My husband wants to give several architects and public school construction capital projects reps a cash gift as a thank you for past opportunities in allowing our company to bid as we transitioned from residential to commercial work.
I keep telling him that this will look bad. He is sincere about wanting to say thank you and is not trying to get anything in the future by doing this. I worry that they will misunderstand his intent (or worry that others may find out), even though he will accompany it with a thank you note. Is this even legal? Don't we have to send a 1099 if we give a gift? I am so confused, but I am not winning this argument. He is determined to show his appreciation and keeps saying that "everyone loves to get money" and "no one turns down a cash gift". He lives in a dream world where he thinks that you can do something like this and that there will be no negative repercussions.
I answered this in your other post in the old thread. Here it is again:
Whether it's legal for your husband to do this depends on a variety of factors, such as whether there is any federal funding on any of these projects (in which case it's absolutely illegal and a federal crime), the state and local laws where these projects are located, policies of the school districts and funding agencies, etc. In any case if the architects were to accept these "gifts" they would be violating the statutes of many states, so risking their own licenses. Similarly most "public school construction capital projects reps" would be risking their jobs by accepting cash gifts, even if they happen to be in some rare state/county/municipality where this isn't technically illegal. Your husband should consult an attorney.
In addition to that advice, I'd suggest that you change your user name so you're not identifying yourself on a public forum (and your husband by association.)
Jan 9, 20 11:14 am ·
·
b3tadine[sutures]
Exactly, he can give to his heart's content, it's the party accepting the gift that is in the very least on the hook for legal and ethical complications.
Agreed it looks bad, even if it doesn't happen to be technically illegal for the applicable project/location. It looks like a kickback and/or a bribe to continue to make opportunities available to your husband's company. It's going to suggest that your husband is either dishonest or that he doesn't understand business norms.
We typically receive lots of token holiday gifts from "well-wishing" consultants and contractors - i.e. plates of cookies and bottles of wine. Your husband would not be out of line going that route (and maybe he could still do it now as a "Happy New Year" thing.) That sort of thing is usually fine, except in some federal-contracting firms where accepting anything at all is strictly forbidden. But many architecture firms have policies that make it a fireable offense to personally accept anything worth over $20 or so (i.e. coffee mugs and other corporate swag are ok, but expensive tickets to anything are not.)
Technically any business gift of over $25 in value is supposed to be treated as taxable income, though I doubt a lot of firms are declaring boxes of chocolate and plates of pastries.
Everything about the OP's situation sounds really sleazy, even if genuinely well-meaning. It looks like a kickback no matter how you cut it (its literally a monetary 'thank-you' for getting us work).
We get the standard chocolate boxes, etc. at Christmas from our consultants; i dont think we would want to get anything else realistically. Even booze would be non-standard.
So you don't know of architects who accept the cash and just hope no one will say anything? He seems to think that this happens every day. Maybe he watches too many movies....
Jan 9, 20 5:57 pm ·
·
Non Sequitur
How much cash?
Jan 9, 20 5:59 pm ·
·
Flatfish
Sure, there might be architects accepting kickbacks. If there are, they're certainly not going to talk about it - and I can't imagine that if they are doing this that they'd accept something as trackable as a check in a thank you card (let alone being 1099'd for it) !!
In most states it's illegal for a licensed architect to accept any money in association with a project, unless they disclose to their client that they're doing that (because it creates multiple financial interests in the project, which may be in conflict with the client's best interests.) Even if the architect does disclose it to their client, it's usually illegal anyway on any sort of publicly-funded project, and would get the architect black-listed from future projects with that funding authority if it was discovered that they had done this. Our insurers advise us not to even allow a contractor to pick up our share of a dinner tab, lest it be perceived by anyone as a kickback, bribe, or conflict of interest.
These are projects bid on by architects first through the city or county or school system. Then, in turn, the city/county/school offers the project for bid to GCs, with the architect already in place. Sometimes, the architect is given freedom to bid it out on his own (usually through the school projects), and we have been invited to bid, even though we did not have the experience in commercial work yet. They took a chance on us and let us bid and participate, and now we have finally established ourselves in the local industry over the years. But, this is intended to be an acknowledgement of the fact that they were willing to allow us to bid as the "new guy" and are appreciative of the opportunity. I agree with all that is being said, but I can't convince my husband that his genuine desire to show thanks can't be done the way he envisions. He thinks it's a simple gesture and does not see why it's a bad thing, especially since I can't find any proof that it's agains the AIA code to accept a gift. If I had it in writing, he might be more likely to back off. HELP! I don't want him in a compromised position, nor do I want him to make an architect uncomfortable and strain future relations by giving a gift that will be refused....and then cause future awkwardness.
How about capital projects leaders in the school system? He wants to give them gifts too. Assume this is "government funded" work - taxpayer bond money - etc. Where can I find IN WRITING that they are not permitted to accept a cash gift?
Jan 9, 20 9:24 pm ·
·
Flatfish
Your state's association of school boards can provide the written policies for school employees, trustees, contracted project managers, etc. Your state's architectural licensing statutes provide the language specific to architects. It was apparent what state you are in when you were using your real name, but I don't want to provide links here as you have gone anonymous now.
CANON II Obligations to the Public Members should embrace the spirit and letter of the law governing their professional affairs and should promote and serve the public interest in their personal and professional activities.
E.S. 2.1 Conduct:
Members should uphold the law in the conduct of their professional activities.
Rule 2.101
Members shall not, in the conduct of their professional practice, knowingly violate the law.
Rule 2.103
Members serving in a public
capacity shall not accept
payments or gifts which are
intended to influence their
judgment.
This is explicitly illegal in your state, for the public school projects you're describing. Public school districts and boards are considered "governmental agencies".
It's a misdemeanor on the part of the gift-giver, but would make your company ineligible for consideration for future projects. As several others have noted, it could have more serious consequences for the architects or officials that accept these gifts.
§ 133-32. Gifts and favors regulated.
(a) It shall be unlawful for any contractor, subcontractor, or supplier who:
(1) Has a contract with a governmental agency; or
(2) Has performed under such a contract within the past year; or
(3) Anticipates bidding on such a contract in the future
to make gifts or to give favors to any officer or employee of a governmental agency who is charged with the duty of:
(1) Preparing plans, specifications, or estimates for public contract; or
(2) Awarding or administering public contracts; or
(3) Inspecting or supervising construction.
It shall also be unlawful for any officer or employee of a governmental agency who is charged with the duty of:
(1) Preparing plans, specifications, or estimates for public contracts; or
(2) Awarding or administering public contracts; or
(3) Inspecting or supervising construction
willfully to receive or accept any such gift or favor.
(b) A violation of subsection (a) shall be a Class 1 misdemeanor.
(c) Gifts or favors made unlawful by this section shall not be allowed as a deduction for North Carolina tax purposes by any contractor, subcontractor or supplier or officers or employees thereof.
(d) This section is not intended to prevent a gift a public servant would be permitted to accept under G.S. 163A-212, or the gift and receipt of honorariums for participating in meetings, advertising items or souvenirs of nominal value, or meals furnished at banquets. This section is not intended to prevent any contractor, subcontractor, or supplier from making donations to professional organizations to defray meeting expenses where governmental employees are members of such professional organizations, nor is it intended to prevent governmental employees who are members of professional organizations from participation in all scheduled meeting functions available to all members of the professional organization attending the meeting. This section is also not intended to prohibit customary gifts or favors between employees or officers and their friends and relatives or the friends and relatives of their spouses, minor children, or members of their household where it is clear that it is that relationship rather than the business of the individual concerned which is the motivating factor for the gift or favor. However, all such gifts knowingly made or received are required to be reported by the donee to the agency head if the gifts are made by a contractor, subcontractor, or supplier doing business directly or indirectly with the governmental agency employing the recipient of such a gift. (1981, c. 764, s. 1; 1987, c. 399, s. 1; 1993, c. 539, s. 970; 1994, Ex. Sess., c. 24, s. 14(c); 2007-348, s. 18.)
One of the definitions of Unprofessional Conduct is ...accepting any compensation or reward except from registrant's clients, any of which would reasonably appear to compromise registrant's professional judgment in serving the best interest of clients or public...
Jan 9, 20 10:45 pm ·
·
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Can a GC give a cash gift to an architect as a thank you?
My husband wants to give several architects and public school construction capital projects reps a cash gift as a thank you for past opportunities in allowing our company to bid as we transitioned from residential to commercial work.
I keep telling him that this will look bad. He is sincere about wanting to say thank you and is not trying to get anything in the future by doing this. I worry that they will misunderstand his intent (or worry that others may find out), even though he will accompany it with a thank you note. Is this even legal? Don't we have to send a 1099 if we give a gift? I am so confused, but I am not winning this argument. He is determined to show his appreciation and keeps saying that "everyone loves to get money" and "no one turns down a cash gift". He lives in a dream world where he thinks that you can do something like this and that there will be no negative repercussions.
Can anyone comment?
I answered this in your other post in the old thread. Here it is again:
Whether it's legal for your husband to do this depends on a variety of
factors, such as whether there is any federal funding on any of these
projects (in which case it's absolutely illegal and a federal crime),
the state and local laws where these projects are located, policies of
the school districts and funding agencies, etc. In any case if the
architects were to accept these "gifts" they would be violating the
statutes of many states, so risking their own licenses. Similarly most
"public school construction capital projects reps" would be risking
their jobs by accepting cash gifts, even if they happen to be in some
rare state/county/municipality where this isn't technically illegal.
Your husband should consult an attorney.
In addition to that advice, I'd suggest that you change your user name so you're not identifying yourself on a public forum (and your husband by association.)
Exactly, he can give to his heart's content, it's the party accepting the gift that is in the very least on the hook for legal and ethical complications.
This looks bad, might even be illegal depending on location.
Agreed it looks bad, even if it doesn't happen to be technically illegal for the applicable project/location. It looks like a kickback and/or a bribe to continue to make opportunities available to your husband's company. It's going to suggest that your husband is either dishonest or that he doesn't understand business norms.
We typically receive lots of token holiday gifts from "well-wishing" consultants and contractors - i.e. plates of cookies and bottles of wine. Your husband would not be out of line going that route (and maybe he could still do it now as a "Happy New Year" thing.) That sort of thing is usually fine, except in some federal-contracting firms where accepting anything at all is strictly forbidden. But many architecture firms have policies that make it a fireable offense to personally accept anything worth over $20 or so (i.e. coffee mugs and other corporate swag are ok, but expensive tickets to anything are not.)
Technically any business gift of over $25 in value is supposed to be treated as taxable income, though I doubt a lot of firms are declaring boxes of chocolate and plates of pastries.
i got a logo'ed two stage waiter's corkscrew from a GC once
pretty decent swag item that we actually use & i'm guessing wasn't a huge cost to the GC
I got a bottle of maple syrup from one of my GC. great gift.
I got a burberry scarf from a client, and a giant hand painted Chinese egg
I would proudly display that egg at my desk
It’s actually in my kitchen...proudly displayed
I expect nothing less.
Everything about the OP's situation sounds really sleazy, even if genuinely well-meaning. It looks like a kickback no matter how you cut it (its literally a monetary 'thank-you' for getting us work).
We get the standard chocolate boxes, etc. at Christmas from our consultants; i dont think we would want to get anything else realistically. Even booze would be non-standard.
Don't get the huge baskets though filled with partially-full boxes of sweets. Take a page out of the Halloween playbook and give full-size candies.
So you don't know of architects who accept the cash and just hope no one will say anything? He seems to think that this happens every day. Maybe he watches too many movies....
How much cash?
Sure, there might be architects accepting kickbacks. If there are, they're certainly not going to talk about it - and I can't imagine that if they are doing this that they'd accept something as trackable as a check in a thank you card (let alone being 1099'd for it) !!
In most states it's illegal for a licensed architect to accept any money in association with a project, unless they disclose to their client that they're doing that (because it creates multiple financial interests in the project, which may be in conflict with the client's best interests.) Even if the architect does disclose it to their client, it's usually illegal anyway on any sort of publicly-funded project, and would get the architect black-listed from future projects with that funding authority if it was discovered that they had done this. Our insurers advise us not to even allow a contractor to pick up our share of a dinner tab, lest it be perceived by anyone as a kickback, bribe, or conflict of interest.
“Referral fees”.
.
These are projects bid on by architects first through the city or county or school system. Then, in turn, the city/county/school offers the project for bid to GCs, with the architect already in place. Sometimes, the architect is given freedom to bid it out on his own (usually through the school projects), and we have been invited to bid, even though we did not have the experience in commercial work yet. They took a chance on us and let us bid and participate, and now we have finally established ourselves in the local industry over the years. But, this is intended to be an acknowledgement of the fact that they were willing to allow us to bid as the "new guy" and are appreciative of the opportunity. I agree with all that is being said, but I can't convince my husband that his genuine desire to show thanks can't be done the way he envisions. He thinks it's a simple gesture and does not see why it's a bad thing, especially since I can't find any proof that it's agains the AIA code to accept a gift. If I had it in writing, he might be more likely to back off. HELP! I don't want him in a compromised position, nor do I want him to make an architect uncomfortable and strain future relations by giving a gift that will be refused....and then cause future awkwardness.
How about capital projects leaders in the school system? He wants to give them gifts too. Assume this is "government funded" work - taxpayer bond money - etc. Where can I find IN WRITING that they are not permitted to accept a cash gift?
Your state's association of school boards can provide the written policies for school employees, trustees, contracted project managers, etc. Your state's architectural licensing statutes provide the language specific to architects. It was apparent what state you are in when you were using your real name, but I don't want to provide links here as you have gone anonymous now.
CANON II
Obligations to the Public
Members should embrace the spirit
and letter of the law governing their
professional affairs and should promote
and serve the public interest in their
personal and professional activities.
E.S. 2.1 Conduct:
Members should uphold the law in the conduct of their professional
activities.
Rule 2.101
Members shall not, in the conduct of their professional practice,
knowingly violate the law.
Rule 2.103
Members serving in a public capacity shall not accept payments or gifts which are intended to influence their judgment.
AIA
This is explicitly illegal in your state, for the public school projects you're describing. Public school districts and boards are considered "governmental agencies".
It's a misdemeanor on the part of the gift-giver, but would make your company ineligible for consideration for future projects. As several others have noted, it could have more serious consequences for the architects or officials that accept these gifts.
§ 133-32. Gifts and favors regulated.
(a) It shall be unlawful for any contractor, subcontractor, or supplier who:
(1) Has a contract with a governmental agency; or
(2) Has performed under such a contract within the past year; or
(3) Anticipates bidding on such a contract in the future
to make gifts or to give favors to any officer or employee of a governmental agency who is charged with the duty of:
(1) Preparing plans, specifications, or estimates for public contract; or
(2) Awarding or administering public contracts; or
(3) Inspecting or supervising construction.
It shall also be unlawful for any officer or employee of a governmental agency who is charged with the duty of:
(1) Preparing plans, specifications, or estimates for public contracts; or
(2) Awarding or administering public contracts; or
(3) Inspecting or supervising construction
willfully to receive or accept any such gift or favor.
(b) A violation of subsection (a) shall be a Class 1 misdemeanor.
(c) Gifts or favors made unlawful by this section shall not be allowed as a deduction for North Carolina tax purposes by any contractor, subcontractor or supplier or officers or employees thereof.
(d) This section is not intended to prevent a gift a public servant would be permitted to accept under G.S. 163A-212, or the gift and receipt of honorariums for participating in meetings, advertising items or souvenirs of nominal value, or meals furnished at banquets. This section is not intended to prevent any contractor, subcontractor, or supplier from making donations to professional organizations to defray meeting expenses where governmental employees are members of such professional organizations, nor is it intended to prevent governmental employees who are members of professional organizations from participation in all scheduled meeting functions available to all members of the professional organization attending the meeting. This section is also not intended to prohibit customary gifts or favors between employees or officers and their friends and relatives or the friends and relatives of their spouses, minor children, or members of their household where it is clear that it is that relationship rather than the business of the individual concerned which is the motivating factor for the gift or favor. However, all such gifts knowingly made or received are required to be reported by the donee to the agency head if the gifts are made by a contractor, subcontractor, or supplier doing business directly or indirectly with the governmental agency employing the recipient of such a gift. (1981, c. 764, s. 1; 1987, c. 399, s. 1; 1993, c. 539, s. 970; 1994, Ex. Sess., c. 24, s. 14(c); 2007-348, s. 18.)
And from your state's architecture laws and rules: http://www.ncbarch.org/wp-cont...
One of the definitions of Unprofessional Conduct is ...accepting any compensation or reward except from registrant's clients, any of which would reasonably appear to compromise registrant's professional judgment in serving the best interest of clients or public...
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