Structural Engineer Owning a Contracting Business (Ethics) 2

[Simba13]

I swear I thought there was an ethics sub forum but I can't seem to find it (it's Monday morning ). My question is this: what are the ethical implications of a structural engineer owning a contracting company that goes out and does the work? The work is fairly small scale but for example the engineer will design a beam or header to remove a wall and employs a contractor that goes and builds his design? I'm not an ethics professor but something about this kind of sets off red flags, might be fine but I was curious as I know of someone that does this. I think he owns two separate companies, one for engineering and one for contracting.

 

[dauwerda]

Isn't this precisely what design-build is? If someone is willing to hire you to both design it and build it I don't see what the issue is.

 

[JLNJ]

Call the licensing board in your jurisdiction and ask if there are any specific ethical provisions which bar the practice.

As a licensed engineer your first obligation is to the public. Public safety is #1. Secondly, a licensed engineer should act in accordance with the Owner's best interests.

I'm not sure a Contractor has those same professional, ethical obligations. It can be a fox-watching-the-henhouse type situation, especially if it's Design Build. With DB, Every penny squeezed out of the project goes into the Contractor's pocket. This doesn't seem like an Owner/Public first type arrangement, but DB is a very, very common form of project delivery.

That said, I'm sure there are many, many successful Contracting firms owned by engineers.

 

[MIStructE_IRE]

What’s your concern here?

My car was designed and built by the same company, as was my tv, my phone, my ikea table... although i assembled that myself...

Its just design & build. Makes sense to do that if you can.

 

[kipfoot]

I don't see anything unethical in the setup of the business. I've often thought, "man, I'm in the wrong business" when I hear what contractors are charging for some simple renovation. Here's someone who did something about it.

I have seen what I consider to be unethical behavior by engineer/owners doing contracting (in the realm of foundation repair companies), but it's more an issue with their selling practice than the business structure.

 

[BrianPetersen]

My opinion and based on local situation (yours may differ): It's design-build. No issue as long as you are designing and constructing your own designs and your client knows the arrangement (i.e. the arrangement is disclosed). It may get dodgy if you get involved in designing projects that are subsequently bid-out for construction; it will get dodgy if you then bid on your own project.

 

[IRstuff]

It may get dodgy if you get involved in designing projects that are subsequently bid-out for construction; it will get dodgy if you then bid on your own project.

In some industries, such as aerospace/defense, you are often barred from bidding on subsequent development contracts, as you might be accused of hiding pertinent information that gives you an unfair advantage later on.

On the flip side, you would potentially have a financial advantage, since you can possibly forego some profit between the two portions, or compensate a loss on the one with a profit on the other.

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[Simba13]

Ok, I just wanted a second opinion. I guess with him owning both companies it felt a little like there was a lack of checks and balances or something. I mean it definitely seems like a good idea in a business sense. I was just curious, thanks for your input

 

[JoshPlumSE]

Let me modify what others have said a little. There is nothing truly unethical about the Engineer of Record owning the construction company. In many ways, this could be BETTER for the client as there is less conflict between engineer and contractor. Less haggling over change orders and such. Hence the efficiency of some Design - Build companies.

That being said, there is no reason why YOU have to feel comfortable with it. If YOU want to get other bids, then you certainly can or should.

 

[SwinnyGG]

I'm not sure a Contractor has those same professional, ethical obligations. It can be a fox-watching-the-henhouse type situation, especially if it's Design Build.

A contractor is licensed, just like a PE- and a contractor bears similar public safety responsibility.

The argument could be made that there are contractors out there who don't take this as seriously as they should- but that's an individual ethical problem, not a problem across the entire profession.

With DB, Every penny squeezed out of the project goes into the Contractor's pocket. This doesn't seem like an Owner/Public first type arrangement, but DB is a very, very common form of project delivery.

This is true in some cases, but not true in others- and in either case, the contractor is ethically bound to provide for public safety. The engineers stamping work for design-build contracts also bear the same ethical burdens they would bear in a different contractual arrangement.

 

[darthsoilsguy2]

There is no ethical problem, you might get asked to provide more of your calculations for review than you might normally do. If the work requires Special Inspections under US building code by the building official, somebody else will need to inspect it.

 

[Ron247]

When I was younger and had an engineering project where the drawings would take longer to draw than it would take me to actually repair the item, I would just contract to do the repair. I designed what I needed and then did the construction work. I never felt it was a conflict of interest. The repairs would have a lot of onesies to draw. for example, 30 minutes to draw and detail something I could actually do in 15 minutes.

As others have stated, Design-Build is a similar concept. I just told the Owners I could do the work at engineering rates for the same cost as me drawing all those drawings at engineering rates and then they still would have to hire a contractor.

 

[r13]

If agreed by the owner of the project, it becomes Design-Build project, there is no ethic issue involved. If not, BrianPeterson and IRstuff stated above is true, you are holding favorable advantages in the bidding process against others.

 

[1503-44]

It might not always be "favorable", if you recognize that the design is more complex than a non-engineer contractor and base your bid on "doing it right".

If an engineer is doing his job properly, there should be no difference in the design he would do for himself, the public, or any client that happens along. Keep that in mind and you won't have a conflict of any kind.

 

[human909]

In either case there are opportunities for ethical issues. But that is life. I see just as many ethical issues with project separation than a complete design an build.

In my experience structural engineers routinely MASSIVELY overdesign things on non design and build projects. In most cases I've dealt with they are getting paid either way and their only risk is in the engineering, so they go excessively conservative. And it costs the client more.

For design and build incentives to engineer economically. Which is great for everybody if they are are competent, ethical and/or have good peer review. Could get yucky for the client if they they are cutting engineering corners to save costs.

I'm currently lead engineer on a decently big design and build our company is doing. We've outsourced the supply and engineering of a few portal frame shed buildings. I keep having to go back to our supplier, saying please try again. Their engineer is using a computer package (Autodesk Robot Structural Analysis) for wind loads that doesn't produce anything even close the the expected uplift loads as required under code.

 

[r13]

1503-44,

I see some problem in your response. Let's stretch the relationship between the design engineer and the contractor a little farther down the road, if through any method, a contractor is able to hook up the design engineer (not through bribe but other means) in a competitive bid, your definition seems to suggest this is a desirable combination (know the specific and do it right) without ethic problem. Sorry, I couldn't agree.

 

[human909]

I don't think it it as clear cut as is being described here by many. Ensuring good ethical behaviour isn't always easy but there are some good approaches. Unknown independent third party reviews are great but can be cumbersome and ensuring all parties have skin in the game.

It may get dodgy if you get involved in designing projects that are subsequently bid-out for construction; it will get dodgy if you then bid on your own project.

This happens all the time in my industry. We are regularly bidding on projects that we designed. I'm not suggesting this makes it 'right' or 'wrong' just it isn't clear cut. There are only so many players in the industry, the businesses with the skills to do the preliminary design are normally the same businesses who can successfully implement the design. Likewise there are disadvantages for the client if those involved in the design can't bid on subsequent contracts as you lose continuity and you lose incentives for good design.

On the flip side I've been involved on projects where we have thrown all the structural drawings supplied in the bin and bid with a completely different structural design and won because the original design was poorly designed with not thought to installation.

 

[r13]

I would highly suspect the unethical practice - over design, under bid. Then water down to make profit, just don't get caught.

 

[gte447f]

There is nothing inherently unethical about this practice. This is actually design-build done the only way that it should be allowed. It is sometimes referred to as designer-led design-build. It is a return to the "master-builder" concept of old. Contractor-led design-build as it is practiced today shouldn't be allowed in my opinion. I have attended a couple of webinar's put on by construction attorneys who advocate designer-led design-build and specialize in structuring engineering firms to do construction. It is on my to do list to someday transition into design build myself, though I may never get around to it.

 

[r13]

Throughout my practice time in the private sector, the companies were usually warn the employees not to discuss the project specific with contractors prior to/during the project bidding, through any means. The only channel available to the contractors is through the written RFI. There were/are quite a few scandals in the government contracts with varies forms of personal relationship though.