Feasibility Study - Case No. 88-1
Facts:
Engineer A is retained by the county to perform a
feasibility study and make recommendations concerning location
of a new power facility in the county. Two parcels of land
located on a river have been identified by the county as the
"candidates" for facility sites. The first parcel is
undeveloped and owned by an individual who plans to build a
recreational home for his family. The second parcel, owned by
Engineer A, is developed. Engineer A discloses that he is the
owner of the second parcel of land and recommends that the
county build the facility on the undeveloped parcel of land
because (1) it is a better location for the power facility from
an engineering standpoint, and (2) it would be less costly for
the county to acquire. The county did not object to having
Engineer A perform the feasibility study.
Question:
Was it ethical for Engineer A to perform a feasibility study
and make recommendations concerning the location of a new power
facility in the county?
References:
Code of Ethics- Section II.4.a.:"Engineers shall
disclose all known or potential conflicts of interest to their
employers or clients by promptly informing them of any business
association, interest, or other circumstances which could
influence or appear to influence their judgment or the quality
of their services."
Section III.1.b.:"Engineers shall advise their clients
or employers when they believe a project will not be
successful."
Discussion:
The issue of conflict of interest is one of the most widely
discussed and debated in engineering ethics. As a customary
proposition, it is generally recognized as good practice for
engineers to endeavor to avoid conflicts of interest. However,
the language in the NSPE Code of Ethics relating to conflicts
of interest has been significantly modified over the years. For
many years, the NSPE Code contained strict proscriptions
against engineers engaging in conflicts of interest and
admonished engineers, in strong language, to avoid such
conflicts. While the current language still maintains a strong
tone, it is more general than in the past, requiring the
disclosure of conflicts rather than complete avoidance.
The Board has had various occasions to interpret the
language of the Code of Ethics addressing the subject of
conflict of interest. For example, in Case 69-13, the Board
reviewed a situation where an engineer was an officer in an
incorporated consulting engineering firm that was primarily
engaged in civil engineering projects for clients. Early in the
engineer's life, he had acquired a tract of land by
inheritance, which was in an area being developed for
residential and industrial use. The engineer's firm had been
retained to study and recommend a water and sewer system in the
general area of his land interest. The question faced by the
Board under those facts was, "May the engineer ethically design
a water and sewer system in the general area of his land
interest?" The Board ruled that the engineer could not
ethically design the system under those circumstances.
The Board recognized that the issue was a difficult one to
resolve, pointing to the fact that there was no conflict of
interest when the engineer entered his practice. The conflict
developed in the normal course of his practice when it became
apparent that his study and recommendation could lead to the
location of a water and sewer system that might cause a
considerable appreciation in the value of his land depending
upon the exact location of certain system elements in proximity
to his land. The Board stated that while the engineer must make
full disclosure of his personal interest to his client before
proceeding with the project, such disclosure was not enough
under the Code. The Board concluded by saying: "This is a harsh
result, but so long as men are in their motivations somewhat
'lower than angels,' it is a necessary conclusion to achieve
compliance with both the letter and the spirit of the Code of
Ethics. The real test of ethical conduct is not when compliance
with the Code comports with the interest of those it is
intended to govern, but when compliance is adverse to personal
interest."
More recently in Case 85-6, the Board reviewed similar facts
and circumstances and came to a different result. There, an
engineer was retained by the state to perform certain
feasibility studies relating to a possible highway spur. The
state was considering the possibility of constructing the
highway spur through an area that was adjacent to a residential
community in which the engineer's residence was located. After
learning of the proposed location of the spur, the engineer
disclosed to the state the fact that his residential property
might be affected and fully disclosed the potential conflict
with the state. The state did not object to the engineer
performing the work. Engineer A proceeded with his feasibility
study and ultimately recommended that the spur be
constructed.
In ruling that it was not unethical for the engineer to
perform the feasibility study despite the fact that his land
might be affected thereby, the Board noted that the ethical
obligations contained in Section II.4.a. do not require the
engineer to "avoid" any and all situations that may or may not
raise the specter of a conflict of interest. Such an
interpretation of the Code of Ethics, said the Board, would
leave engineers without any real understanding of the ethical
issues nor any guidance as to how to deal with the problem. We
noted that the basic purpose of a code of ethics is to provide
the engineering profession with a better awareness and
understanding of the ethical issues that impact upon the
public. The Board concluded that only through interacting with
the public and clients will engineers be able to comprehend the
true dimensions of ethical issues.
While one can read Case 85-6 and possibly draw the
conclusion that in the instant case Engineer A's conduct was
ethically proper, we do not reach that conclusion. It is our
view that the two cases should be distinguished. In Case 85-6,
the benefit to be derived by the engineer from the construction
of the spur in question was far more remote than the benefit in
the case at hand. The construction of the highway spur
presumably would add to the value of the engineer's residential
property, but it would not impact upon his ownership of the
property. In the instant case, Engineer A is being placed in a
position whereby he is making a recommendation that could
directly affect his and his neighbor's ownership in property.
It is one thing for an engineer to participate in decisions
that will have a tangential impact upon his interests as was
the case in 85-6. It is quite another matter for the engineer
to act in his professional capacity to advise a governmental
entity on policy matters where his economic interests are
directly at issue. We find ourselves in agreement with the
reasoning contained in Case 69-13 which we believe is more
applicable to the facts present here.
We are reminded that Engineer A's professional opinion was
supported by two important public policy considerations. First,
it was noted by Engineer A that the undeveloped parcel was a
better location for a power facility from an engineering
standpoint. Second, it was indicated that the cost to the
county of acquiring the developed property would be higher than
the cost of acquiring the undeveloped tract of land. While
these two considerations are important ones from a public
policy standpoint, and may even be rationalized by a
perfunctory reading of Section III. 1 .b. of the Code of
Ethics, they are not sufficient to justify Engineer A's
decision to perform the feasibility study for the county.
Public perceptions play an important role in engineering
ethics. The facts and circumstances of Engineer A's study may
appear to suggest a benefit to the "common good" if his
recommended course of action is followed. That notwithstanding,
a loss of public confidence may cause a damage that cannot be
easily repaired due to the appearance of impropriety.
The far simpler and more ethical approach which we believe
should have been followed by Engineer A, under the
circumstances in this case, was recommended in Case 69-13 which
states: "(The Engineer) can avoid such a conflict under these
facts either by disposing of his land holdings prior to
undertaking the commission or by declining to perform the
services if it is not feasible or desirable for him to dispose
of his land at the particular time."
Conclusion:*
It was unethical for Engineer A to perform a feasibility
study and make recommendations concerning the location of a new
power facility in the county.
*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:
- Eugene N. Bechamps, P.E.
- Robert J. Haefeli, P.E.
- Robert W. Jarvis, P.E.
- Lindley Manning, P.E.
- Paul E. Pritzker, P.E.
- Harrison Streeter, P.E.
- Herbert G. Koogle, P.E.-L.S., chairman
*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.
1996 NSPE Code of Ethics
This is the version of the code archived in the OEC. An earlier
version may have been used in this case.