Construction Contractors Follow Defense Peers in Ethics Push

Engineering News-Record, May 12, 2008 — Construction firms are aiming to mirror what defense- industry contractors did in the late 1980s by launching a new business ethics initiative. Thirteen general contractors have joined the effort, which requires participants to embrace standards of open competition, transparency and conflict-of-interest avoidance, among other business practices, says an April 30 announcement.

Founding members of the Construction Industry Ethics and Compliance Initiative are Austin Industries Inc., Balfour Beatty, Clark Construction Group, Granite Construction Inc., Kenny Construction Co., Kiewit Corp., The Lane Construction Corp., Lusardi Construction Co., Suffolk Construction Co., Sundt Construction Inc., Traylor Bros. Inc., The Walsh Group and Zachry Construction Corp.

All are members of the Associated General Contractors of America, but the new group has no official ties to AGC and "is not a lobbying organization," explains Richard Bednar, a Washington, D.C., attorney who is interim coordinator.

Formation of the initiative "confirms that members seek to conduct business at the highest level of integrity," says Granite CEO and group Chairman William G. Dorey. Bednar says firms will share "best practices" in dealing with ethics challenges.

Members do not have to be only public-sector contractors, he adds. The industry ethics group is set to follow the precedent set by the Defense Industry Initiative on Business Ethics and Conduct, a group of 80 big defense contractors founded in 1986 that Bednar also manages. Among its members are KBR, URS Corp. and Earth Tech.

The construction ethics group follows new federal contractor compliance rules enacted last December. Membership will grow but will likely be limited to general contractors, says AGC general counsel Michael Kennedy. "It will clearly be contractor-led," he says.