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Ethics For Constructors: The Difference Between a Contract and Ethical Issue

A common gray area in the construction industry is determining when to speak up about an issue that is not outlined in the construction contract. The conditions of the contract for construction work will clearly state your company’s responsibilities, but sometimes there is overlap where your team will discover an issue with something unrelated to the project.

For example, your company may have been awarded a limited amount of scope for a project, but while in the process of providing the services, your team observes a problem area that is outside of the project scope. Should you speak up? Should you ignore it? Who do you tell?

Let’s review a real-world example of ethics in construction to further understand the differences between a contract issue and an ethical issue. We’ll also take a look at how to handle this type of situation if it arises for your team.

Example of an Ethical Issue Related to the Conditions of the Contract for Construction

Ethics in Construction Situation: In this example, we will review a situation where your firm has been retained to assess discharge from an industrial plant. The issue is that the county sewage authority’s effluent discharge has not met the set permit limits over the last few months. Now, your firm has been retained to determine what chemicals can be added to bring the discharge into permit parameters.

While sampling the discharge, your team notices that various pieces of treatment equipment are in disrepair and outdated. Upon review, your team believes that this is the reason for the permit violations. However, this analysis falls outside of the project scope. Should your firm report the findings to the public owner or should you stay within the contract parameters and just make recommendations about chemical use? Is this a contract issue or an ethical issue?

Ethics in Construction Answer: Ethical and legal issues often go hand in hand. Sometimes they also conflict. In this situation, your firm has a specific contractual obligation to uphold. Your primary focus is to provide the recommendations you have agreed to provide. However, you also face an ethical obligation to the owner.

It’s your duty to let the owner know about other conditions you see that may be affecting the plant, especially if those conditions may negate the effectiveness of your recommendations or represent a danger to others. If you fail to report potentially dangerous conditions because of limited contract obligations, your firm may be sued for failing to report the condition. More importantly, remaining silent constitutes unethical behavior.

We believe the ideal course of action to satisfy your contractual and ethical obligations is to (a) present the findings that fall within your project scope and (b) alert the owner to the equipment issues that your team observed.

Find Support Navigating Ethical Situations in Construction

The conditions of the contract for construction project work provide critical guidance about what work is to be completed. However, the contract does not cancel out your ethical responsibility to look out for the owner if other issues appear while performing the contracted duties.

It’s important for constructors to speak up instead of back down from a difficult challenge. That’s why we built a community of construction professionals who can provide insights into how to handle these types of difficult situations.

To learn more about ethical issues that you may encounter in the construction industry, we invite you to become an AIC member. You will gain valuable knowledge from other construction professionals who have been in your same position working through contractual and ethical responsibilities.

– We also encourage you to subscribe to the AIC email newsletter. Drop your name and email address in the sign-up box at the bottom of this page to start receiving information about construction ethics directly to your inbox. We’re here to help you grow in your role.

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