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Article About Ethical Issues in Civil Engineering

PURPOSE OF STUDY

 To learn more about Ethical issues concerning civil engineering.

 To give us a better knowledge Ethical issues concerning civil engineering.
 To sites article about ethical issues concerning civil engineering.

Ethical Issues in Construction Industry

Introduction

Ethics is very hard to define and it should have a definition understandable or relevant to more
than a few, as in philosophical ethics (Fewings, 2009).The ethical behavior of a person is very
hard to determine. This is because ethics are subjective matters. A person cannot judge the other
person whether he followed the ethics codes or he has the ethical behavior in himself. Essentially
ethics are actions that exceed a legal compliance (Fewings, 2009). According to Fewings (2009),
many philosophers have sought to clarify the position of morality and ethics and have come up
with many theories on the difference of emphasis between the concepts of good or right.

Abdul Rahman et al (2010) said that the adoption of ethical principles and the enforcement of
standards become matters of increasing importance to society as the number of professions and
professionals increase and the work environment becomes more ethically sensitive because the
credibility of the entire profession is endangered when there are lapses in occurrence of ethical
behavior. Based on the survey that had been carried out by a philosopher, it shows that more than
90% of an organization have made ethics and ethical behavior as one of their top issues.

Ethics involves in every sector in the world. This can be seen in many business schools which
they have altered their ethics curricula by increasing the number of courses available that address
ethics, ethical decision-making and social responsibility, and have made them requirements
rather than electives (Velthouse et al, 2007). However, there is widespread agreement that just a
code of ethics is not enough to assure ethical corporate behavior(Velthouse et al, 2007). This is
because not all of the workers will follow the code of ethics as human behavior is very subjective
to be explored of.

Definition of Ethical Issues

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Ethics is related to conflict of interest. Conflict of interest is the conflict where a single person
has obligations to more than one party to the contract, or there is a clash of private or commercial
interests with a person’s public position of trust (Fewings, 2009). Thus ethical dilemmas will
occur. An ethical dilemma generally applies in order to choose between two or more imperfect
talternatives which the outcomes literally will affect people in different ways ,thus, there is a
need to apply some discretion and judgement based on experience and on past precedent and
criteria used. Usually, ethical dilemmas happened due to different people see the
irresponsibilities differently. Fewings (2009) state that it is defined as managerial, business and
professional issues which are complex due to the conflicting impacts that decisions have on
stakeholders. As for professional, they have an additional responsibility to support their
profession which willhave conflict with their client and employer. Each person will hold a set of
personal ethics which influences their judgement between different options and stakeholders
(Fewings, 2009). For instance, they might see a client’s instruction for air conditioning as an
unsustainable solution and wish to design a more naturally ventilated building to save carbon
emissions (Fewings, 2009).

Typical of Ethical Issues

1. Planning Issues

Planning authorities are set up locally or centrally as a means of providing fair and just allocation
of land use and building permit (Fewings, 2009). The main ethical dilemma is that they have to
be fair, not specifically to any conflicting demands between applicants who might be in
competition, but need to consider objections from third parties fairly and to consider the overall
sustainability of the community. Fewings (2009) said, this is not necessarily represented
corporately, except by a single councilor who may not be on the committee or may be excluded
because of conflict of interest. Apart from that, according to Abdul Rahmanet al (2010), there are
supporting regulatory bodies whose function is to inspect and to ensure that specialist installation
confirms to standards set upby building by laws. The main public agencies of developing
countries are encouraged to enforce existing laws and procedures and to set a standard code of
ethics.

2. Property development and Management Issues

In property field, the dilemmas occur is taken as motivation factors for them to make out money
out of the buying, selling and renting of property so that shareholders are satisfied. The
temptation for a developer is to make a building attractive to buy, but not to build in durability as
this is more expensive and less relevant if he is going to sell the building off in a relatively short
time (Fewings, 2009). This generate an ethical dilemma which signify the developers needs to
balance up his needs for profits against the desire to be seen as a careful and reputable developer
who provides great value for money and a reliable building. In selling matters, the first dilemmas
occurs is whereby a client’s wish to sell a property at a maximum price and the professional duty
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to disclose information which the client may not reveal, where one suspects a problem exists.
There is also a responsibility to give a fair price and not just the price the client would like to sell
at (Fewings, 2009). Secondly, dilemma connected with confidentiality and what you can tell to
the buyer in answer to directquestions and what is confidential to the client. You are anxious not
to alienate the buyer (Fewings, 2009). Thus, it is clearly unethical to advise one on the offer of
the other, but what does the property agent do if their client asks them to favour one person over
the other, and persuades them to raise the offer because they see the higher priced buyer as
someone they do not wish to sell the property to. As for renting part, the dilemma is to give the
tenant a fair rental which reasonable with the services provides in the rental property. So that the
rental value is worth and the tenant gets the best value of the rental.

3. Designer’s Issues

The architects and engineers have their own design techniques. Both of them hold the trust of
their client for the appropriateness and the safety of the design. The ethical dilemmas are not
about the codes, but the services which the client receives. It is quite possible too that innovative
engineering and architectural designs are not covered by the codes and so a greater responsibility
is put upon the designer in reassuring the client (Fewings,2009). But, a designer could be over-
protective of their name at the risk of value or cost (Fewings, 2009) as they need to keep their
reputation as well. For the building and designing professions, the incalculable value of human
life demands nothing less than the highest moral considerations from those who might risk it
otherwise (Smyth et al, 2010; Mason, 1998). According to Fewings (2009), one of the ethical
dilemmas is providing economical solution without compromising the design. Designers need to
appreciate client’s value and has a responsibility to society as a whole for the integration of the
building into the community and, in case of a public building, maximizing the spending power of
the tax payer’s money (Fewings, 2009). Vice verse, designer also must put forward more
economical option to the client to get the design through the approval stages.

4. Construction Issues

Contractors’ moral dilemmas resolve around their need to competitively bid for and win work
which is sustainably profitable, and the responsibility to provide a good quality budget which is
within the budget they promised the client (Fewings, 2009). Generally, it is a rule that
construction projects must be completed within the planned cost, scheduled time and required
quality (Abdul Rahman et al, 2010). Almost all of the profession has its codes of ethics to
provide a framework for arriving at good ethical choices. The construction industry is a perfect
environment for ethical dilemmas, with its low-price mentality, fierce competition, and paper-
thin margin (FMI, 2006).The detailed explained of construction dilemmas will be explained later
on.
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Construction Industry’s Ethical Issues

1. Under bidding and Bid Cutting

According to Kerzner (2006) in Soo et al (2010), the Construction clients’ objective of awarding

a contract is to agree upon a contract type and price that produces reasonable risk and maximizes
the incentive for efficient and economic performance of a contractor. Thus, automatically client
will find the contract with best bargain. So et al (2010) states that descending first-price sealed-
bid auctions are most commonly used in the industry where competing contractors submit
independent bids (i.e., offers to sell construction services) and the lowest bidder wins at the
lowest bid price. Drew et al (1992) giving their ideas that the competitive bidding is the driving
force for contractors providing lower bid prices to suit the clients' construction and financial
needs. Thus, each contractor must know how to tackle clients’ needs in order to get into the
contract. Different bidders apply different markup policies which may be variable or fixed (Drew
et al, 1992). Thus, it does not mean that the higher the price of bid, will win the contract. It might
be vice verse. Failure to take control of the bidding exercise may end up in under bidding by
contractors, which will eventually affect the quality of the end product delivered to end users
(Abdul Rahman et al, 2010). This is especially prevalent in public projects where contractors and
suppliers with lowest tender bid are often awarded with the tender.

2. Bribery and Corruption

Corruption undermines citizen trust in the political system, its institution and leadership; in
essence, it corrodes and damages the social fabric of society (Unee, 2010). According to de Jong
et al (2009), the construction industry has been identified as the most corrupt sector in the world.
This indicate that construction industry already have a negative perceptions from other sector
with bribery and corruption thingy. In South Africa Construction Industry for instance, Shakantu
(2006) claims that corruption occurs at all participants’ levels and in all phases of construction
projects, noting also that the impacts of corruption extend beyond the industry itself. Corruption
as distinguished by the Chartered Institute of Building (CIOB,2006), drawing on opinions and
experiences of the construction, engineering, surveying, architecture, facilities management and
legal fraternities, reported on corruption in the UK construction industry. Corruption and bribery
can be simplified as the wrong manners of using one’s power or authority. This can be explained
that, corruption gives bad impact in construction industry and among the professionals. In
Bowen et al (2010) research findings, it shows that most of respondents thought of involvement
of corruption comes from the professionals consultants and followed by contractor supply chain.
Most of the form of corruption comes from appointment and tender irregularities and as well as
contract administration and closeout irregularities. As for the main factors that contribute to
corruption, the respondents said that it comes from poor standards of ethics.

3. Negligence
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“Negligence is a term that has been a source of confusion to both the public and the courts. It can
be used to describe behaviour that is careless lack of acceptable conduct; or it can be used to
refer tort that sustains an action for negligence. The tort of negligence consists of three elements,
only one of which refers to acceptable careless conduct on the party of the defendant” stated by
Plannet (1995).For construction industry, an architect or engineer who is negligence in design a
structure or in otherwise giving advice in the context of building operation is liable in tort, as
well as in contract to his clients, for any loss or damage so caused (Buckley, 1993)

4. Frontloading

According to BusinessDictionary.com (n.d), front end loading can be defined as a practice in

which the bulk of fees on or payments from, a service or job are charged up-front or during the
beginning phase, whether or not earned which in some cases it could be considered a fraud.
Oregon Department of Transportation Construction Manual (2009), state that frontload happened
due to the contractor wanted to get more money at the beginning of the project by overpricing
the Work done early in the project. This is done by overpricing bid items the Bidder believes will
be used in greater quantities than estimated and under pricing items that will be used in
significantly lesser quantities as stated by Oregon Department of Transportation Construction
Manual (2010). There is a case of frontloading which is Matter of River port Industries, 64Comp.
Gen. 441 (1985). “The comptroller General held that if the bid is front loaded, regardless if it is
the lowest bid, it "should be viewed as materially unbalanced since acceptance of the bid would
result in the same evils as an advance payment. An advance payment is prohibited by law." The
"frontloading" may also be materially unbalanced due to the cost of money that must be paid out
early versus over the normal construction of the project” (Heinz, 1988).

5. Collusion

According to Oxford Advanced Learner’s Dictionary (2008), it states that collusion is a secret

agreement especially in order to do something dishonest or trick people. Bowen et al (2007),
state that collusion is contrary to the principles of free competition. Bowen et al (2007) adds
some more that, it benefits only the parties to the collusive agreement at the expense of those not
privy to the arrangement. Sheldon (1982), had discovered the collusion in United Kingdom. He
holds that tendering may be conducted a priority through collusive agreements because such
agreements are ‘an attractive means of maintaining a steady flow of work and achieving higher
joint, risk- adjusted, discounted profits’. As for Lee (1990) in Bowen et al (2007), he investigated
collusion in the US highway construction industry, and found that it causes a reduction in the
number of available builders, an increase in the average bid price, and are duction in bid
variance. This could lead to artificially increased building prices, quality compromise, company
failures through unfair competition, a negative industry image, and decreased employee
productivity through moral dissatisfaction (Bowen et al, 2007). As for Zarkada-Fraser and
Skitmore (2000) in Bowen et al (2007), from the economic perspective, collusion corrodes the
basis and attacks the rationale of the competitive tendering systems by restricting competition.
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6. Conflict of Interest

Conflict of interest is the conflict for a single person who has obligations to more than one party
to the contract or the clash of private or commercial interest with a person’s public position of
trust (Fewings, 2009). Bowen et al (2010) claims that conflict of interest and unethical conduct,
while not mentioned in the earlier UNDP definition, or in the subsequent broader interpretation,
should also be regarded as lying on the continuum of corrupt activity, since they involve seeking
personal gain at the unfair disadvantage of others. Bowen et al (2010), distinguished that conflict
of interest is a situation in which someone in a position of trust, such as lawyer, politician, or an
executive or director of a corporation, has competing professional or personal interests which
could make it difficult to fulfill his or her duties impartially. Bowen et al (2010) add that even if
there is no evidence of improper action, a conflict of interest can create an appearance of
impropriety that can undermine confidence in the ability of that person to act properly in
his/her position. The responsibility should be defined clearly and placed upon individuals to
declare all possible instances of potential negative interpretation, before proceeding with the
projects.

7. Fraud

Fraud is some form of corruption. The common forms of corruption involved in procurement
process stated by the Danish Ministry of Foreign Affairs (2006) in Bowen et al (2007) are:

Bid–rigging, Collusion by bidders, Fraudulent bids, Fraud in contract performance,

Fraud in an audit inquiry, Product substitution,
Defective pricing or parts, Falsification/misrepresentation of costs, Bribery, Acceptance of
gratuities, Misuse of government funds, Travel fraud.

8. Dishonesty and Unfairness Conduct

The concept of dishonesty lies at the heart of most property offences and is a matter of fact for
juries to determine in criminal cases (Smith, 2002). The Commonwealth Criminal Code Act
1995 in Smith (2002) defines dishonest as:

a) Dishonest according to the standards of ordinary people; and b) Known by the defendant to be

dishonest according to the standards of ordinary people (s.130.3). In addition, the respondents in
Vee et al (2003), mention of theft of materials by the site foreman, bias in favour of the client by
consultants even if the client is at fault, “catch all clauses” in contracts and the tendency of some
large organizations to “bully” smaller organizations out of work. That shows that dishonesty
happened from the top position of construction professionals to the bottom of the position, but
mostly dishonesty and unfairness conduct usually by client.

9. Cover pricing
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Bid rigging or collusive tendering is the manner in which competitors conspire to effectively
raise prices where customers buy goods and/or services through soliciting competing bids
(Khumalo et al, n.d). The implementation of a bid rigging scheme may involve a number of
strategies including bid suppression, bid rotation and cover pricing, among others Khumalo et al
(n.d) in their article. The most strategies used in construction industry is cover pricing. Even
though cover pricing is a common practice in the construction industry, the practice and its
anticompetitive effects are not well understood by not only the participants in this market but
by the public in general. According to Khumalo et al (n.d), cover pricing takes place when bidder
A submits a price that is not intended to win the contract they are bidding for. This price is a
price that would have been agreed upon between bidder A and bidder B who wishes to win the
contract. According to the OECD (2009) in Khumalo et al (n.d).

10. Compensation of tendering cost

The costs of tendering are a recognized expense which many would argue represent a large
proportion of general overhead costs (Ray et al, 1999).There is an uncertainty where the costs of
tendering shall be underlie under whose responsibilities, whether under the principal itself or for
the tenderers themselves. According to Ray et al (1999), if principals have to reimburse
tenderers, it is possible that tenderers could find some way of making a profit by obtaining an
over-reimbursement by, say, surreptitiously producing quick, cheap and deliberately
uncompetitive tenders, termed non-bona fide tenders. He states that, whether or not a tender
is bona fide can be difficult to know especially in selective tendering.

11. Hidden fees and Commissioning

According to BusinessDictionary.com, hidden fees means expense, not normally included in the
purchase, the price of an equipment or machine, such as for maintenance, supplies, training and
upgrades. Forehand (2009) defined hidden fees as cost shifting where it is an accidental or
deliberate misstatement in a contractor’s job cost system that can have a substantial impact on
the contractor’s balance sheet and income statement. Cost shifting will caused the hidden fees
aroused. This is because cost shifting can cause the materials misstatement to give effect to
contractor’s financial statement and end up by charging the contractor with a serious charge.
When looking at the negative or unethical side, the cost shifting can jeopardize the contractor’s
ethics when it involves moving or misdirecting job costs from unprofitable job to a profitable
job. Usually this ethics problem occur when, Forehand (2009), field level managers attempt to
manipulate contract profitability. There are various possibilities for the contractor to charge the
hidden fees without the client’s knowledge. Clients should check first before he agreed with the
certain contract.
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12. Withdrawal of Tender

Withdrawal means the act of moving or taking something away or back from the Oxford
Advanced Learner’s Dictionary. This means one of parties in the construction contract, had
withdrawal from the agreement. What makes it unethical is that the reasons of the withdrawal.
Basically, the tenderers have the rights to withdraw by Australia firm where there is a firm offer
before the closing of the tenders and a formal acceptance of that price is made .This is to
accommodate tenderers’ late discovery of (Ray et al, 1999);

 a) A major miscalculation b) Lack of interest c) Lack of technical expertise However, the reason

of withdrawal become unethical is when it opens to abuse by tenderers when faced with the
prospect of another, more lucrative, contract. According to Ray et al (1999), in order to avoid
over- commitment, or just in greed, contractors in this may seek to withdraw the tender for the
less lucrative contract. Ray et al (1999) said, if this practice was widespread, the principal could
end up in the position of receiving no competitive tenders and thereby delaying the start of the
contract until further tenders have been solicited.

13. Change order game

In Project Management terms, change order is meant by a component of the change management
process whereby changes in the Scope of Work agreed to by the owner, contractor and architect
or engineer are implemented (Wikipedia, 2013).Contractors have, for years been accused of
unethical behavior when it came to “Change Orders” and ultimately in issues of “Safety”
(Scalza, 2008). This usually comes in the form of cheating on the value or necessity of the
change order and sometimes leads to a less safe condition than that which was originally
intended as stated by Scalza (2008). This means, the change order is made intentionally to gain
some hidden profit for the contractor itself and it is already being planned at the beginning of the
contract.

Example of Ethical Conduct in Construction Industry

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About six years ago, Public Works and Highways Secretary Rogelio Babes Singson
was being grilled in a budget hearing at the House of Representatives why his
department has been slow in the implementation of infrastructure projects all over the
country. At the time Singson was defending before the House committee on
appropriations the proposed budget of the DPWH for 2013.   

At the House public hearing, Singson admitted in frustration that the DPWH “ the
chief state agency in charge of construction projects of the government “ has a
shallow bench of qualified civil engineers.

Queried about the lack of qualified engineers in the agency, Singson cited the DPWH
cannot provide salaries comparable to those in the private sector. Thus, Singson tried
to impress upon the lawmakers the need to upgrade and professionalize the ranks of
the DPWH. In this way, he argued, this would allow him to perform his management
role.

Pressed by congressmen at the budget hearing in 2012 why not instead promote civil
engineers who are already employed at the DPWH, Singson retorted: Wala hong
makapasa (sa exam), paano ba naman yan (no one passes the exam, what can we do)?

He was referring to the agency set of 200-question examination required for takers to
pass promotion. The examinees are given three hours to answer the questions. That
should be ample time, or about a minute per question.
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The DPWH administers this pre-qualifying examinations covering technical,
analytical and management engineering topics. Singson said takers of this exam must
at least answer 100 items correctly. They should pass the technical, stock knowledge,
and analytical items. œIf I still have to teach them about the technical terms, they can
go and look for job somewhere else, Singson pointed out.

That`s why, the DPWH secretary sought to justify his increased budget request to
cover higher pay to hire civil engineers if only to get the best and qualified
professionals to do the job at most efficient cost to the government.

Singson disclosed the DPWH offers good entry-level salaries of P24,000 to P26,000
for licensed civil engineers. Singson expressed preference to hire honor graduates of
engineering courses, especially civil engineering. Incidentally, Singson is an industrial
engineer by profession.

To address the agency`s issues on unqualified government engineers, Singson told the
congressmen that the DPWH was about to launch a cadetship program in the search to
hire honor graduates.

Fast forward. While doing daily news monitoring, a Malacaang photo release caught
my interest. It showed President Aquino, along with Singson, formally welcoming the
first batch of 40 graduates of this Cadet Engineering Program.

The photo caption stated: DPWH implemented its first Cadet Engineering Program in
partnership with First Pacific Leadership Academy (FPLA) to set new entry standards
for civil engineers in the bureaucracy. The President is flanked by Public Works
Secretary Rogelio Singson and Roy Evalle, executive director of First Pacific
Leadership Academy.

From what I gathered, out of the first batch of 40 graduates of this Cadet Engineering
Program of the DPWH, eight of them graduated with honors and 27 had a rating of
above 85 percent when they passed the civil engineering licensure examination of the
Professional Regulation Commission.

As announced by the DPWH in February last year, it contracted the FPLA to design
and conduct the Philippine governments very first Cadet Engineering Program (CEP).

Billed as the countrys first dedicated corporate university, the FPLA is connected with
the Metro Pacific Group headed by one of the countrys top business leaders Manny V.
Pangilinan.
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The CEP is an extensive 26-week induction course focusing on the development of
technical and professional competencies of new civil engineers who aspire to start
their careers in DPWH. During the six and a half months of training, cadet civil
engineers went through classroom studies,

immersion in the bureaus, services, regional and district offices to make them well-
rounded and competent members of the organization.

Integral parts of the program, according to FPLA, also included field exposures,
values formation, leadership and professional image enhancement workshops, and a
host of enrichment activities that familiarized the cadet engineers with the
departments structure, processes, facilities, personnel and culture. Every facet of the
program targets to facilitate the Cadets understanding of public service as a career and
as a commitment which fosters personal integrity very much needed in a line of work
that is beset with ethical challenges.

We are proud and honored to do this for DPWH. We believe that by harnessing the
talents and skills of a young generation of leaders, we are helping build our nation.
We will ensure that the best practices of FPLA cascade to the government sector via
the DPWH, Evalle was quoted saying.

The CEP program, as initiated by Singson, vowed to push the advocacy of

transformation and innovation in governance he started since he assumed stewardship
of the DPWH. Guided by the need to fill executive positions in the years to come even
after the term of this incumbent administration, it should become Singson`s legacy to
lay the foundation to raise a new breed of

young, committed, and empowered civil engineers who will drive positive change in
the organization.

The graduation of the first batch of cadet engineers should augur well for the
remaining term of office of President Benigno Noy Aquino III. The entry into the
bureaucracy of these cadet engineers should pick up the pace for many government
infrastructure projects that have remained in the pipeline under the Aquino flagship
Public-Private Partnership (PPP).

Without any doubt, President Aquino must accept the fact his administration is in
catch-up mode to start and complete his flagship projects hopefully before the end of
his term in June 2016.

The very keen interest of congressmen on the budget and capability of the DPWH to
deliver and complete infrastructure projects is but natural and should not be a surprise.
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When Singson promised to hire more qualified and competent civil engineers to work
in the government, it was during deliberations of the proposed 2013 budget when both
the Senate and the House still hold sway over their annual, multi-million pork barrel 
allocations under the so-called Priority Development Assistance Fund (PDAF). This is
not to mention the congressional insertions by each and every senator and
congressman into the annual budgets of various government agencies such as the
DPWH.

But due to the mounting public sentiment against the alleged P10-billion pork barrel
scam, President Aquino was forced to recast the PDAF allocations totally different
from how these were utilized before. As approved last year in the 16th Congress,
senators and congressmen can however still identify their choice projects in each
implementing agency of government, including public works under the 2014 DPWH
budget.

Under its Congress-approved program of expenditures, the DPWH infrastructure

projects for the year are set to create more than half a million employment. Singson
committed for the DPWH to generate 536,523 jobs under the Community-Based
Employment Program (CBEP). This is another priority program of the Aquino
administration aimed at providing short-term employment to skilled, semi-skilled, and
low-skilled workers in the community.

The DPWH secretary last week reminded private contractors to comply with Republic
Act No. 6685 that requires them to hire at least 50 percent of the unskilled and 30
percent of the skilled labor requirements from the available bona fide residents in
which the projects are to be taken. At least 15 infrastructure projects of the DPWH are
currently ongoing all over Metro Manila, which account for the bulk of the country`s
jobless ranks.

Other than lack of qualified civil engineers of the DPWH, many of these infrastructure
projects under the PPP have languished in the pipeline for quite some time. The
causes of delay range from

the usual bureaucratic troubles like bidding wars, right-of-way claims, to court
litigation, red tape, among others.

So with a fresh team of civil engineers now being sent into action by the DPWH
secretary “ though as they call it in basketball in the last two minutes of the game â“
how they perform will spell the boom, or doom, of P-Noys infrastructure legacy.
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References:

 https://www.academia.edu/25990002/Unethical_Dilemmas_of_Construction_Professionals_in_
Construction_Stage?
fbclid=IwAR09D82q1TLHWtXKHDn4zJe1fkVgM5OIr2QHMhtzb8Gow5zI2RJc9NVh-WA
 https://blog.capterra.com/construction-fraud-stories/
 https://www.tandfonline.com/doi/abs/10.1080/01446190701225707?fbclid=IwAR1CJWV_v-
B9gXqUprIWF87e2jr-VFXrrg99qj91eQVN-OXGyrAE9GyUFMY&src=recsys&journalCode=rcme20
 https://www.philstar.com/opinion/2014/03/31/1307048/boom-or-doom
 https://www.rappler.com/nation/190997-rogelio-singson-dpwh-senate-hearing-right-of-way-
scam
 http://www.gmanews.tv.com.ph
