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ASCE Removes “Supplanting” Language from Code of Ethics

Mar 1, 2007

As described in last month's column, in 1972 the U.S. Department of Justice began legal proceedings against ASCE on the charge that the provision in its Code of Ethics pertaining to price competition violated federal antitrust laws. To settle that claim, ASCE signed a consent agreement in which the Society removed the provision in question from its code and formally announced that participating in price bidding for engineering services was not unethical. Unfortunately, ASCE's brush with federal antitrust laws would not end with that agreement.


In September 1976 the Board of Direction voted to remove the revised canon 3 entirely from the Code of Ethics. In its place, it inserted canon 5, which remains in the code to this day and reads as follows: "Engineers shall build their professional reputation on the merit of their services and shall not compete unfairly with others."


One year after the consent decree described in last month's column was signed, ASCE's Committee on Professional Conduct (CPC) began an investigation of two ASCE members for violating canon 3 of the Code of Ethics. This canon, adopted in 1914 as part of ASCE's original code, read as follows: "It shall be considered unprofessional and inconsistent with honorable and dignified conduct and contrary to the public interest for any member ... [t]o attempt to supplant another engineer in a particular engagement after definite steps have been taken toward his employment."

The two members were officers of a Boston-based design firm, and the ethics complaint related to actions taken by that firm in securing a five-year water services construction contract in Thailand. Bangkok's Metropolitan Water Works Authority (MWWA) had received roughly 50 proposals for the project, including one from the Boston firm, but it had selected another U.S. design firm. Some six months into contract negotiations between that U.S. design firm and the MWWA, the Boston firm, in partnership with a Thai engineering firm, submitted a second, unsolicited bid for the project. Subsequently, theMWWA informed the U.S. firm that was initially selected that its bid was too high, and it awarded the contract to the Boston-Thai partnership.

The CPC found that the Boston firm's "late intrusion" into the negotiating process violated canon 3 of the Code of Ethics. It voted to suspend the two members, who served as the Boston firm's president and vice president, for respectively two and three years. ASCE's Board of Direction approved this recommendation, and notice of the suspensions, along with the members' names, was published in the March 1975 issue of  Civil Engineering.   


In April of that year, the U.S. Department of Justice (DOJ) responded to a complaint that two of ASCE's members had been disciplined for submitting a price quotation. Upon investigation, the DOJ determined that ASCE's actions had violated the terms of the consent agreement wherein ASCE had agreed to refrain from "adopting any plan, program, or course of action which prohibits members ... from at any time submitting price quotations for engineering services."

The DOJ filed a motion in the U.S. district court in New York asking the court to find the Society in civil contempt for violating the terms of its 1972 consent agreement. ASCE objected to the motion, stating that its revision to canon 3 of its Code of Ethics was not intended to suppress price bidding but rather to prevent interference from another engineer when a client had made its selection and begun the establishment of a professional relationship. Moreover, ASCE noted that the revision had been in place at the time of the 1972 agreement and that the DOJ had raised no objection to it at that time.

The DOJ countered that it did not object to the revision on its face but to the fact that ASCE had used it to punish two members who had done "no more than submit price information while negotiations were being conducted by another member." Thus, the DOJ argued, ASCE's interpretation and enforcement of the provision constituted another attempt by the Society to suppress price competition, in violation of the terms of their earlier agreement.

The district court agreed with the DOJ, finding ASCE in contempt and ordering the Society to reinstate the two Boston officers as members in good standing and to publish notice in  Civil Engineering  that their suspension had been in violation of the 1972 consent agreement. Furthermore, ASCE was ordered to refrain from applying canon 3 of its Code of Ethics in such a manner as to "directly or indirectly inhibit ... the submission of price quotations or other pricing information."

© ASCE, ASCE News, March, 2007

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.