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.

 

[human909]

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.

If you are at that point on the scale you are likely already neck deep in a world of unethical behaviour and measures are attempted to be put in place to limit it or stamp it out! That goes beyond engineering ethics and simply into corruption and cronyism.

But different sectors run differently. Big builds involving big bureaucracy are wide open for corruption and cronyism. Most of the players and decision makers aren't paying the bills or bearing the costs so anything to line their own pockets is great. You need all sorts of checks and balances to try to limit this corruption.

In other cases where the clients and the suppliers routinely work together and both parties involved are bearing the cost pretty directly there is less opportunity or incentive for corruption.

But this is more political economics than engineering

 

[r13]

human909,

If you are at that point on the scale you are likely already neck deep in a world of unethical behaviour and measures are attempted to be put in place to limit it or stamp it out!

Sorry my poor reading capability. I don't quite understand that means.

 

[dik]

Check with legal... you could be exposed more than a conventional contractor.

Rather than think climate change and the corona virus as science, think of it as the wrath of God. Feel any better?

-Dik

 

[1503-44]

r13, First part, or 2nd part?

First part: it could go either way.

2nd Part. I have worked by "design and build it right, like its your own baby, for over 40yrs" in almost as many countries, including more than one or two, or three of the World Bank's "Most Corrupt Countries List", and I have never had one single suggestion or doubt expressed by anyone in the food chain that something might have gone wrong with that philosophy. In fact ... I've had many suggestions to the contrary.

 

[OHIOMatt]

I think the design-build concept is going to be scrutinized in the coming year. The two most highly publicized structural failures over the last couple years have both been design-build type projects. Of course I am referring to the FIU Bridge Collapse and the Hard Rock Hotel Collapse. In my opinion, design-build by nature creates a conflict of interest. The design professional's contract is typically held by the general contractor.

With the FIU bridge, those of us that have followed it know that severe cracking was evident and the road below should have been closed while the bridge was shored. Closing the road and installing shoring was going to be extremely time consuming and expensive. In addition, there would be serious reputational damage to the contractor. In the actual scenario, the design-build team was responsible for these costs directly. Did the relationship between contractor and engineer skew the advice of the engineer, even subconsciously? While, I do not have the facts, I challenge anyone to listen to the voicemail from the EOR to the DOT and look at the cracks to see if the statements made match the conditions in the field. Then ask yourself the question, why is there a disconnect?

 

[r13]

The design professional's contract is typically held by the general contractor.

In my experience, "YES".

Did the relationship between contractor and engineer skew the advice of the engineer, even subconsciously? (Red is my edition)

In my experience, the engineer had little voice, but expected to provide drawings and stamp. It got worse in the construction stage.

 

[gte447f]

OhioMatt, I agree with all of what you have said regarding design-build led by general contractors, as is typically practiced these days. I personally don't think that general contractors should be allowed to advertise, sell, and subcontract engineering services. We, as engineers, don't let other unlicensed parties offer engineering services; I don't know why we have allowed general contractors to be the sole exception to this rule other than architects. However, the OP was asking about a scenario where the engineer of record also performs construction, or designer-led design-build, which, in my opinion, is less likely to be derailed by profit seeking over ethics, and is a vast improvement over contractor-led design-build, although all processes can be corrupted by corrupt individuals, so no process is foolproof. What do you think of designer-led design-build as posed by the OP?

 

[JLNJ]

If there were no conflicts of interest then the Contractor could perform the Special Inspections himself.

The inherent conflict of interest seems pretty self-evident to me.

 

[JoshPlumSE]

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.

I'd say it differently.... In non-design build jobs, you (as someone who hires the engineer) have to balance engineering cost, engineering efficiency and speed of design. So many times, clients want the engineering as cheap as possible as fast as possible. When this happens the result is an overdesigned structure.

When the engineer is part of a design build operation, you can get more efficiency in the operation because the contractor / engineering relationship is very tight. You're unlikely to get last minute cost saving suggestions from the contractor because those were handled during the conceptual design process.

 

[1503-44]

In petroleum design-construct contracts the owner will retain an independent engineering consultant to oversee the contractor's engineering work. Any conflicts raised by the owner's engineer are resolved in due course.

 

[IRstuff]

I forgot to mention that design-build is actually the norm in defense, and we often are willing to take a loss on the design, hoping to make it back on the production. As a general rule, we try to avoid losses on the front end, as there may never be a production contract. Case in point is Future Combat Systems (FCS) wherein billions were promised in production, but the long-term war on terrorism ate into the defense budget and focus shifted away from combat systems for fighting conventional wars. Now, 10 years later, focus has shifted back.

Of course, defense system development contracts typically involve designing something totally new, so codes, etc., that might apply in structural or civil don't apply, and we design to complement our production capabilities, including the capabilities of our subs. A competitor potentially can come up with a totally different design concept, based on their and their subs' capabilities, so whoever has a "golden nugget" might have a more powerful, or less expensive, or lighter, system

TTFN (ta ta for now)
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[Tomfh]

In my opinion, design-build by nature creates a conflict of interest. The design professional's contract is typically held by the general contractor.

He who pays the piper calls the tune.

 

[human909]

Interesting viewpoints expressed here.

I suppose some of the disagreement come whether you think engineers as internal designers or external 'umpires'.

I see design and build as the ALIGNMENT of interest regarding the design and construction. However nothing will save you from unethical, incompetent or engineers unable to stand up to management pressure.

Manufacturing, automotive and aerospace have excellent examples of success design and build and also failures. (737MAX)

Peer reviews and better empowerment of engineers can help prevent this. But again examples abound of mistakes (FAA should have been a 'peer' review.)

Design and build isn't going anywhere.

 

[HTURKAK]

I think there is no single answer to this question and IMO, if there is a conflict of interest, it is not ethic . This issue also depends on country practice, sector, public or private investment , scale of the contract etc...

Some examples from my past experience,

In oil and gas sector , design-construct contracts (EPC ) are common . But the client provides FEED ( front end engineering documents ) and the scope and BOQ of the contract eventually just varies in 5% range .Moreover, the client retain an engineering consultant for the contractor's engineering work or may ask validation of design documents from a third party .

In private investment, the client again provide at least preliminary design documents and may ask validation of the construction design drawings and calculation report from a third party.

For public investment projects , the authority provides at least basic design sometimes construction permit drawings (in German genehmigungsplanung ) and the contractor prepares construction drawings and calculations.

Nowadays another type of contract is, Open Book Estimate. The contractor prepares the design documents for the substantial portion up to say 70% and prepares the BOQ cost to complete analysis. The client pays the cost of study and is free to bid the detailed design works and construction works to another company.

We shall look also the past failures and ask what went wrong .. IMO, if the conflict of interest is an issue , the contactor and design engineer should not be the same entity. Consider a court, is it ethic and acceptable that the judge is also prosecutor ?..

 

[OHIOMatt]

As mentioned by gte447f I did not answer the original post. In an engineer led design build team, we may have less actual conflict of interest, but not zero. While on a very small scale project that is specifically mentioned such as adding a header, there is little chance of significant problem. The issue is, where is the point that the project is large enough for this to be a concern?

As an engineer, I want to avoid actual conflicts of interest and the appearance of conflicts of interest.

I have seen several references to automotive, aerospace and defense listed. The big difference is, that in those industries you have significant over site by outside organizations and government agencies. You do not have that level of scrutiny in the building industry. Many times it is the professional of record that makes decisions on what is acceptable or monitors construction.

 

[structuralCADspecialist]

I'll vote for less conflict of interest.

Plus, having a contractor with solid structural engineering knowledge... that's who I'd prefer to work with personally.

Conflict of interest definitely exists. But much less than the traditional delivery method of hiring a consultant. I've worked for four different consulting offices and, let's say, the average level of ethics and morals was in about the same territory as that of used car sales. I don't doubt for a second that the firms I worked for are below average and that the typical ethics of the average poster here is much much higher. But the nature of the consulting world lends itself to both cutting costs and corners and simply hoping things work out on the other end. In my jurisdiction I've seen consulting firms get away with quite a bit, even after making the 6 o'clock news. For those shaking their heads note that I work in multi-residential almost exclusively. People working in other sectors would be a little surprised at what goes on.

If the contractor/engineer has designed something wrong (and gets caught) he (or she) bears the full brunt. I've seen situations where a contractor/consultant have split the damages 50/50 (plus minus) either by settling out of court or by a judges decision. To me it seems that the contractor/engineer has more at stake - there's nobody to share the blame with. Many structural failures are hard to pinpoint. A forensic engineer has to dig through a pile of rubble: Was there rebar missing? A bad concrete pour?. Also, worth noting is how inspections are carried out: a structural consultant typically won't be held liable for 'missing' something unless it's glaringly obvious. They simply look for general conformity and that's really about it. The 'inspector' can simply be an agent appearing 'on behalf' of the consultant (usually their newest EIT). Imagine how fun it is to try and convince a rebar worker that they are missing steel after the engineer 'passed' their work. Even a very diligent and experienced engineer can miss stuff. They've been staring at a computer screen all day. I'd prefer more control in the contractor's hands. And likewise, more accountability. Having a qualified and competent engineer on the team allows them to do just that.

I want to try to convince one of the larger, self-bonding construction outfits in my city to create their own engineering department. I feel like it would be much more efficient. The consultant firms in my area have created a business environment that has them overworking/underpaying their staff. And their staff often seems detached from the real-world details of the project itself. I can see many ways to improve on this. In my delusional dream world this would also lead to better paying jobs.

 

[SwinnyGG]

I have seen several references to automotive, aerospace and defense listed. The big difference is, that in those industries you have significant over site by outside organizations and government agencies. You do not have that level of scrutiny in the building industry. Many times it is the professional of record that makes decisions on what is acceptable or monitors construction.

I have worked in all three of these engineering fields, and now work in construction- and I can tell you that the government oversight on a construction project where the government is the client has an overwhelmingly higher level of oversight than anything happening in the automotive world.

Oversight in automotive and aerospace is not that intense. Regulation and oversight are not the same thing.