Value Engineering
Code Citations: [12(a)] [12(b)]
Case Citations: NONE
A government agency entered into a contract with an engineering firm to design a facility. Following completion of the design, bids were received from contractors for the construction, and a contract was entered into with the low bidder. The construction contract contained a value engineering clause to the effect that the contractor could submit to the contracting officer of the government agency suggested changes in the plans or specifications for the purpose of reducing the cost. The suggested changes would be submitted by the contracting officer (Engineer "B") to the Engineer ('C") for comment, following which the contracting officer would make the decision whether to approve the suggested changes, in whole or in part. The saving resulting from approved changes would be divided equally between the contractor and the government.
Engineer "'A", employed by the contractor, proposed a change in the plans and specifications in accord with the value engineering clause. His employer transmitted the proposed change to Engineer "B", the contracting officer. He submitted the proposed change to Engineer "C", a principal in the design engineer firm. Engineer "C" recommended that the change not be approved and further objected that the actions of Engineers "A" and "B" were unethical.
Was it unethical for Engineer "A" and Engineer "B" to present, review, or approve changes in engineering designs prepared by Engineer "C"?
The review of the plans and specifications prepared by the engineering firm by Engineers "A" and "B" were within the permissible scope of Code 12(b), as in both cases their activities were required by their employment duties under the terms of the construction contract. Each was acting for his respective employer.
A different question would arise if the government agency had retained a second firm in private practice to review the work of the design firm. In that case Code 12(a) requires that such review not be performed without the knowledge of the design firm. While we are not faced with this precise question in this case, we note that value engineering clauses are now being uniformly inserted in construction contracts issued by some Federal agencies and by some state agencies. The use of such clauses has been widely publicized to the engineering profession and where used are in accordance with agency regulations, which are public documents. Accordingly, we express the view for future guidance that engineers in private practice have constructive knowledge of the existence and use of value engineering clauses. It becomes incumbent upon engineers in private practice, who may not wish to be subject to value engineering arrangements of the type described, to check with the governmental (or private) agency or organization to determine if a value engineering clause will be used in the construction contract in order to decide whether the design engineer is willing to accept the engineering engagement on that basis. Failure to do so will remove any later objection by the engineer on ethical grounds that his work was reviewed by another engineer in private practice without his knowledge.
It was not unethical for Engineer "A" and Engineer "B" to present, review, or approve changes in the engineering designs prepared by the design engineering firm, "C".
*Note-This opinion is based on data submitted to the Board of Ethical Review and does not necessarily represent all of the pertinent facts when applied to a specific case. This opinion is for educational purposes only and should not be construed as expressing any opinion on the ethics of specific individuals. This opinion may be reprinted without further permission, provided that this statement is included before or after the text of the case.
BOARD OF ETHICAL
REVIEW CASE REPORTS
The Board of Ethical Review was established to provide service to the membership of the NSPE by rendering impartial opinions pertaining to the interpretation of the NSPE code of ethics.
BOARD OF ETHICAL REVIEW
Frank H. Bridgers, P.E., T. C. Cooke, P.E., James Hallett, P.E., C. C. Hallvik, P.E., Kurt F. Wendt, P.E., Sherman Smith, P.E., N. O. Saulter, P.E, Chairman.
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