There are ways to combat unethical practices

It's clear that an estimator's duties are not simple, but no one should take the easy route and submit to ethical violations. Unfortunately, the egregious corporate examples over the last few years have provided a sort of sanctuary to some of the most damaging violators. The damages may not be as high, but ethical violations in the construction industry can cause fiscal and personal damage of considerable concern.

Many veterans in the industry have disastrous stories about being victimized by a lack of ethics that they may never live down. A recent survey published by the Construction Management Association of America and FMI, a firm that does construction management, includes some hard figures proving that estimators and contractors are not neurotic after all.

The survey's figures, disclosed in a July 2004 EC&M article, encapsulated the answers provided by close to 300 respondents comprising general contractors, subcontractors and other segments of the industry. It is not surprising that most respondents agreed that the industry ethics violations cause considerable consequences, such as financial losses and lost labor.

In the profession as a whole, estimators are often victims of these unscrupulous operators. I recall a case when a contractor asked me to stop by and discuss my bid on a major mall job. The contractor's representative, by no means a small operator, wanted me to lower my bid. When I pointed out that he had my best price, he pulled out a bid confirmation from a competitor with a price lower than mine. It wasn't until I saw the signature and the current date of the bid that it became clear that he was trying to pull a fast one. The bid was signed by a competitor whose funeral I attended just a month prior. I suggested he contact that firm, pulled my bid and never submitted another one to that firm again.

Bid shopping is one of the greatest labor problems in the construction industry. The cost in time, labor and personnel may not be a readily available statistic, but anyone who has been a victim of this practice can attest to the net effect. There's even an expression-having your price nailed to the post office wall, where wanted posters are found-which highlights the prevalence of the practice.

There are general contractors out there who provide bidding information, but who really don't have a company, operate out of rented post office box and may even rent an executive office space with secretarial help. These people will cast their net far and wide for any and all bids, put a price together and make a bid. If they succeed, they most likely will sub out the whole job, as they have neither the skills nor the personnel to handle most of the jobs on which they bid. This is why I tell students that in most cases bidding these types of jobs is an exercise in futility. Instead, spend your valuable time cultivating reliable customers.

Bid depositories were established to bring some ethics to the bidding process. A depository would set a deadline; bids had to be submitted at least 24 hours prior to the deadline. This meant that well worked-up estimates had at least an equal chance of actually being chosen. The system worked well for a number of years until it was undermined by greedy contractors and subcontractors. The net effect was that legitimate ethical contractors are the losers.

Some sort of viable defense is needed against these practices. The methods used may vary, but the net effect is to mute unscrupulous contractors. In my company, we kept a no-bid list whose inhabitants were those that cost us time, money and aggravation. Another method is to obviously shape your prices so that the no-goodniks don't get a decent price to peddle. Keep in mind that there is no law stating that you must submit the same price to each and every contractor asking you for a bid. Don't let anyone tell you otherwise, or better yet challenge them to show you those laws, they obviously can't.

As shown by your typical NECA member, ethical contracting is very possible and profitable-if ethics are applied throughout the industry-be it the installers, suppliers or the people for which you want to work. EC

DAVID is a professor of electrical technology at Long Beach (Calif.) City College, a consultant and an expert witness. He can be reached at 562.597.1877 or at edavid@lbcc.cc.ca.us.