Conflict of Interest
Conflict of Interest
(OP)
I need some opinions on the following scenario.
Contractor A hired us to do a project. In the midst of the project, Contractor A fires his partner and our company goes onto finish the project with Contractor A. The project is a success, a prototype of sorts. Multiple future project possibilities are appearing on the near horizon.
Meanwhile, contractor B who happens to be the fired partner, contacts us and asks us to be his PE for some similar, yet different projects.
Is this a conflict of interest? The two designs are different, yet they would compete in the particular market, which is quite local and small. Contractor A has welcomed us onto his "team" and as a result we have gotten a lot of publicity and political recognition. I would hate for him to lose a project because we did a good job for his competitor.
On the other hand, we need the work.
Any advise would be appreciated.
Contractor A hired us to do a project. In the midst of the project, Contractor A fires his partner and our company goes onto finish the project with Contractor A. The project is a success, a prototype of sorts. Multiple future project possibilities are appearing on the near horizon.
Meanwhile, contractor B who happens to be the fired partner, contacts us and asks us to be his PE for some similar, yet different projects.
Is this a conflict of interest? The two designs are different, yet they would compete in the particular market, which is quite local and small. Contractor A has welcomed us onto his "team" and as a result we have gotten a lot of publicity and political recognition. I would hate for him to lose a project because we did a good job for his competitor.
On the other hand, we need the work.
Any advise would be appreciated.





RE: Conflict of Interest
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Conflict of Interest
The inside knowledge you gained from and developed for A while B was a partner (not just an employee)is proprietary.
Before I could advise I would need to know who owned what in A before the bust up and who retained what after it.
I am not a lawyer and laws vary greatly from place to place, so you should also seek legal advice from a local source. I expect that strictly speaking in most developed countries it is against the law to boycott people without good reason, but also it is against the law to disclose someone else's proprietary property or IP.
In this case I think what I think might be the law and what is ethical are in unison.
Regards
Pat
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RE: Conflict of Interest
That scenario is the deciding factor to me and the choice is obvious. Unless there are extenuating reasons you have not mentioned here, I would stick with Contractor A.
Mike McCann
MMC Engineering
Motto: KISS
Motivation: Don't ask
RE: Conflict of Interest
Pick one and stay with them.
RE: Conflict of Interest
An expert is a man who has made all the mistakes which can be made in a very narrow field
RE: Conflict of Interest
RE: Conflict of Interest
David
RE: Conflict of Interest
RE: Conflict of Interest
Imagine if you provided a physical product rather than a service. You wouldn't even think twice about proposing the same product to multiple contractors bidding on the same project would you.
RE: Conflict of Interest
Like Pat pointed out, none of us are lawyers so if concerned about actual legal issues, not more general 'ethics' concerns take any advice here with a pinch of salt.
I'm tempted to second the idea of broaching the topic with contractor A, but I'm not 100% sure it's a great idea.
It may be more of a business decision, potentially with legal ramifications, than an ethics one.
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Conflict of Interest
In regards to legal or contract issues regarding competition, we wouldn't really ever consider limiting ourselves through verbage like this. Otherwise we would end up being somone's private engineer and our job base would decrease to about half.
In regards to the contractors being in the same market, we do that all the time with residential housing....meaning we apply the knowledge base we have, which was built on someone elses tab, to design for the competition.
Contractor B has obviously caught on to the fact that any "breaking developments" we have while working for Contractor A will obviously roll over into his project (assuming we were working for him) at probably a fraction of the cost Contractor A paid to develop them, which isn't
really fair....I guess. Again, we do this all the time in the residential housing market without thinking twice.
And if Contractor A found out we were working for his nemesis, we would immediately and permanently be working only for Contractor B. And I'm sure he would find out eventually.
So in short, if we are going to be working for one company in the end, it might as well be the one we have a good hand shake with now. I think we would choose Contractor A.
RE: Conflict of Interest
Regards
Pat
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RE: Conflict of Interest
It is actually very common to quote the same project for three or more suppliers and for them to get quotes from three or more design companies. If you come up with an innovative solution to a problem you are free to use it on a similar job for a different customer, just as the customer is free to pass your design on to a competitor of yours and say use this as a guide it worked well last time.
If you want to go down the route of one customer stipulating that you cannot supply another then I would want something in return, like they only use us exclusively or a guarantee of a certain amount of work. Even then I don't think that is great business to have all your eggs in one basket as it leaves you very vulnerable.
On the other hand we do occasionally work with invertors and patent applications and for this we would happily sign confidentially contracts, but this is not our main source of work so does not limit our ability to stay in business.
If I was in the position of the OP I would inform company A of the situation and state that if they want us to not work for company B then we would want something in return. We might get a good deal out of it or we might lose a valuable customer, but they are the sort of business decisions you have to make on a daily basis.
RE: Conflict of Interest
My firm did a huge amount of work for (Big Box Hardware Store A) who is in direct competition with (Big Box Hardware Store B), both of whom tend to build big box hardware stores across the street from each other, all across the country. Any intelligent engineer from the United States knows which two hardware store companies I'm talking about here. We were told by BBHS-A that under no circumstances were we to do work for BBHS-B. We even had one project that was a large strip shopping center of undetermined tenants, and once our client on that job, a private developer, sought out BBHS-B as a tenant, we had to recuse ourselves from the job.
Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East - http://www.campbellcivil.com
RE: Conflict of Interest
b) Explain client A that you cannot afford to skip the business with client B without any compensation.
Wait for the reaction and dance according with the music.
RE: Conflict of Interest
If I was company A, that line of logic wouldn't follow for me... my response would be "What if company B didn't exist?". Whether or not I would care about you doing business with company B is a different story, just that your initial logic wouldn't float...
Dan - Owner

http://www.Hi-TecDesigns.com
RE: Conflict of Interest
I might even be a bit more diplomatic than that unless it was a Monday morning or a Friday afternoon.
RE: Conflict of Interest
It's irrelevant to company A that you take a financial hit from ignoring company B. You're free to raise your rates to compensate for your overall financial difficulties, but again, that's a business decision that has nothing to do with company A... you failed to adequately provide for your company coffers by bringing in enough clients. To my point, if company B didn't exist, would you charge company A more because you failed to entice some other random client?
What is relevant to company A is any conflict of interest should you take on company B.
Now, the two points may not be mutually exclusive, but I don't believe they are mutually inclusive, either.
Dan - Owner

http://www.Hi-TecDesigns.com
RE: Conflict of Interest
It would be foolish to lose the offer of a large contract for company B to secure a small one for company A.
As we have both said what you agree between companies is purely the sort of business decision you have to make on a daily basis.
Personally I would be open and honest with them, that is just the way I like to do business.
RE: Conflict of Interest
care to elaborate?
RE: Conflict of Interest