LECTURE 03: Fundamental Canons

Guidelines to Practice Under the Fundamental Canons of Ethics

Canon 1
Engineers shall hold paramount the safety, health and welfare of the public and shall strive
to comply with the principles of sustainable development in the performance of their
professional duties.
a) Engineers shall approve or seal only those design documents, reviewed or prepared by
them, which are determined to be safe for public health and welfare in conformity with
accepted engineering standards.
b) Engineers whose professional judgment is overruled under circumstances where the
safety, health and welfare of the public are endangered, or the principles of sustainable
development ignored, shall inform their clients or employers of the possible
consequences.
c) Engineers who have knowledge or reason to believe that another person or firm may be
in violation of any of the provisions of Canon 1 shall present such information to the
proper authority in writing and shall cooperate with the proper authority in furnishing
such further information or assistance as may be required.
d) Engineers should seek opportunities to be of constructive service in civic affairs and
work for the advancement of the safety, health and well-being of their communities, and
the protection of the environment through the practice of sustainable development.
e) Engineers should be committed to improving the environment by adherence to the
principles of sustainable development so as to enhance the quality of life of the general
public.
Canon 2
Engineers shall perform services only in areas of their competence.
a. Engineers shall undertake to perform engineering assignments only when qualified by
education or experience in the technical field of engineering involved.
b. Engineers may accept an assignment requiring education or experience outside of their
own fields of competence, provided their services are restricted to those phases of the
project in which they are qualified. All other phases of such project shall be performed by
qualified associates, consultants, or employees.
c. Engineers shall not affix their signatures or seals to any engineering plan or document
dealing with subject matter in which they lack competence by virtue of education or
experience or to any such plan or document not reviewed or prepared under their
supervisory control.
Canon 3
Engineers shall issue public statements only in an objective and truthful manner.
a. Engineers should endeavor to extend the public knowledge of engineering and
sustainable development, and shall not participate in the dissemination of untrue, unfair
or exaggerated statements regarding engineering.
b. Engineers shall be objective and truthful in professional reports, statements, or testimony.
They shall include all relevant and pertinent information in such reports, statements, or
testimony
c. Engineers, when serving as expert witnesses, shall express an engineering opinion only
when it is founded upon adequate knowledge of the facts, upon a background of technical
competence, and upon honest conviction
d. Engineers shall issue no statements, criticisms, or arguments on engineering matters
which are inspired or paid for by interested parties, unless they indicate on whose behalf
the statements are made.
e. Engineers shall be dignified and modest in explaining their work and merit and will avoid
any act tending to promote their own interests at the expense of the integrity, honor and
dignity of the profession.
Canon 4
Engineers shall act in professional matters for each employer or client as faithful agents or
trustees, and shall avoid conflicts of interest.
a. Engineers shall avoid all known or potential conflicts of interest with their employers or
clients and shall promptly inform their employers or clients of any business association,
interests, or circumstances which could influence their judgment or the quality of their
services.
b. Engineers shall not accept compensation from more than one party for services on the
same project, or for services pertaining to the same project, unless the circumstances are
fully disclosed to and agreed to, by all interested parties.
c. Engineers shall not solicit or accept gratuities, directly or indirectly, from contractors,
their agents, or other parties dealing with their clients or employers in connection with
work for which they are responsible.
d. Engineers in public service as members, advisors, or employees of a governmental body
or department shall not participate in considerations or actions with respect to services
solicited or provided by them or their organization in private or public engineering
practice.
e. Engineers shall advise their employers or clients when, as a result of their studies, they
believe a project will not be successful.
f. Engineers shall not use confidential information coming to them in the course of their
assignments as a means of making personal profit if such action is adverse to the interests
of their clients, employers or the public.
 g. Engineers shall not accept professional employment outside of their regular work or
interest without the knowledge of their employers.
Canon 5
Engineers shall build their professional reputation on the merit of their services and shall
not compete unfairly with others.
a. Engineers shall not give, solicit or receive either directly or indirectly, any political
contribution, gratuity, or unlawful consideration in order to secure work, exclusive of
securing salaried positions through employment agencies.
b. Engineers should negotiate contracts for professional services fairly and on the basis of
demonstrated competence and qualifications for the type of professional service required.
c. Engineers may request, propose or accept professional commissions on a contingent basis
only under circumstances in which their professional judgments would not be
compromised.
d. Engineers shall not falsify or permit misrepresentation of their academic or professional
qualifications or experience.
e. Engineers shall give proper credit for engineering work to those to whom credit is due,
and shall recognize the proprietary interests of others. Whenever possible, they shall
name the person or persons who may be responsible for designs, inventions, writings or
other accomplishments.
f. Engineers may advertise professional services in a way that does not contain misleading
language or is in any other manner derogatory to the dignity of the profession. Examples
of permissible advertising are as follows:
 Professional cards in recognized, dignified publications, and listings in rosters or
directories published by responsible organizations, provided that the cards or listings are
consistent in size and content and are in a section of the publication regularly devoted to
such professional cards. Brochures which factually describe experience, facilities,
personnel and capacity to render service, providing they are not misleading with respect
to the engineer’s participation in projects described
 Display advertising in recognized dignified business and professional publications,
providing it is factual and is not misleading with respect to the engineer’s extent of
participation in projects described.
 A statement of the engineers’ names or the name of the firm and statement of the type of
service posted on projects for which they render services.
 Preparation or authorization of descriptive articles for the lay or technical press, which
are factual and dignified. Such articles shall not imply anything more than direct
participation in the project described.
 Permission by engineers for their names to be used in commercial advertisements, such
as may be published by contractors, material suppliers, etc., only by means of a modest,
dignified notation acknowledging the engineers’ participation in the project described.
Such permission shall not include public endorsement of proprietary products.
 g. Engineers shall not maliciously or falsely, directly or indirectly, injure the professional
reputation, prospects, practice or employment of another engineer or indiscriminately
criticize another’s work.
h. Engineers shall not use equipment, supplies, laboratory or office facilities of their
employers to carry on outside private practice without the consent of their employers.
Canon 6
Engineers shall act in such a manner as to uphold and enhance the honor, integrity, and
dignity of the engineering profession and shall act with zero- tolerance for bribery, fraud,
and corruption.
a. Engineers shall not knowingly engage in business or professional practices of a
fraudulent, dishonest or unethical nature.
b. Engineers shall be scrupulously honest in their control and spending of monies, and
promote effective use of resources through open, honest and impartial service with
fidelity to the public, employers, associates and clients.
c. Engineers shall act with zero-tolerance for bribery, fraud, and corruption in all
engineering or construction activities in which they are engaged.
d. Engineers should be especially vigilant to maintain appropriate ethical behavior where
payments of gratuities or bribes are institutionalized practices.
e. Engineers should strive for transparency in the procurement and execution of projects.
Transparency includes disclosure of names, addresses, purposes, and fees or commissions
paid for all agents facilitating projects.
f. Engineers should encourage the use of certifications specifying zero-tolerance for
bribery, fraud, and corruption in all contracts.
Canon 7
Engineers shall continue their professional development throughout their careers, and shall
provide opportunities for the professional development of those engineers under their
supervision.
a. Engineers should keep current in their specialty fields by engaging in professional
practice, participating in continuing education courses, reading in the technical literature,
and attending professional meetings and seminars.
b. Engineers should encourage their engineering employees to become registered at the
earliest possible date.
c. Engineers should encourage engineering employees to attend and present papers at
professional and technical society meetings.
d. Engineers shall uphold the principle of mutually satisfying relationships between
employers and employees with respect to terms of employment including professional
grade descriptions, salary ranges, and fringe benefit
LECTURE 04:
SELECTION OF A CIVIL ENGINEER
BASIS FOR SELECTION
The primary move for a client in selecting an engineer is to define the scope of works in a
project. The client determines performance requirements.
Factors in the selection process for Civil Engineer (Private Sector):
1. Reputation of the civil engineer.
2. Registered Civil Engineer (valid from PRC).
3. Qualifications and expertise in performing services.
4. Ability to assign a qualified staff on site to take charge of the project.
5. Possession of financial and business resources to accomplish the assignment.
Note: For government projects, EO 164 and PD 1594 as amended apply to procurement of
consulting services and selection of contractor for construction.
CLIENT'S SELECTION COMMITTEE
1. Person designated to select the civil engineer should be familiar with the project
requirements
2. Person designated to select the civil engineer should be free from pressure - internal or
external.
Composition of the Committee
 The committee should comprise of three individuals, one of which is a professional civil
engineer.
 The individuals should demonstrate objectivity.
 Additionally, at least one should be thoroughly familiar with civil engineering practices.
QUALIFICATIONS-BASED SELECTION (QBS) PROCEDURE
QBS = Qualifications-Based Selection
* If the client has a satisfactory relationship with the civil engineer, there are steps which can be
skipped in the procedure. The procedure is as follows:
1. Statement of:
 General nature of the project.
 Services required
 Request statements
 CE qualifications and experience
 RFQ. Request for qualifications. Request for general qualifications in a selected area of
expertise.
 RFP. Request for proposals. Shortlist for selecting a civil engineer for a specific project.
2. Prepare a budget expected from the potential civil engineer.
3. Evaluate statements. Select the best three civil engineers or firms.
4. Correspondence with the chosen engineers.
A. Describe the project in detail including:
 Scope of the project
 Services required
B. Proposal for the engineer to describe:
 Plan for managing
 Plan for performing the required services
 Assigned personnel
 Proposed schedule
 Experience with similar projects
 Office location where services will be performed
 Financial standing
 Present workload
 References
* Each civil engineer or firm should be given the opportunity to visit the site, review data and
obtain clarification of any required items.
* For complex projects, a pre-proposal conference might be beneficial.
5. Interview and discussion.
6. Check with recent clients of each engineer about the performance of services.
7. List the engineers of preference.
8. The best qualified engineer is invited to develop a detailed scope.
9. The engineer's proposed compensation should be taken into account.
10. If negotiations fail, inform the first civil engineer or firm through writing about termination
of negotiation and then proceed to the second engineer.
11. When an agreement (scope, schedule, compensation) has been reached, a written contract is
finalized.
SELECTION PROCEDURE FOR "LEVEL OF EFFORT" CONTRACTS
Bidding may sometimes be unsuitable for the project thus consulting civil engineers opt for level
of effort. After furnishing all necessary data, negotiation in this type proceeds like steps 9-11 in
QBS system.
TWO ENVELOP SYSTEM
As its name denotes, two submittals are required in a sealed form. One will contain the technical
proposal and the other is the price proposal. The client will then open the technical proposals and
checks which is best suited his purpose. After choosing the best technical proposal as he deems
fit for the project, he opens the price proposal

LECTURE 05:
CHARGING FOR CIVIL ENGINEERING SERVICES
Salary Cost Multiplier Direct
Compensation on the basis of the salary cost times an agreed multiplier is a frequently used
method of determining charges for engineering services. With this method, charges for civil
engineering services are based mainly on direct salaries. The salary cost times multiplier method
may be utilized as either a multiplier times salary cost (two multiplier version) or a multiplier
times direct salary cost (single multiplier version).
The direct salary times multiplier or as it is frequently called the direct labor times multiplier
version is very similar to the salary cost times the multiplier with the exception that it applies a
single multiplier to unburdened direct labor cost, i.e., direct salaries without employees benefit.
The single multiplier includes cost associated with employees benefit, overhead, and a margin
for contingencies, risk, and profit. Regardless of the method utilized as a basis of compensation,
a provision in the agreement should state that payments will be made to the Civil Engineer
during progress of the services, based on monthly invoices, and within a reasonable time after
billing.
The following factors are pertinent to the salary cost times multiplier:
Salary cost
- is defined as the "direct salaries plus the employee benefits".
Multiplier
- which is applied to salary cost is a factor that compensates the Civil Engineer for overhead plus
a reasonable margin for contingencies, interest or invested capital readiness to serve, and profit.
- average multiplier should be between 2.5 and 3 times the average cost
Direct Non-salary
- expense usually incurred in engineering engagements may include the following:
 Living and traveling expenses
 Identifiable communications expenses
 Expenses for services and equipment directly applicable to the project
 Identifiable drafting supplies, stenographic supplies, and reproduction work Expenses for
unusual insurance and specialized health and safety programs
Civil Engineers
- overhead which comprises a major portion of the compensation generated by the multiplier on
salary cost,
includes the following indirect cost:
 Provision for office expenses
 Tax and insurance other than those included as salary cost
 Library and periodical expenses
 Executive, administrative, accounting, legal, stenographic, and clerical salaries and
expenses (Other than salaries included in salary costs and expenses)
 Business development expenses
 Provision for loss of productive time
 Cost of acquiring and maintaining computers, development of software, and training staff
when not billed as direct cost
Accounting records
- the civil engineer who perform services under a salary cost times multiplier agreement or other
cost-based agreement must provide the accounting necessary to segregate and record the
appropriate expenditures.
Employees Benefits
 Sick leave
 Vacation leave
 Holiday and incentive pay
 Contributions for social security
 Worker's compensation insurance retirement
 Medical
NON SALARY EXPENSE – HOURLY BILLING RATE
The Hourly Rate method of compensation is very similar to the salary cost time multiplier
method in that the hourly billing rate includes all direct personnel expense, overhead and profit.
Direct non-salary expenses are a separate item for reimbursement, usually with a service charge.
Civil engineering firms may elect to utilize this method of compensation on projects where the
scope of service is not well defined or to simplify accounting and record keeping.

NON SALARY EXPENSE – PER DIEM

The term "day diem" normally refers to an eight-hour day. Direct personnel services are
frequently/charged on a per diem basis. This basis is particularly suited to expert witness or other
legal-type services and to other short-term engagements involving intermittent personal services.
Where per Diem services are furnished, the Civil Engineer should be compensated for all of the
time devoted to providing them including travel and standby time. The per Diem charge should
be based on the complexity, risk and important of the services and on experience.
Charges of Per Diem
 Complexity
 Risk
 Services and professional standing of the Civil Engineer
 Expertise
 Experience
Cost Plus Fixed Fee Fixed Price
Cost Plus Fixed Fee
The cost plus fixed fee basis requires that the client and Civil Engineer define and agree upon the
scope of services the Civil Engineer is to perform. The scope of services, cost estimate, and fixed
fee should be incorporated into the client-engineer agreement.
The Civil Engineer is reimbursed for the actual costs of all services and supplies related to the
project, including:
 Salary costs
 Overhead
 Direct non-salary expenses
 Fixed fee, an amount to compensate the Civil Engineer for contingencies, interest on
invested capital, readiness to serve, and profit.
Fixed Price
Frequently used for investigations and studies and for basic services on design type projects
where the scope and complexity of the assignment are clearly and fully defined.
Percentage of Construction Cost
It is defined as the estimated total cost of constructing the facility to be covered by the proposed
detailed design, the construction cost includes the cost of the current market rates of labor,
materials, supplies, and equipment used in the construction.
The percentage fee shall consider the type, complexity, location, and magnitude of construction
cost of the project and shall not exceed the following percentages of estimated construction cost.
 Feasibility Studies - Three Percent (3%)
 Detailed Engineering design - Six Percent (6%)
 Detailed architectural and engineering design - Eight Percent (8%)
 Construction Supervision (10%)
SCHEDULE OF MINIMUM FEES
Principles to observe:
 When doing work on foreign assisted projects, or in projects where international;
consultants participate, the Civil Engineer performing similar or equivalent work, should
accept compensation that approximates the international standard rates.
 Civil Engineers regularly employed in the private sector shall have a minimum
compensation corresponding to 10% more than the minimum wage prevailing in the
region as basic monthly salary. Civil Engineers employed in the government sector shall
have a minimum basic monthly salary corresponding to appropriate entry positions
provided by the Civil Service Commission.
 A Civil Engineer employed in the private sector who signs and seals the Civil
Engineering plans, specifications and other related documents of a certain project for and
in behalf of his employers shall be compensated with a minimum of 10% of the
professional fee for the project, aver and above the basic monthly salary.

LECTURE 06:
TOTAL PROJECT COST
Total Project Cost
Consists of all costs specific to a project incurred prior to the start-up of facility operation. All
research and development, operating, plant, and capital equipment costs specifically associated
with a project.
Probable total cost is a major concern of the client through the planning design, and construction
phases of a project. The probable total capital cost, often used to establish budgets for a typical
project is made up of:
 Professional Engineering Cost
 Construction Cost
 Legal and Land Cost
 Financial Cost
 Contingency Allowance
Professional Engineering Cost
 A civil engineer is often engaged to make a study and to render a planning report on the
contemplated projects. The study and report phase may include cost for field or traffic
surveys, planning analysis, geotechnical explorations and analysis in addition to the
direct engineering cost
 The coordination, evaluation, implementation, and compliance have increased
correspondingly.
  The implementation of study and report phase is important because it determines the
scope and development of the entire project. Additional surveying and geotechnical
engineering services may be needed during the final design and construction phase.
Construction Cost
Construction cost refers to the overall cost for the development of a facility or an asset.
Estimation of construction cost is a complex process since it involves many variable factors.
Cost in construction can be of tangible costs or intangible costs.
Tangible costs are the cost that can be measured in monetary terms. All the labour, material
costs etc. are an example of tangible costs.
Intangible costs are costs that are difficult to measure in monetary terms. Examples are service-
related cost and goodwill. Costs in construction can be direct costs and Indirect cost.
Direct costs are costs that are directly attributed to a specific project element.
Indirect costs are costs that are not attributed to a specific project element but are indirectly
related to the performance of the project. Direct and Indirect costs can be fixed or can be variable
also.
Legal and Land Cost
These cost includes the issuing of pledges, audits, cost of the land and the interests of the lent
money throughout the construction. And can be best estimated in collaboration with the
customers because they are frequently outside the understanding and control of the Civil
Engineer.
Financial Cost
These costs which include audits, the cost of issuing bonds, land costs, and interest for borrowed
money during construction, are part of the probable total project cost and can be estimated in
cooperation with the client because they are usually outside the knowledge and control of the
Civil Engineer.
Contingency Allowance
Contingencies are downside risk estimates that make allowance for the unknown risks associated
with a project. Typically, contingencies refer to costs, and are amounts that are held in reserve to
deal with unforeseen circumstances.
To provide for intangible costs, contingencies should routinely be added to the basic cost
estimate. It is common practice to add 20% or more to the estimated probable total project cost at
the completion of the study and report phase, reducing this to perhaps 10% at the completion of
final design and perhaps to 5% when the construction bids become known. Larger or more
complex projects may require higher contingencies.