So I've heard twice lately from contractors that they have experienced implied (sometimes explicit) requests for payment to ensure a contractor gets a job they are bidding on.
In both instances, they were for residential projects.
Am I missing something, or does an architect have to be dumb as a post to engage in this kind of thing? In my jusridication (I assume this is pretty consistent) your licence would be burned...
How common is this?
Any thoughts?
el jeffe
Dec 19, 07 11:15 am
there's a current investigation here in ABQ regarding kickbacks on change orders for the new federal courthouse.
one prominent local architect already pleaded and lost his license, others
are probably coming down too. fortunately for him, the office was large enough that he's still a principal there - they just reincorporated and renamed.
as i heard it, a local MEP engineer (a really cantankerous old guy) is the one who put the pieces together when reviewing change orders and blew the whistle.
i can't imagine risking my license for a few thousand though.....
strlt_typ
Dec 19, 07 11:17 am
can architects even get a contractor hired? isn't it in the hands of the general contractor and client?
simples
Dec 19, 07 11:21 am
a 10lb giant bar of chocolate showed up at my co-worker's desk last week; i know it's not the same thing, but i wanted to share!
aquapura
Dec 19, 07 11:22 am
A GC took me out to lunch last week. Is that a kickback?
quizzical
Dec 19, 07 11:30 am
from the AIA Canon of Ethics: "Members ... shall not accept
payments or gifts which are intended to influence their judgment."
the practices you cite occur often enough to eventually surface for virtually all practicing professionals ... you have to decide well in advance what ethical standards you intend to uphold with respect to such practices. sometimes there's a small - almost infinitesimal - difference between a gratuity (holiday gift) and a bribe.
I take the position that if there's any doubt whatsoever in my mind about the intent of the gift, then I decline to participate ... your professional reputation can be very fragile ... nobody's going to respect you much if your professional judgment is available to the highest bidder.
this sort of gets to the true meaning of "professional"
evilplatypus
Dec 19, 07 11:41 am
Its called bid rigging and its illeaglal as well as unethical. However, I do think architects should be able to profit a commission for specifying materials from vendors but thats just my opinion. Im sure the AIA would find that to "self interested" for us noble architects even though thats how every other design profesion makes money. Imagine if you could get a % of a 50 story curtain wall contract. Not only would you be more involved in the selection and specification, but your finacial intrest would lead you to the best most honest decision I believe because now your standing behind it just as the mfr is. You would be forced to reconcile your personal asthetic conciderations, which are subjective, to find the proper solution. Who knows, maybe the aesthetic solution is the best solution. Not a conflict of interest at all inho.
babs
Dec 19, 07 1:37 pm
evil --- mmmmmmm --- sounds like a pretty slippery slope to me, ethically.
whenever personal compensation depends on the professional recommendation one is making, it becomes hard to rely on -- and be seen as relying on -- independent and impartial judgment, where only the owner's (and society's) best interests are being considered.
pluk
Dec 19, 07 2:00 pm
wrong and stupid imho, do you want to get blamed if that curtain wall fails, comes in over cost or too late. You have no controll over the contractor or manufacturer. Office furniture is another good example, they always screw up and i'm always happy to be able to point to the rep, his fault not mine. Even the recommendation of a consultant can backfire and still we make that recommendation without financial compensation all the time
evilplatypus
Dec 19, 07 2:08 pm
"professional recommendation" - maybe if you were part of the commision structure past performance would carry more weight in the selection of vendors, mfrs. and materials. How often do you specify a super rad material only to be told yeah but...its unfamiliar, its too long lead time, we dont want to be the bleeding edge. So all those conciderations list in above post would indeed lead to better selection criteria. As for profesional recomendation, I think it should be better compansated, if Im going to take liability for a product a product I dont make, dont install, dont deliver, I should be compensated.
Living in Gin
Dec 19, 07 3:04 pm
Sort of like doctors getting a "commission" from the pharmaceutical companies? That idea scares the shit out of me. We're supposed to be professionals, not sales reps.
evilplatypus
Dec 19, 07 3:09 pm
Again with the comparisons to doctors and lawyers....look doctors and lawyerss are essentially continuous need based industries, simailar to accountants - you need to see them typically once a year. Architects and engineers are event driven industries, and as such we should profit from the "event", tickets, parking, consessions etc. Time for a new Biz model - the billable hour is dead.
evilplatypus
Dec 19, 07 3:09 pm
Again with the comparisons to doctors and lawyers....look doctors and lawyerss are essentially continuous need based industries, simailar to accountants - you need to see them typically once a year. Architects and engineers are event driven industries, and as such we should profit from the "event", tickets, parking, consessions etc. Time for a new Biz model - the billable hour is dead.
evilplatypus
Dec 19, 07 3:11 pm
LIG - if doctors are the pinicale of "profesional" thatn we should see its ok to do it to. The $ problem is 3 fold - architecture has been heavily influenced by "socialist" values of modernism, 2. architects fear business, 3. architects are many times unwilling to accept outside opinion
freq_arch
Dec 19, 07 3:42 pm
Thanks for the responses.
To clarify, the architect in the example I heard most recently appeared to be advising that for $20k a $1M contract would go to that contractor. Absolutely clear this is not OK, and it sure doesn't seem like a risk / reward ratio I would pursue even if I were an unethical loser.
As for reps and contractors paying for lunch - why the heck not? In my mind, a perk is just a perk if it's not tied to any specific project or selection criteria. Of course, there's some judgement required. For example - I would accept a bottle of wine from a contractor, or a 30% discount on flooring for my house from a product rep, unless I happen to be in the process of making a decision that involves either sources, in which case I would decline. It's not only about ethics, but also about optics.
David Cuthbert
Dec 19, 07 3:44 pm
funny we've been having this conversation professionally for a while, and as I recall much of what we were arguing was a noose-hold on the ethics section of architects registration. If you don't enforce it to the highest degree it is likely to happen again and again.
b3tadine[sutures]
Dec 19, 07 3:57 pm
yes.
b3tadine[sutures]
Dec 19, 07 3:58 pm
i'm sorry, the question again?
vado retro
Dec 19, 07 4:21 pm
jeffe are you talking about who i think you're talking about?
b3tadine[sutures]
Dec 19, 07 11:01 pm
shit i feel awkward asking for a professional discount at the paint store...
el jeffe
Dec 19, 07 11:05 pm
sunset grille vado....
joshuacarrell
Dec 20, 07 5:47 pm
Just to tag onto this thread...
I am considering an agreement where I act as an agent for a modular home construction company. For my trouble, I get up to a 6% markup on the sales price of the modular units, in addition to my professional fees for local permitting.
Any strong feelings from anyone on this?
j
quizzical
Dec 20, 07 7:37 pm
joshcookie ... seems to me that your role as "agent" is separate and distinct from your role as "architect" ... from my perspective, I don't see a problem with the commission, provided you keep those two role distinct ... if I understand the relationship, you receive a professional fee for professional work; and, you receive a separate agent's commission for helping to sell the modular units.
are there any areas where the two roles overlap? are there any areas where your role as a "salesman" might be confused with your role as an "architect"?
to me, this is much like you being both the architect and the developer for a custom home. for your design work, you would receive a design fee; in you role as developer, you would receive the difference between the development costs and the sales price. keep the two roles visible and distinct and you should be home free.
psycho-mullet
Dec 21, 07 12:15 am
Contractors get a mark up on the materials and they have some say in what is used. Also don't interior designers / decorators get a markup on the products?
Clearly architecture is a bit more complicated. Once again where I think being the architect / contractor / developer makes all of this much easier. You are having to make decisions based on issues like evil was saying, and when there's a problem during the project it's not about pointing fingers anymore it's about solving it because you're not worried about who has to pay for it because it's the same either way. And if you want to take a risk on that curtain wall and end up replacing it in 2 years that's a calculated risk you can take that you'd never recommend to a client.
But no I've never had any kickback offers, though I've had friends ask for a kickback for referring a client to me, which didn't really sit well honestly. It's not a favor then. If you want to be my agent then you better earn your keep and engotiate the terms and handle the client issues.
evilplatypus
Dec 21, 07 9:42 am
When I was bidding jobs for a GC a few years ago on the contractor side, we would get spec books so bad that on the GC side they've become not much more than toilet paper. I'd estimate 3/4 of the spec books we recieved were just reprinted spec books from some other job the architects didnt take the time to read. Almost all of them had addresses and names of other projects. The materials and specs rarely made sense for the project. So in short, if its obvious the architects arent spending the time with the materials ( or maybe they do only just the ones they like) it must be because theres no time for it - meaning they need more compensation for it or an interest beside personal asthetics.
el jeffe
Dec 21, 07 10:44 am
joshcookie,
i'd expect that you'd be required to disclose both of your sources of compensation to prospective clients to stay out of trouble.
other than that - sweet deal!
psycho-mullet,
i was giving friends small 'thank you' gifts when they referred jobs to me until i read the architect's practice act of new mexico more closely and noticed that it pretty clearly indicates that's a no-no.
so i just give holiday gifts this time of year...
in fact, i'm driving around town playing santa (or hanukkah harry) today.
whistler
Dec 21, 07 1:41 pm
Well I got a couple boxes of chocolates and bottles of Baileys clustered around my computer at the moment from builders / developers. I don't care if they're kick backs or not they sure go well with my morning coffee!
joshuacarrell
Dec 21, 07 1:41 pm
I guess part of my question is because I can see situations where the two roles WILL impact each other. I would be preparing exterior elevation for the City Design Review as an architect. Any add in cost from changes from the city; like siding material, dormers, awnings, balconies, will result in an increase in the amount I receive as a salesperson.
I am thinking from el jeffe's comments that I need some standard form of disclosure to the future clients that clearly identifies those realities.
Thanks for all your input.
j
joshuacarrell
Dec 21, 07 1:43 pm
Oh yeah, and they also can do modular construction of custom designed houses, where I get paid to design and sell the home. Still not really sure I am comfortable with that.
j
el jeffe
Dec 21, 07 1:53 pm
curious - does one need a RE license to sell modular homes?
ChipperT
Jan 9, 20 1:40 am
This thread is old, but I hope someone will see this question.
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, 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?
Gloominati
Jan 9, 20 10:46 am
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.
So I've heard twice lately from contractors that they have experienced implied (sometimes explicit) requests for payment to ensure a contractor gets a job they are bidding on.
In both instances, they were for residential projects.
Am I missing something, or does an architect have to be dumb as a post to engage in this kind of thing? In my jusridication (I assume this is pretty consistent) your licence would be burned...
How common is this?
Any thoughts?
there's a current investigation here in ABQ regarding kickbacks on change orders for the new federal courthouse.
one prominent local architect already pleaded and lost his license, others
are probably coming down too. fortunately for him, the office was large enough that he's still a principal there - they just reincorporated and renamed.
as i heard it, a local MEP engineer (a really cantankerous old guy) is the one who put the pieces together when reviewing change orders and blew the whistle.
i can't imagine risking my license for a few thousand though.....
can architects even get a contractor hired? isn't it in the hands of the general contractor and client?
a 10lb giant bar of chocolate showed up at my co-worker's desk last week; i know it's not the same thing, but i wanted to share!
A GC took me out to lunch last week. Is that a kickback?
from the AIA Canon of Ethics: "Members ... shall not accept
payments or gifts which are intended to influence their judgment."
the practices you cite occur often enough to eventually surface for virtually all practicing professionals ... you have to decide well in advance what ethical standards you intend to uphold with respect to such practices. sometimes there's a small - almost infinitesimal - difference between a gratuity (holiday gift) and a bribe.
I take the position that if there's any doubt whatsoever in my mind about the intent of the gift, then I decline to participate ... your professional reputation can be very fragile ... nobody's going to respect you much if your professional judgment is available to the highest bidder.
this sort of gets to the true meaning of "professional"
Its called bid rigging and its illeaglal as well as unethical. However, I do think architects should be able to profit a commission for specifying materials from vendors but thats just my opinion. Im sure the AIA would find that to "self interested" for us noble architects even though thats how every other design profesion makes money. Imagine if you could get a % of a 50 story curtain wall contract. Not only would you be more involved in the selection and specification, but your finacial intrest would lead you to the best most honest decision I believe because now your standing behind it just as the mfr is. You would be forced to reconcile your personal asthetic conciderations, which are subjective, to find the proper solution. Who knows, maybe the aesthetic solution is the best solution. Not a conflict of interest at all inho.
evil --- mmmmmmm --- sounds like a pretty slippery slope to me, ethically.
whenever personal compensation depends on the professional recommendation one is making, it becomes hard to rely on -- and be seen as relying on -- independent and impartial judgment, where only the owner's (and society's) best interests are being considered.
wrong and stupid imho, do you want to get blamed if that curtain wall fails, comes in over cost or too late. You have no controll over the contractor or manufacturer. Office furniture is another good example, they always screw up and i'm always happy to be able to point to the rep, his fault not mine. Even the recommendation of a consultant can backfire and still we make that recommendation without financial compensation all the time
"professional recommendation" - maybe if you were part of the commision structure past performance would carry more weight in the selection of vendors, mfrs. and materials. How often do you specify a super rad material only to be told yeah but...its unfamiliar, its too long lead time, we dont want to be the bleeding edge. So all those conciderations list in above post would indeed lead to better selection criteria. As for profesional recomendation, I think it should be better compansated, if Im going to take liability for a product a product I dont make, dont install, dont deliver, I should be compensated.
Sort of like doctors getting a "commission" from the pharmaceutical companies? That idea scares the shit out of me. We're supposed to be professionals, not sales reps.
Again with the comparisons to doctors and lawyers....look doctors and lawyerss are essentially continuous need based industries, simailar to accountants - you need to see them typically once a year. Architects and engineers are event driven industries, and as such we should profit from the "event", tickets, parking, consessions etc. Time for a new Biz model - the billable hour is dead.
Again with the comparisons to doctors and lawyers....look doctors and lawyerss are essentially continuous need based industries, simailar to accountants - you need to see them typically once a year. Architects and engineers are event driven industries, and as such we should profit from the "event", tickets, parking, consessions etc. Time for a new Biz model - the billable hour is dead.
LIG - if doctors are the pinicale of "profesional" thatn we should see its ok to do it to. The $ problem is 3 fold - architecture has been heavily influenced by "socialist" values of modernism, 2. architects fear business, 3. architects are many times unwilling to accept outside opinion
Thanks for the responses.
To clarify, the architect in the example I heard most recently appeared to be advising that for $20k a $1M contract would go to that contractor. Absolutely clear this is not OK, and it sure doesn't seem like a risk / reward ratio I would pursue even if I were an unethical loser.
As for reps and contractors paying for lunch - why the heck not? In my mind, a perk is just a perk if it's not tied to any specific project or selection criteria. Of course, there's some judgement required. For example - I would accept a bottle of wine from a contractor, or a 30% discount on flooring for my house from a product rep, unless I happen to be in the process of making a decision that involves either sources, in which case I would decline. It's not only about ethics, but also about optics.
funny we've been having this conversation professionally for a while, and as I recall much of what we were arguing was a noose-hold on the ethics section of architects registration. If you don't enforce it to the highest degree it is likely to happen again and again.
yes.
i'm sorry, the question again?
jeffe are you talking about who i think you're talking about?
shit i feel awkward asking for a professional discount at the paint store...
sunset grille vado....
Just to tag onto this thread...
I am considering an agreement where I act as an agent for a modular home construction company. For my trouble, I get up to a 6% markup on the sales price of the modular units, in addition to my professional fees for local permitting.
Any strong feelings from anyone on this?
j
joshcookie ... seems to me that your role as "agent" is separate and distinct from your role as "architect" ... from my perspective, I don't see a problem with the commission, provided you keep those two role distinct ... if I understand the relationship, you receive a professional fee for professional work; and, you receive a separate agent's commission for helping to sell the modular units.
are there any areas where the two roles overlap? are there any areas where your role as a "salesman" might be confused with your role as an "architect"?
to me, this is much like you being both the architect and the developer for a custom home. for your design work, you would receive a design fee; in you role as developer, you would receive the difference between the development costs and the sales price. keep the two roles visible and distinct and you should be home free.
Contractors get a mark up on the materials and they have some say in what is used. Also don't interior designers / decorators get a markup on the products?
Clearly architecture is a bit more complicated. Once again where I think being the architect / contractor / developer makes all of this much easier. You are having to make decisions based on issues like evil was saying, and when there's a problem during the project it's not about pointing fingers anymore it's about solving it because you're not worried about who has to pay for it because it's the same either way. And if you want to take a risk on that curtain wall and end up replacing it in 2 years that's a calculated risk you can take that you'd never recommend to a client.
But no I've never had any kickback offers, though I've had friends ask for a kickback for referring a client to me, which didn't really sit well honestly. It's not a favor then. If you want to be my agent then you better earn your keep and engotiate the terms and handle the client issues.
When I was bidding jobs for a GC a few years ago on the contractor side, we would get spec books so bad that on the GC side they've become not much more than toilet paper. I'd estimate 3/4 of the spec books we recieved were just reprinted spec books from some other job the architects didnt take the time to read. Almost all of them had addresses and names of other projects. The materials and specs rarely made sense for the project. So in short, if its obvious the architects arent spending the time with the materials ( or maybe they do only just the ones they like) it must be because theres no time for it - meaning they need more compensation for it or an interest beside personal asthetics.
joshcookie,
i'd expect that you'd be required to disclose both of your sources of compensation to prospective clients to stay out of trouble.
other than that - sweet deal!
psycho-mullet,
i was giving friends small 'thank you' gifts when they referred jobs to me until i read the architect's practice act of new mexico more closely and noticed that it pretty clearly indicates that's a no-no.
so i just give holiday gifts this time of year...
in fact, i'm driving around town playing santa (or hanukkah harry) today.
Well I got a couple boxes of chocolates and bottles of Baileys clustered around my computer at the moment from builders / developers. I don't care if they're kick backs or not they sure go well with my morning coffee!
I guess part of my question is because I can see situations where the two roles WILL impact each other. I would be preparing exterior elevation for the City Design Review as an architect. Any add in cost from changes from the city; like siding material, dormers, awnings, balconies, will result in an increase in the amount I receive as a salesperson.
I am thinking from el jeffe's comments that I need some standard form of disclosure to the future clients that clearly identifies those realities.
Thanks for all your input.
j
Oh yeah, and they also can do modular construction of custom designed houses, where I get paid to design and sell the home. Still not really sure I am comfortable with that.
j
curious - does one need a RE license to sell modular homes?
This thread is old, but I hope someone will see this question.
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, 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?
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.