Ethics Begins With Integrity

The news today is full of stories of ethics violations in governments and businesses. Transparency International actually publishes a corruption perception index that ranks 178 countries (http://bit.ly/1104_002). It is sad reading.

Engineers tend to think that the comfort of math and technology isolates us from this. However, the automation community is faced with ethical challenges every day, particularly in the area of projects. Owners, contractors and suppliers form a complex triangular relationship on a project. There are multiple bidding processes, change order processes and countless decisions. The challenges go beyond the more publicized areas of bribes and kickbacks. 

Successful projects are based on trust. Things go off the rails when participants put the wrong things first. Profits, schedules and personal advancement must not be the basis for decisions.

Ethics begins with personal integrity. Integrity means treating all participants with fairness and dignity. Leadership sets the tone, but everyone has the responsibility. In my 41 years in the industry, I have seen great projects and horrible ones. Here are some best practices for suppliers, owners and contractors.

• Give everyone the opportunity to make a profit. I am not a fan of reverse auctions for engineering or automation. Automation is less than 10 percent of a project cost and has a huge impact on the performance of a plant. If you beat every last cent out of a bidder, that bidder is going to have to make it up somehow. Treat your bidders with fairness and dignity.  It will pay off.

•  Don’t ask someone to bid if you have absolutely no intention of awarding the contract to that company. Stalking-horse tactics are inherently unfair. Proposals cost hundreds of thousands of dollars.

•  Define a selection methodology ahead of time and stick to it. Communicate the methodology to all participants. The best processes balance up-front costs with other important considerations, such as quality, delivery, reputation and local support. We want a successful project, so past performance should count for something.

• Close the process once bids are received. Let the bidders do their selling before the bid, and NO selling after the bid. Go radio silent, except to ask clarifying questions.

• Agree on balanced terms and conditions. I have seen many attempts to force bidders to adhere to very unbalanced terms. The lawyers love to shove all liability on someone else. Is it really fair for a bidder to have to cover someone else’s negligence? Huge amounts of energy are wasted arguing over terms. Best practices today call for a set of pre-negotiated terms that are then used over and over again.

• Help each other solve problems. Owners, contractors and suppliers each have unique knowledge that can be applied to solving problems.  Trust each other and it will go a long way.

• Give the same information to all parties. Each party is entitled to be on a level playing field.

• If you are a bidder, bid the right thing for the project. Point out specification errors.

• Reward and celebrate ethical behavior and deal with ethics violations swiftly and sternly. If your company does not have an ethics hot line, it should.

A final thought here is that this subject is not discussed enough. It should be a part of management communication, Webcasts and meetings.  Expectations should be very clear. Also, there should be help and support available so that someone who is confronted with an unclear choice will make the right one.  Remember that the goal is successful projects and a healthy and vigorous automation industry.

John Berra, setpoint.johnberra@gmail.com, recently retired as Chairman of Emerson Process Management, Austin, Texas.

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