Online Feature Articles for Construction Professionals

Characters - Isaac: Project architect of consultant firm; Jacky: Proprietor of a construction materials company; Ken: Resident architect of consultant firm, saac's subordinate

Case Study: Construction Professionals - Architects

Isaac and Jacky both studied architecture at university and were close friends. Isaac now worked as the architect of building projects in a consultant firm. Jacky ran his own construction materials supplies company for some years.

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Isaac and Jacky quite often played golf together. On one occasion, Jacky learnt that Isaac was in charge of a new development project and preparing the tender specifications. Jacky was aggressive to expand his business and therefore indicated to Isaac that he was keen to supply materials to the contract.

Because of the close personal relationship between Isaac and Jacky, Isaac faces a conflict of interest situation when Jacky becomes a potential bidder of a contract handled by him. Isaac should follow the code of conduct of his company to declare the conflict of interest situation to his company. Besides, Isaac should comply with the Hong Kong Institute of Architects (HKIA)'s Code of Professional Conduct (Principle 2, Rule 2.1) which stipulates that an HKIA member shall avoid any action or situation inconsistent with his professional obligations or likely to raise doubts about his integrity. As the circumstances may require, a member should either withdraw from the situation, or remove the source of conflict, or declare it and obtain the agreement of the parties concerned to the continuance of his engagement. (More information about conflict of interest can be found in the "Topic of Interest" section.)

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At dinner, Jacky sought Isaac's assistance to tailor the tender specifications so that his company could become the sole supplier. In face of Isaac's hesitation and knowing that Isaac was planning to get married, Jacky invited Isaac to become a partner of his company in the name of Isaac's finacée and share the profits of the coming project. Thinking that the materials solely supplied by Jacky's company was of good quality and fit the project, Isaac agreed to assist.

Jacky's offering and Isaac's acceptance of company shares and profits for tailoring the tender specifications may breach Section 9 of the Prevention of Bribery Ordinance (POBO) and also the HKIA's Code of Professional Conduct (Principle 2, Rule 2.3) which prohibits architects from accepting advantages as an inducement to show favour to any person or body.
Regardless of whether a bribe is received directly or indirectly through a third party, the person is considered to have accepted the bribe as long as he is proved to be the ultimate beneficiary. As such, Isaac and Jacky may commit a POBO offence although the advantage involved is delivered via Isaac's finacée.
Isaac cannot justify his wrongdoing by claiming that the materials supplied by Jacky is of good quality. In fact, his under-table deal with Jacky ruins the fairness of the procurement process, and both of them are liable to prosecution.

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Isaac was often very busy with paperwork and relied on his team to conduct on-site supervision. He recently heard from another colleague that Ken, a resident architect of his firm who was working on a building project, had lavish meals and frequent gambling with a contractor's staff. Ken lost a lot in gambling and borrowed money from a manager of the contractor to settle the debt.

Consultant staff supervising construction works on site are entrusted with the responsibility to monitor the performance of the contractors for ensuring that the works performed are in full compliance with the contract requirements.
Ken may violate the company's code of conduct for he accepted lavish entertainment and gambled frequently with the contractor. He also put himself in a serious conflict of interest situation by borrowing money from the contractor, rendering him highly vulnerable to malpractices or even corruption.
Besides, Ken fails to comply with the HKIA's Code of Professional Conduct (Principle 2, Rules 2.2 and 2.8) which stipulates that an HKIA member shall avoid any action or situation inconsistent with his professional obligations or likely to raise doubts about his integrity, such as accepting excessive entertainment and having financial or personal interest in relation to his client's business.
Although Isaac is busily engaged in his own work, he should not delegate his duty of works supervision entirely to his subordinates. Instead, he should dedicate enough time to and exercise due diligence in conducting on-site inspections himself in order to ensure that the works of the contractor are in compliance with the contract requirements.
Isaac should also accord high priority to managing integrity of his subordinates, and should remind them to refrain from over-socialisation with contractors for avoiding conflict of interest. (More information about managing staff integrity can be found in the "Topic of Interest" section from the article for engineers.)

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As the Modular Integrated Construction (MiC) method was adopted in the project, Ken had to inspect the quality of the prefabrication works at its critical stage in a Mainland factory. During an inspection trip, the factory operator treated Ken to lavish meals, paid his expense in some entertainment places and offered gifts to him. When Ken found that the quality of the modules was marginally below the standard and requested the factory operator to rectify, the factory operator asked Ken to exercise his discretion and accept the modules.

Site supervisory staff may have to carry out inspection work outside Hong Kong. They should stay alert to corruption temptations that might occur during business trips.
If any part of a bribery offence, including soliciting, offering or accepting an unauthorised advantage, takes place in Hong Kong, the case can be pursued under the POBO.
Ken may also breach his company's code of conduct and the HKIA's Code of Professional Conduct (Principle 2, Rules 2.3 and 2.8) if he accepts lavish meals and unauthorised gifts from the Mainland factory operator for showing favour to the latter.
If Ken submits any false document to his company claiming that the quality of the modules meets the standard, he may also commit an offence under Section 9(3) of the POBO or conspiracy to defraud.

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Isaac decided to spot check the construction works and found that the waterproofing material applied was not the approved one. When questioned by Isaac, Ken defended that the approved material was not available in the market and the substitute material could achieve largely the required performance. He further assisted the contractor to seek Isaac's approval for the substitute material. Isaac was not sure whether he should approve the substitute material.

If Ken accepts advantage, such as a loan, from the manager of the contractor and in return connives at the change of waterproofing material used and even assists the contractor in seeking variation approval, he and the manager may breach Section 9 of the POBO. When approving the substitute material, Isaac must adhere to the contract requirements and reject the use of any unqualified material.
Even if Isaac agrees that the substitute material is acceptable based on justifiable reasons, he must strictly follow the standing procedure for initiating and approving the variation of contract.

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Online Feature Articles for Construction Professionals - Architects