Commentary by Eileen Duignan-Woods, P.E.

The scenario isn't realistic. There is a maximum percentage of any principle contractor or consultant that must be subcontracted to a disadvantaged firm. The problem is one of value for a lump sum fee.

The situation described could arise only in the unlikely event that the subconsultant insisted on doing less work than before for the same lump sum set-aside. Frequently, the subconsultant has worked out payment for services in the past with a given prime consultant. On public work, it is easy for a prime to stall payment to a sub for months, or years, with the excuse that payment from the public agency was late and claiming that beaurocracy was at fault.

Serious issues of ethics that often arise in this situation are:

Is it appropriate for a firm to put their own feelings on affirmative action above the law as they seek public work? Should the sub be expected, unaided, to do the same quality of work as the long experienced and well financed prime? Or is the prime supposed to help the sub meet the required standard?
What can be done about the abuse of stalling payment to a disadvantaged sub, since the sub has no leverage outside of legal action and even that is often not permitted on public work---a "no lien" project ?
What standards should be used for deciding what is an reasonable amount of work demanded for a fixed fee?
What recourse is there when a prime mismanages a project and shifts blame to the subconsultant?

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.

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Original Case and BER Judgement
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