A guideline for proper conduct was given to me years ago: You have acted ethically if you would not mind having your actions described in the morning newspaper. I have drawn situations in this article from real-life experiences. They show ways in which you can be challenged to do the right thing and, in some cases, the right thing that will prevent you from violating the law.
Keep in mind that what was a matter of morals yesterday may be a matter of criminal law today. Ask yourself how you would handle these dilemmas or how you would advise another contractor about what to do.
Electrical work on a high-rise building is experiencing lost productivity. The cause of the problem is disjointed efforts by the construction manager (CM) to accelerate the job to overcome delays the CM had created. The CM acknowledges the extra costs but does not want to have the electrical contractor submit a claim that might embarrass him in the owner’s eyes. He proposes to the EC to submit invoices for labor and label them for a large, cost-plus-storage building that the CM is building for the same owner, and he will process the invoices through that job. In this way, the CM says, the owner will not pay more than it should anyway, and the electrical contractor will avoid the potential for the owner rejecting the claim.
The owner’s representative thinks all electrical contractors inflate their prices on changes. He always aims to reduce the change order requests by at least 20 percent, sometimes demanding the markup for overhead and profit be dropped. The EC thinks two can play that game, and it intentionally overstates the price of extras. Nobody is hurt. The owner’s rep feels he is an ace negotiator and got the bargain he deserved, and the EC gets a reasonable price for its work.
Don’t worry about that regulation
For the last several years, the EC has had a number of profitable contracts with the owner of a group of medium-priced motels. The owner has just bought another one to be upgraded, but it is in a state where the electrical is not licensed. The contract is cost-plus, and the specs are pretty much the same ones used on prior motels. The EC tells the owner about the license issue, and the owner says, “Don’t worry about it. I won’t report you.” The EC does some research and learns it will take months to get a license, and the owner will get another contractor if he has to wait that long.
The general contractor’s project manager (PM) is a guy the EC has dealt with before. For each job he has had with that manager, the PM expected something in return for awarding the contract, mostly minor things and some not so minor, but never cash. For example, he has asked for and taken wire and receptacles for his house and has asked the contractor to send some of his crew to his home for electrical work. Allowing the PM these goods and labor keeps the EC on track for the next job. With this goal in mind, the EC has also allowed the PM to use its shop for the PM’s car’s oil changes and maintenance.
A last resort
An old beachfront resort is in dire need of a new service upgrade and electrical wiring repair. Wiring on the roof and in some subpanels are just plain dangerous. The owner hired the EC to inspect, and it prepared a written report with infrared scans of the panels as well as warnings and recommendations. The owner now wants the EC to change the service and the main panels, but not to repair the wiring to the subpanels or make any other needed corrections. If this reduced scope of work went forward, the building would be somewhat less hazardous than it is now, and there is a high probability the electrical inspector would discover the remaining deficiencies and order them fixed.
The owner of a small manufacturing plant has contracted for a general upgrade of equipment, services and parts of the building itself. The owner is not familiar with construction practices, and after a few months, he hires an inspector to do periodic visits and prepare status reports. The EC was having labor problems on the job, knew some of its installations were of marginal quality, and was concerned about the inspections. It turned out that the inspector was of Swedish heritage and so was the EC’s general foreman. They sometimes even conversed in Swedish. The EC’s president owns a house in Sweden and, through his foreman, offered the inspector the use of that house for his next trip to his homeland. The inspector was thrilled and afterwards bypassed any review of the electrical work and noted in his reports that the work was excellent.
An EC was hired by a recent purchaser of an empty warehouse. The EC’s job was to remove and discard all of the old wiring and install new wiring, lighting and receptacles. In an attic space, among junk left by the prior owner, the EC found a decayed cardboard box filled with $30,000 in cash. Obviously, the box had been there a long time. If the contractor kept the cash, no one would ever know. The prior owner is dead, and the new owner never expected anything of value to be found in the building.
In deciding what to do in these situations, was your decision immediate or did you consider pros and cons? Did the possibility of being found out influence your decision? In these examples, did you think what was happening was wrong but just a part of doing business? Were any of the ECs’ actions illegal?