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Engineers Collude To Suppress Competition on Government Contracts

Situation

The Committee on Professional Conduct (cpc) received notification that an asce member had been indicted for mail fraud, making false statements, and violating section 1 of the Sherman Antitrust Act. Newspaper accounts of the indictment stated that the member had been part of a "combination and conspiracy to suppress and eliminate competitors on construction projects" for the U.S. Army Corps of Engineers.

The asce member, along with other persons named in the indictment, was alleged to have participated in meetings to discuss upcoming jobs in six Corps of Engineers districts. At the meetings, the participants exchanged information on bid amounts for the projects and decided which of them would have the lowest bid on a particular job. The participants would withhold bids or submit inflated bids on projects for which they had not been designated the lowest bidder, and the bid documents submitted contained false statements supporting the inflated amounts.

In a plea bargain arrangement with the Department of Justice, the asce member pleaded guilty to one count of a Sherman Antitrust Act violation and three counts of mail fraud. In exchange for his testimony against the other defendants, the member received an $18,000 fine and a three-year prison sentence, which was suspended on the condition that he perform two years of community service.

Question

Did the engineer's actions in colluding with other engineers to suppress competition on Corps of Engineers bid proposals violate asce's Code of Ethics?

Decision

This case was brought before the cpc prior to the most recent changes to the Code of Ethics; however, for the purpose of this discussion the current code provisions will be cited.

Canon 6 of the code reads as follows: "Engineers shall act in such a manner as to uphold and enhance the honor, integrity, and dignity of the engineering profession and shall act with zero tolerance for bribery, fraud, and corruption." The guidelines to practice under that canon provide further that "[e]ngineers shall not knowingly engage in business or professional practices of a fraudulent, dishonest, or unethical nature."

The cpc obtained a copy of the indictment from the U.S. district court and reviewed the member's testimony at trial as a witness against the other defendants. After interviewing the asce member and reviewing the facts of the case, the cpc decided that the member's actions had violated canon 6. The committee voted to recommend to the Board of Direction that the member be suspended from asce for two years and that an account of the disciplinary action be published in an official publication of the Society without the member's name.

Under subsection 3.0.8 of the Society's rules of policy and procedure, in instances where evidence of an ethics violation has been found, a member may consent in writing to a disciplinary action (other than expulsion) recommended by the cpc. In so doing, the member is deemed to have waived the right to a full hearing and admitted the facts of the case, provided that the Executive Committee agrees with the recommended disciplinary action. If the Executive Committee votes for stronger disciplinary action, the consent and admission are negated, and the member has the right to mount a defense in a subsequent hearing.

The cpc notified the asce member of its recommendations and proposed that he accept the proposed two-year suspension and publication of the violation without his name being cited. The member agreed, and the Executive Committee voted to accept the cpc's recommended disciplinary action.

Members who have an ethics question or would like to file a complaint with the cpc may call asce's hotline at (703) 295-6061 or (800) 548-asce (2723), extension 6061. The attorneys staffing this line can provide advice on how to handle an ethics issue or file a complaint. Please note that individual facts and circumstances vary from case to case and that the general summary information contained in these case studies is not to be construed as a precedent binding upon the Society. 

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