Letter and Spirit' of Sarbanes-Oxley Act
by David Mendes

ALEXANDRIA, Va. -- Construction subcontractors that want to comply with the letter and spirit of the Sarbanes-Oxley Act by disclosing a code of ethics to their clients have a new tool at their disposal: a model code of ethics that they can adapt to create their own codes of ethics. On Sept. 17, 2006, the American Subcontractors Association (ASA) approved the "Model Code of Ethics for a Construction Subcontractor," a document available for download from ASA's Web site, www.asaonline.com.

ASA's model code contains language that subcontractors can adapt to address 11 areas of ethical concern: competition; qualifications; standards of practice; conflicts of interest; public safety; service providers and suppliers; employees; public information; compliance with laws; image of the construction industry; and internal procedures. To help subcontractors tailor the model language to their needs, the model code contains fields where subcontractors can enter their company names.

"Ethics begins at home," said 2006-07 ASA President Stephen Rohrbach, CPC, president of F. A. Rohrbach Inc., Allentown, Pa. "Elevating ethics within our own companies is the most immediate step a subcontractor can take to improving ethics within the construction industry. ASA's model code of ethics provides subcontractors with a tool not just to comply with Sarbanes-Oxley requests for disclosure of a corporate code of ethics, but also to lead the industry by pledging to meet higher ethical standards."

In 2002, Congress enacted the Sarbanes-Oxley Act, which in Section 406 requires public companies to disclose whether or not they have adopted a code of ethics and other disclosures regarding such code. While compliance with this portion of the Sarbanes-Oxley Act is voluntary for privately held companies, some have chosen to follow the spirit of the law by adopting and disclosing a code of ethics. Also, some publicly held companies have required their own service providers and suppliers to disclose their own codes of ethics.

ASA's model code contains language that would be useful to any business developing a code of ethics, but the code also addresses ethical concerns specific to the construction industry. For example, the code includes language addressing the practices of "bid shopping" and "bid peddling"; the ability to perform contracts; job site safety and working conditions; prompt payment of service providers and suppliers; and the image of the industry.

The model code of ethics expands on the standards stated in ASA's "Professional Standards of Practice for Construction Subcontractors," which ASA adopted in 1986. ASA's professional standards of practice encourage responsible conduct through adherence by subcontractors to standards "representing subcontractor obligations which also are sound business practices that prove to be in the enlightened self interest of prudent subcontractors."

ASA's "Model Code of Ethics for a Construction Subcontractor" was developed by ASA's Task Force on Ethics in the Construction Industry.

Founded in 1966, ASA amplifies the voice of and leads trade contractors to improve the business environment for the construction industry and to serve as a steward for the community. ASA's vision is to be the united voice dedicated to improving the business environment in the construction industry. The ideals and beliefs of ASA are ethical and equitable business practices, quality construction, a safe and healthy work environment, and integrity and membership diversity.

Contact: David Mendes
(703) 684-3450, Ext. 1335
dmendes@asa-hq.com