Ethical issue,or issues, affecting the Construction industry today (mainly in the USA) - Research Paper Example

Ethical Issues Affecting the Contemporary American Construction Industry: Bid Shopping Ethical Issues Affecting the Contemporary American Construction Industry: Bid Shopping Abstract Construction work all over the world including USA is affected by a number of unethical practices, one of which is bid shopping. Bid shopping challenges the foundations of trust between a general contractor and an owner as well as between a general contractor and the subcontractors. It reflects that the general contractor is interested solely in profit making and would compromise upon all standards of ethics in the quest for profit.

This paper explores the issue of bid shopping in construction. This paper compiles information about bid shopping for the construction professionals who want to gain an in-sight to this unethical issue. Introduction Bid shopping is one of the most unfortunate realities of the American construction industry. It is a process wherein the price of bid of a subcontractor is disclosed by the general contractor to another subcontractor so that the general contractor may be able to get the work done in lesser cost.

Bid peddling is a similar concept in which a subcontractor volunteers to make a bid lower than a known amount of a second subcontractor. Bid shopping totally ruins the integrity of the bidding process and it may happen in both the pre- and post-contract-award time. Bid shopping has conventionally been tried to stop by the contract law, but they have not proved effective in stopping the practice. The amount of bid shopping can be reduced by creating more awareness in the contractors regarding the effects of this practice.

Bid shopping is one of the most fundamental hindrances in the way of fast and cost effective completion of the construction projects. This paper explains the detrimental effects of the bid shopping. Bid shopping in the bidding process The bidding process is generally well-known by all subcontractors and general contractors. One of the most crucial elements of every bid that is made is the solicitation of the competitive bids that are made by other subcontractors. The conduct of people involved in the act of bid shopping is governed by various laws.

The best deal may not always be obtained by legal means. Bid shopping in a specific project takes place as a result of continued solicitation of bids by the general contractors from the subcontractors after the selection of their original bid. In the course of preparation of bid submission on a particular project, one set of subcontractors is made use of by a general contractor. After the grant of project to the general contractor, he tends to receive bids from a different set of subcontractors with a view to reducing the expenses and increasing the profitability of the work.

This may be allowed in some circumstances, but bid shopping is forbidden in a vast majority of cases. Both subcontractors and general contractors should perceive the involved legal implications so that they may be able to escape liability and also enhance their profits. Permissibility of bid shopping To find out if bid shopping is permissible according to law, the owner of bids and also the project should be considered. Owners are primarily of three kinds, the first of which is of the owners of private projects in most of which, bid shopping is allowed.

“The law usually holds that no enforceable contract is created between a general contractor and a subcontractor during the initial bidding process” (The Lien Zone, 2008). In such circumstances, the general contractors find an opportunity to keep soliciting bids and hiring new subcontractors after the original bid has been granted. The subcontractors may also retreat from the contract on a private project any time if they think that the profit is not worth the effort. The second type of owner is municipality, who proceeds in accordance with the municipal codes which lay certain restrictions in the way of both the subcontractors and the general contractors.

These projects increase the difficulty level for a general contractor to bid shop or for a subcontractor to break free of the contract. “Certain municipal codes might provide general contractors with various incentives that, as a practical effect, may limit the number and types of subcontractors a general contractor can utilize when submitting a bid for a municipal project” (The Lien Zone, 2008). Bid shopping is also very difficult to conduct in state-owned projects which happen to be the third kind of projects.

Conclusion Concluding, bid shopping is a very unethical act of contractors that tend to acquire undue benefit in comparison to other competitors in the process of bidding (Degn and Miller, 2003, p. 47). It is very deleterious to the construction industry since it develops an unhealthy environment for the business and renders the whole process of bidding meaningless. The consequences of bid shopping include but are not limited to poor quality of work, increased safety risks on the site and delayed completion of the project.

Within the American construction industry, rules vary from project to project according to the ownership of the project, and so does bid shopping. Graduates of construction related programs assume most of the responsibility for the identification and implementation of processes which would enable the constructors to accomplish their work within time without having to compromise upon the quality of work. Methods to enhance the work efficiency and quality should be made a compulsory part of the curriculum taught in the construction programs.

References: Degn, E., and Miller, K. R. (2003). Bid Shopping. Journal of Construction Education. 8(1): 47- 55. Retrieved from http://cmfac.groups.et.byu.net/miller/files/BidShopping.pdf. The Lien Zone. (2008). Bid Shopping: Understanding Your Rights. Retrieved from http://www.thelienzone.com/articles/Bid_Shopping.htm.