September/October 2017

On Ethics: You Be the Judge
Measuring an Arm’s Length

An outstanding invoice raises questions about independence.

What Do You Think?
Was it ethical for Anne Alfredsson, P.E., to fail to disclose to all parties involved that subcontractor Landon owed her $25,000 in professional fees?

What the Board of Ethical Review Said
As the Board has recognized in earlier decisions, the question of what constitutes an improper inducement that might influence or appear to influence an engineer’s decision is often not an easy question to answer. The answer will be based on a variety of factors—some objective and others more subjective. It is often very difficult to understand the mind of an individual to determine what motivates that person to make or not make certain decisions in their engineering practice. It is essential that an engineer maintain an arm’s-length relationship with contractors, and vendors, having or potentially having contractual arrangements with the engineer’s employer or client. It is often difficult to discern whether a gift or other inducement is an expression of gratitude or an attempt to buy a favor; and it is just as difficult to ascertain the influence a gift may have on the recipient’s disposition to return and/or perpetuate the favor by compromising standards or giving preferential treatment to the giver. The engineer, though, must be mindful of how others may construe the effect a gift would have on the firmness of an arm’s-length relationship.

On several occasions, the NSPE Board of Ethical Review has considered the issue of gifts or inducements that might influence or appear to influence an engineer’s decision making. In this case, based on the language in the NSPE Code of Ethics and earlier BER opinions, it is the Board’s view that Anne Alfredsson, P.E., had an obligation to disclose that subcontractor Landon Inc. owed her $25,000 in professional fees. Alfredsson’s decision to select Zorn Construction and thereby subcontractor Landon raises at least the appearance of a conflict of interest. While the facts in this case are somewhat ambiguous and Alfredsson’s relationship to Landon is somewhat less direct and more remote than the facts in other cases, conflict of interest issues can often be subtle, which makes them prone to the appearance of impropriety. Alfredsson should have discussed the issue with Landon, since Landon was her client. Alfredsson should have disclosed to Sunshine City the outstanding invoice with subcontractor Landon prior to the selection of Zorn Construction. The city would then be on notice and, therefore, could take appropriate actions to mitigate the likelihood of any appearance of a conflict of interest.

Conclusion
It was not ethical for Anne Alfredsson, P.E., to fail to disclose to all parties involved that subcontractor Landon Inc. owed her $25,000 in professional fees.

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

Section II.4.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.

Section III.4.: Engineers shall not disclose, without consent, confidential information concerning the business affairs or technical processes of any present or former client or employer, or public body on which they serve.

Section III.5.: Engineers shall not be influenced in their professional duties by conflicting interests.

For more information, see Case No. 13-5.