Company A and Company B quote? 7

[SteelPE]

We were approached by company A to prepare some preliminary drawings for a small office building. The job consisted of running quick calculations and preparing some drawings so the job could be estimated by a fabricator. We quoted company A a small fee to perform the work and get them the information they required (which would take 3-4 days to complete). We submitted a quote to company A and never heard from them again.

Company B comes to us with the same job as company A. We give Company B the same quote to do the same work as company A. Company B gives us the go ahead to perform the work. We complete the work and give a bill to company B (it takes a little longer than estimated but that’s not their fault) and company B pays the bill. Everyone is happy. Company B knows we were in contact with Company A.

If the job goes forward, company B will be paying us to complete the job.

Now we get a call from company A to go ahead on the preliminary drawings for same job we just did with Company B…. and there is the dilemma.

Do we charge company A the agreed to price or do we give a credit to company B and split the bill between the two companies? What would others do in this situation? It’s unfair to only charge B and I believe it’s unfair to the owner (who is getting quotes from Company A and B) to charge 2x for services that were only done once.

 

[jmw]

And that last point is where I am in trouble now.
I have a relationship with a client that requires exclusivity and confidentiality.
A new company, a competitor of the first, has approached me and the expectation has to be that their requirements will be exactly the same as the first company.
At the moment I am faced with simply ignoring them because I am not even sure I can say that I am already dealing with another un-named company (it may not be that difficult to work out who).
But this is a quite different situation to the one outlined above.

JMW

http://www.ViscoAnalyser.com

 

[KENAT]

It's called a Chinese Wall jmw, we fell into that situation a few times at a previous employer. We had certain competencies that were fairly unique in our field in the UK so when primes were bidding to the govt several of them sometimes come to us.

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[IRstuff]

We usually refer to situations like that as requiring a "firewall," which means two completely different, independent, and isolated, groups of people working on the two separate efforts.

TTFN

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[patprimmer]

BA

Go or your life on the semantics of implied or states.

To my mind, I have contracted to your competitor STATES you have contracted to your competitor.

I may have a conflict of interest implies it but does not actually state it.

If there are only two possibilities, implying or stating that you are working for a competitor does identify the other party. If there is three or four possibilities and you all know your industry and who plays with who, you still identified them.

As to professional disciplinary committees findings vs actual ethics, well that's another story altogether.

Regards
Pat
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[SteelPE]

Wow, such varying opinions, I like the discussion especially since it is across disciplines.

Another little interesting bit of information is in regards to the foundation design. The soils on site are a suspect. Therefore part of the bid needs to include some form of special foundation system. Well, the preferred foundation system is a proprietary system that can only be bought from one contractor. As luck would have it, Company A and Company B both ended up at the same place. In talking to Company B we believe that the foundation contractor took the information provided to them by Company B and quoted Company A the same price as Company B. Without our information Company A could not have been quoted due to the lack of information.

 

[jmw]

Now this is where it does become interesting.

If the quote you provided to companies A and B was identical because each approached you with identical information and neither influenced the bid in any way, then each will have provided the foundation contractor with identical information when they took up those quotes.

So if the foundation company on receipt of that information has originated a solution based on identical data received, then the bids ought to be the same. But if one company has influenced the nature of the bid through original contributions to the discussion, then it is not ethical to vary the bid to the second contractor based on that original contribution.

So Company B appears to be unhappy with the fact that company A obtained an identical quote from the foundation contractor but is not, I infer, unhappy with your company for also giving identical quotes to A & B.
And the difference is, neither A nor B had any original input the to quotes your provided and the work you delivered.

Of course, at this level, the real problem here would seem to be that the client is intent on a two or three bid process and the fact that both bidding contractors have approached the same sub-contractors suggests that there are insufficient choices of subcontractors to support a multiple bid system unless the client changes the bidding instructions. Or that the sub-contractors are leaders in the field or have been specified by the client as approved contractors.
In any event, the fact that some of the sub-contractor quotes are identical doesn't matter. A & B will have to find some other differentiator if they want the final contract.

Nothing wrong with that.

JMW

http://www.ViscoAnalyser.com

 

[KENAT]

IRstuff, our problem was we only had a very small team and in certain roles only one person so we couldn't have 2 totally independent teams.

Plus, at least the example I'm thinking of, we were basing our solution on a common existing product which further complicated things.

Basically, it came down to not feeding any information we got from one party to the other, and being careful not to let any ideas from customer 'A' creep across into our design for customer 'B'. However, any ideas we came up with originally, we'd use on both bids as I recall. I can't recall for sure but as this was at the bid process we were doing the work at risk so there wasn't too much of an issue of unfairly billing one or the other.

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[RacingAZ]

Check with your State board. In AZ, there is a board rule that says you can only be compensated by a single party on a given project. If compensation would come from more than 1 party, it is allowed as long as there would not be a conflict of interest and full disclosure is required to all parties involved.

We're in a regulated profession (at least those with PE's) so we can't really compare the services that we provide vs. selling a physical item.

And I get David's reasoning but board rules trump it. Ron's advice is along what my State board requires. I'm sure AZ is not the only one.

 

[swertel]

This is actually a great ethical discussion, one this board hasn't seen in a while. There are plenty of resources on this very subject. RacingAZ states the obvious. I know that NSPE has used an example similar to this as part of its ethics training.

--Scott

http://www.wertel.pro

 

[swertel]

RacingAZ,

I remember reading that reference, but can't find it on the AZ BTR website. Do you have the A.R.S. number or link to the compensation information?

--Scott

http://www.wertel.pro

 

[SteelPE]

swertel

Look at section 4a and 4b of the attached (at the website of NSPE which you just recommended).

http://www.nspe.org/Ethics/CodeofEthics/index.html

 

[SteelPE]

How would a design-build project be perceived under the code of ethics for engineers listed above?

This project is basically being delivered to the owner through some sort of quasi design-build delivery system. What is hampering my original question is the fact that for some reason, all parties have access to the same generic architectural drawings.

Company A and Company B are both contractors who, at the request of the owner, are to prepare a design-build package for a building (actually an identical set of buildings but that doesn't matter). This means they are suppose to provide a quote for a full architectural and MEP set of drawings, obtain all permits and actually build the structure.

If company A and B were developing a different set of architectural plans based upon the owners requirements then it would be more straight forward. However, contrary to what was discussed above, no ideas were bounced back an forth. All ideas on framing were generated in our preliminary framing design and foundation loading information we provided to Company B base upon the generic plans.

If I remember correctly, we quoted preliminary design and final design to both companies. Both companies got the same preliminary design number however, they got different final design numbers. However, this was because the scope of work for Contractor A was different than the scope of work for Contractor B (Contractor B wanted foundation design while Contractor A did not want to retain our services for this portion of the project).

So, in a design-build delivery system. If two separate contractors are preparing bids for a single owner on a project and they are both developing different architectural schemes and an engineering company is contracted to both contractors to provide the preliminary framing schemes and plans then the engineering company would be in conflict with the engineering code of ethics for receiving compensation for a same project from multiple sources?

 

[zdas04]

RacingAZ,
I am absolutely not talking about charging two people for the same block of work. Not even close. I'm talking about doing two unrelated projects, new drawings, new calculations, new everything without referencing the first job's files, printouts, or calculations. Money from two companies for doing two tasks that happen to be working toward the same goal.

If I copied the first company's drawings and changed the title block then I would be in violation of both ethical standards and confidentiality agreements. I am talking about doing a new project for the second company which doesn't violate either ethical standards or confidentiality agreements.

David

 

[BAretired]

The NSPE Code of Ethics for Engineers, Item 4a. and 4b.

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

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.

b. Engineers shall not accept compensation, financial or otherwise, from more than one party for services on the same project, or for services pertaining to the same project, unless the circumstances are fully disclosed and agreed to by all interested parties.

SteelPE,

You cannot be certain that there will be a conflict of interest, but there is certainly potential for one. You have been paid for the work by B.

It seems to me that B would have to agree before you provide your preliminary design to A. If he does agree, he will probably expect a financial consideration. If he does not agree, you must tell A that there is a conflict of interest and you cannot provide the service to him.

At least, that is the way I see it.



BA

 

[MintJulep]

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.

Companies A and B appear to be competing for the same job. Both are contracting you for proposal support on a sub-set of that job. Where is the conflict? How is the quality of YOUR work influenced? How is your engineering judgement as it pertains to your work influenced? There is no actual or apparent conflict of interest here. In fact it is essential that you provide the same information to each to avoid the potential appearance of a conflict. If you provide different information it could appear that you are attempting to favor one client.

b. Engineers shall not accept compensation, financial or otherwise, from more than one party for services on the same project, or for services pertaining to the same project, unless the circumstances are fully disclosed and agreed to by all interested parties.

YOU have two projects. One project for company A and a different project for company B. A and B are each preparing proposals. Neither has apparently been awarded the job. Your services are in no way pertaining to the same job. You are supporting two separate proposals. Your fee is being paid out of the overhead or proposal budgets for companies A and B, not out of the budget of the ultimate end user. Separate work for separate clients.

 

[BAretired]

Where is the conflict? The work you prepared for Company B, for which you have been fully compensated is now to be turned over to Company A without the knowledge or consent of Company B.

If Company B, upon learning of your actions, registers a complaint with your professional association alleging that you have behaved unprofessionally in that you have violated NSPE Code of Ethics paragraphs 4a. and 4b., you will need to prepare yourself for a discipline hearing, MintJulep. Wouldn't it be easier to play by the rules?

BA

 

[hokie66]

I think MintJulep is right. The key is that this is in a design-build environment, and as far as I can tell, that means anything goes. Thus, the master architectural document on which the bids will be based. There is nothing wrong with providing quotations and preliminary advice to two bidders. The advice can be the same or different, depending on the brief given by the bidder, or on the engineer's assessment of the bidder's capability. The price can be the same or different for the same reasons.

 

[MacGyverS2000]

I keep seeing comments about not simply changing the title block of the drawings and handing them over for a second payment... is that not what architects do everyday? Standard detail drawings are boilerplate drawings that have their title blocks changed with the new project name... but as a customer, I get charged the same regardless of how many projects it has been used on in the past. The calculations for coming up with those detail drawings didn't change, so should they be forced to turn them over to me without charge? Doesn't seem right...

Dan - Owner

http://www.Hi-TecDesigns.com

 

[MintJulep]

The work you prepared for Company B, for which you have been fully compensated is now to be turned over to Company A without the knowledge or consent of Company B.

So in your world BAretired, if I do anything for one client I can never do the exact same thing for another client, ever?

I spec out a 60 ton chiller with an air cooled condenser for one building because it matches the load. Now that spec is bought and paid for by that client so I can never ever spec a 60 ton chiller and air cooled condenser again?

That ludicrous.

 

[zdas04]

Dan,
It all depends on who owns the drawings. The Architect that reuses drawings over and over owns those drawings. I have a drip design that I did on spec, no one paid for my time to prepare it that I have provided to 10 different clients. If a particular client needs something different (extra nozzle, etc.) then I charge them for the modifications to the design drawings and calculations, not for generating them in the first place. Then I don't use the modified drawings for other clients.

MintJulep,
You are being pretty careful to only read what you want to read. You can design the chiller from first principles as many times as someone will pay you to do it. You just can't use the work product from another client to short-cut the process and charge for doing the project from first principles. If you own the design then you can reuse it. If your client owns the design they you can't. If you reuse it, you can't charge for the hours you avoided by not having to do the work.

David