Business ethics has been a hot-button issue lately with the fall of corporations like Enron and WorldCom, and a recent survey shows its a concern in the construction industry as well. FMI, in conjunction with the Construction Management Association of America, recently released the results of its Survey of Construction Industry Ethics, in which more than 270 architects, engineers, construction managers, general contractors, and subcontractors gave their thoughts on the ethical state of the industry.
When asked if they had “experienced, encountered, or observed construction industry-related acts or transactions they would consider unethical in the past year,” 84% of respondents answered yes, and 34% said they had experienced unethical acts “many times.” According to 61% of respondents, the construction industry is “tainted” by unethical acts that affect the cost of completing projects. Those respondents estimated that $5,000 to $50,000 for every million dollars in project cost is lost or unaccounted for in some type of unethical transaction.
The top five “most critical issues” selected by respondents were bid shopping, changeorder games, payment games, unreliable contractors, and claims games. More than 90% of respondents said that bid shopping was unethical and 70% found reverse auctions unethical. Even though 85% of respondents thought that there should be an association-enforced industry-wide code of ethics, only 30% agreed that adding regulations concerning ethical behavior is a good idea.