 2 Case b) Engineer A's engineering firm ABC&D (A) enters into a joint venture with Engineer W's engineering firm WXY&Z (W) to perform certain private design and inspection work in State S on an ongoing and active basis. Later, Engineer A's firm establishes a proposed joint venture with Contractor R on a proposed design/build project for a utility district in State Y and submits a proposal to the H utility district. By coincidence, Engineer W's firm also establishes a proposed joint venture with Contractor R on a proposed design/build project for a utility district in State Y and submits a proposal to the J utility district. The Engineer W/Contractor R joint venture is selected. Thereafter, Engineer A's firm is invited by the J utility district to serve as an Facts: independent inspector for the work of the Engineer W/Contractor R joint venture. Question: Engineer W/Contractor R joint venture? Would it be ethical for Engineer A to serve as an independent inspector for the work of the

Answer 1

CASE A)

NSPE Code of Ethics References:

Section II.1.d.
Engineers shall not permit the use of their name or associate in business ventures with any person or firm that they
believe is engaged in fraudulent or dishonest enterprise.

Section II.3.a.
Engineers shall be objective and truthful in professional reports, statements, or testimony. They shall include all
relevant and pertinent information in such reports, statements, or testimony, which should bear the date indicating
when it was current.

Section II.4.
Engineers shall act for each employer or client as faithful agents or trustees.

Section II.5.
Engineers shall avoid deceptive acts.

Discussion:
The ethical obligations of professional engineers clearly go beyond merely the technical
aspects of engineering practice. Those obligations extend to the professional and
business aspects of engineering. Over the years, the Board of Ethical Review has
considered many cases that reinforce this basic and essential point.As an example, BER Case No. 08-1 involved Engineer A, who was a recently hired
software engineer recruited from college by HyTechCo, a global software company. As
part of his first assignment, Engineer A’s supervisor, Engineer B, requested that Engineer
A write software to provide security for e-mailed documents within HyTechCo. After
completing the project, Engineer A read a news story on an IT industry website about an
individual with another company who had made similar software available to overseas
clients and was being investigated by the government because of US laws that prohibited
sending such software overseas because of national security concerns. Engineer A
learned that the software he developed for HyTechCo had been sent overseas by
HyTechCo’s IT department for use by HyTechCo’s offices abroad. Engineer A informed
Engineer B, who responded without the benefit of consulting legal counsel that since
HyTechCo was a US-based company (i.e., not a threat to US national security) and will
be using the software solely for internal purposes, not selling it, there would be no
problem. Engineer A agreed but later learned that one of HyTechCo’s overseas offices
had been permitting company contractors to use the software to exchange secured e-
mail documents. The Board decided that Engineer A had an obligation to discuss this
matter with Engineer B and provide all of the facts and circumstances to Engineer B’s
attention. The Board noted that while it may be anticipated that Engineer B will carefully
look into this matter to verify Engineer A’s concerns, in the event that Engineer B does
not take this action, it would be ethically proper for Engineer A to either seek an appeal
of this matter at a higher management level within HyTechCo or recommend that
Engineer B seek a written opinion from HyTechCo’s legal department regarding this
matter and that Engineers A and B may want to consider documenting the actions and
discussions taken by them. The Board also noted that young engineers just beginning
their professional careers often find it difficult to challenge superiors in matters of
professional practice; often there is a tendency to “go along,” “not question authority,” and
“be loyal to the company.” However, it was the Board’s view that the most loyal action a
young engineer or any engineer within a company can take is to communicate the fact
that the company may be taking a risky path by pursuing an action that will be illegal or
cause great embarrassment for the company.

Turning to the facts in the present case, the Board is troubled by the invoicing practices
of WXY Engineering. Based on the facts, there does not appear to be any justification for
assigning engineering services charges attributable to work on behalf of Company X to
the budget of Company Y. Without further justification under the facts present, the Board
can only assume that these charges are at a minimum a misrepresentation and could
constitute fraudulent activity. It is wholly immaterial that these charges do not involve a
governmental agency, or that the budgets involved do not relate to any public funds, or
that it is not anticipated that the additional charges will cause the WXY Engineering to
exceed its budget with Company Y. Such practices are unacceptable regardless of
whether they involve private clients or public agencies.
Engineer A should express his strong concerns to Engineer B, and if Engineer B insists
that Engineer A attribute his time on engineering services for Company X to Company Y
and that view is sustained within the management of WXY Engineering, the Board
believes the guidance in BER Case 11-8 applies to these facts: If Engineer A is not
convinced that Engineer B is operating in an ethical and legal manner, Engineer A should
disassociate from WXY Engineering, that is resign, in order to remove his name from
possible unethical and illegal actions by WXY Engineering. Further, Engineer A must
bring his concerns to the proper authorities, such as the state attorney’s office.

Conclusions:
1. It would be unethical for Engineer A to charge his time for Company X to the budget
of Company Y.
2. It was unethical for Engineer B to direct Engineer A to charge Engineer A’s time
for Company X to the budget of Company Y.

CASE B)

NPSE Code Of Ethics References:

Section II.4. - Code of Ethics: Engineers shall act for each employer or client as faithful agents or trustees.
Section II.4.a. - Code of Ethics: 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.
Section III.5.b. - Code of Ethics: Engineers shall not accept commissions or allowances, directly or indirectly, from contractors or
other parties dealing with clients or employers of the Engineer in connection with work for which
the Engineer is responsible.
Section III.7.a. - Code of Ethics: 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 NSPE Board of Ethical Review (Board) has noted on numerous occasions that engineers
consistently face conflicts of interest in their professional practice. The Board has considered
conflicts of interest involving engineering practice on many occasions and these cases are
generally determined by considering all of the facts and circumstances involved in the case.
In BER Case 87-3, Greenhill County 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. Greenhill County selected and retained
Engineer A's firm. One of Engineer A's responsibilities was to inspect a building project
developed by Enterprise, Inc., a company for which she has regularly performed services in thepast. Although she did not provide any services in connection with the building project in
question, Engineer A and Enterprise, Inc. anticipated that they would continue to work together
in the future. In contract negotiations with the county, Engineer A disclosed this relationship
with Enterprise, Inc. and it became a matter of public record. In finding that it would not be
unethical for Engineer A to perform building inspection services for the county in connection
with the project developed by Enterprise, Inc., the Board noted that this was not 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 raised a question of
propriety. Rather, Engineer A was being asked to perform basic inspection services in
connection with a building with which she never previously had been involved, but which was
developed by a former and possibly future client. While the Board noted that Engineer A clearly
had a professional obligation under NSPE Code Sections II.4. and II.4.a. to disclose her
relationship with Enterprise, Inc. to the Greenhill County, the Board did not believe it would be
necessary for Engineer A to decline to perform the inspection services. Said the Board, “to
prohibit Engineer A 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 the public health and safety.”
More recently in BER Case 94-1, Engineer A was retained by a developer in the early stages of a
project to perform site and engineering studies in connection with a major development project.
Later, Engineer A was selected by the state's department of transportation to oversee numerous
subconsultants in the preliminary design work for the proposed widening of eight miles of an
interstate highway and proposed construction of a new interchange to serve the major
development project. That work would be incorporated into the federal environmental impact
statement analyzing the road project's effect on traffic and air quality. Engineer A officially
informed the state department of transportation of his earlier work for the developer. In finding
that it was unethical for Engineer A to accept the contract with the state's department of
transportation, the Board noted that a sufficient distance did not exist between Engineer A's
relationship with the developer and Engineer A's relationship with the state department of
transportation. The work being performed by Engineer A for the developer was very specific in
nature and the work might have some impact on the services he performed for the state. While
Engineer A fully complied with his obligations under the NSPE Code of Ethics by promptly
informing the Department of Transportation of his prior business association, the Board did not
believe that the disclosure of a conflict of interest to all interested parties absolved the engineer
of ethical concerns that could arise. There may be some circumstances where a conflict is so
serious and the impact so great that disclosure alone would not be sufficient to address all ethical
questions involved. Moreover, there may be situations where the conflict may not be viewed as
serious to the affected public agency but could raise questions of ethics in the mind of the public.
Turning to the facts in the present case, the Board is of the opinion that the facts are more similar
to the factual circumstances involved in BER Case 94-1 than those in BER Case 87-3. As apreliminary matter, with the sizeable increase in the amount of design-build work being
performed by engineers, engineers will need to maintain a high degree of flexibility and
interchangeability in their relationships with other engineering firms, contractors, owners, etc.
Increasingly, engineers may find themselves joint venturing with contractors on design-build
projects and later on a different project representing owners in reviewing the work of design-
builders, contractors and design professionals. It is the Board’s view that full disclosure will not
always be the method by which engineers facing conflicts of interest will be able to address this
issue ethically. Since the objective on design-build projects is single point responsibility and
close coordination of design and construction services for the benefit of the client, it is important
that in order for an engineer to meet the obligation of “faithful agent and trustee,” the client be
fully aware of any prior or existing relationship(s) that may exist that could raise conflicts of
interest, particularly where, as here, the engineer is being requested to perform inspection
services for the benefit of the client.
In the present case, it is incumbent upon Engineer A to disclose to the utility district that
Engineer A currently has an active joint venture with Engineer W’s engineering firm WXY&Z
(W) to perform certain private design and inspection work in State S and also that Engineer A’s
firm established a speculative joint venture with Contractor R on a proposed design/build project
for a utility district in State Y. Although these projects may not directly affect the work being
performed by Engineer A for utility district J, it is for utility district J to determine whether a
conflict exists and what steps, if any, would be necessary to address the conflict. However, as
here, where an engineer has an active and ongoing relationship, disclosure would not appear to
be enough to meet the ethical obligation to act as a faithful agent and trustee to the client.
Conclusion:
It would not be ethical for Engineer A to serve as an independent inspector for the work of
Engineer W/Contractor R joint venture since Engineer A would not be able to serve as a faithful
agent and trustee.