Page 22 - PCCA Journal 1st Quarter 2012

Basic HTML Version

PCCA Journal|1
st
Quarter 2012
22
integrity chain, of being unethical, can build up quickly.
Several firms stated that they cannot afford to not have an
ethics program in place as both public and private owners are
looking deeply at the reputation of bidders. “Do owners care?”
Mark House, chief human resources officer at Beck Group,
asked. “Yes. With the transparency of internet and newspa-
pers, ethics are being reported on and paid attention to.”
In a similar vein, Norm Holly, vice president of Kiewit
Corporation, said, “It’s not profitable to be unethical. While
our safety program has a significant cost associated with it,
you can’t afford to have an unsafe project. Neither can we af-
ford to have other than the highest degree of ethics, whatever
the cost. Many owners are now going through more than
a simple bidding process; they evaluate all aspects of our
company and our reputation. Operating within the highest of
ethical standards is not only the right way, but is sound busi-
ness practice.”
Many firms consider an effective ethics program crucial to
their long-term survival. “It’s the right time in our industry
for this to take off and take hold,” said Larry Cochran, vice
president of quality and compliance at Kiewit. “It’s ever more
challenging, but it’s absolutely the right thing to do and part
of our sustainability in the long-term.”
As firms look to joint ventures (JVs), strategic partner-
ships, and new clients to increase their backlog, integrity is
coming to the fore. “Questionable ethical practices used to
be far more prevalent than they are today,” said Tripp Ahern,
president and CEO of J.F. Ahern Co. “I think other businesses
have become more serious about the code of ethics within
their firms.” Dom Servedio argued that ethics are especially
important for culture and business at STV. “We rely a lot on
JVs, and we have a diverse business, so we have to rely on
customers, and it’s a small world.”
Improving the Image of the Industry
Spearheaded by Norm Holly and Mike Futch and with the
support of the AGC, the CIECI was formally launched in April
2008, following a series of meetings and telephone confer-
ences among legal counsel at several large firms. Formed in
advance of, and independent to, the 2008 amendments to the
FAR, the CIECI was primarily concerned with improving the
image of the construction industry at large and investigating
the way ethics and compliance issues fleck through opera-
tions and corporate governance. These leaders and others in
the industry have recognized the importance of ethical issues
for the continuance and success of their respective firms.
They began their programs with no industry standard to refer
to, locating resources within their own companies and build-
ing the rest from scratch. Their experiences will help others,
and their work is setting the bar for standards of ethics pro-
grams in the design and construction industry.
“This isn’t just an issue of compliance,” said FMI Senior
Consultant Andrew Patron. “The industry is being incentiv-
ized to enrich its culture, to maximize operational efficiency
and to develop the current generation into the ethical, in-
formed leaders of tomorrow.” Those interviewed agreed that
Ethics Programs
Continued from page 19
C
ontractors turning to
federal contracts for
work will discover what
many of the contractors
we interviewed already
know: there are many regulations with
which to comply. The FAR document
runs to 1,979 pages. Successful bidders
on projects over $5 million must have
a code of business ethics and conduct
in place within 30 days of receipt of the
award. That code must be available to
all employees performing the contract,
and the contractor must exercise “due
diligence to prevent and detect criminal
conduct.” The contractor must “other-
wise promote an organizational culture
that encourages ethical conduct and a
commitment to compliance with the
law.” Specifically, ethics and compliance
programs must:
Establish standards and procedures to
prevent and discover wrongdoing,
Provide for periodic risk assessments,
Ensure corrective measures are car-
ried out,
Promote periodic communication and
awareness of the ethics code,
Provide an effective training program
for ethics education, and
Provide and advertise an anonymous
hotline for reporting breaches of
conduct.
It is nearly impossible to establish an
acceptable program within the 30-day
and 90-day windows provided in the
FAR, and guidelines do little to instruct
firms on how to go about establishing
and enforcing ethics programs. The pen-
alties for violating federal code either
under civil or criminal circumstances
are steep, including fines, debarment
from federal contracts, and imprison-
ment. However, an established, effec-
tive ethics program provides a strong
defense against undetected incidents
of unethical behavior and can reduce
company liability to nil.
Ethics Goes FAR in Federal Contracting