Under-designed Footings, a Friday Deadline, and a Bonus
You are a licensed PE at a 40-person structural firm. On a warehouse project, a junior engineer sized the shallow footings using a saturated soil unit weight of 15.0 kN/m³ taken from an early geotechnical draft. The final geotechnical report, issued two weeks ago, gives 18.5 kN/m³ and a higher design groundwater elevation. The effect is roughly a 19% under-prediction of effective overburden, and the footings were detailed at 1.2 m embedment where your own check gives 1.8 m. The contractor has mobilized, a purchase order is issued, and the client's project manager tells you a redesign will cost about USD 140,000 and three weeks of schedule. He proposes proceeding as designed, monitoring settlement monthly at USD 15,000 per year for four years, and under-pinning in year 4 for an estimated USD 260,000. He also offers your firm a USD 25,000 bonus if you seal the drawings by Friday. Your firm's MARR is 7%.
1. What are your obligations regarding sealing the drawings, the client's bonus offer, and the project manager's proposal to proceed and monitor? State the specific actions you take.
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Do not seal the drawings. A PE's seal certifies responsible charge and technical adequacy, not schedule convenience. You now know the design is inconsistent with the governing geotechnical report, so signing would misrepresent the work and put the structure and its occupants at risk. Public health, safety, and welfare take precedence over the client's schedule and your firm's fee.
Decline the bonus. A payment conditioned on a specific engineering conclusion is a contingent arrangement that compromises independent judgement and is a conflict of interest. Document the offer and your refusal.
The monitoring proposal is a design decision, not a schedule workaround. Settlement monitoring does not cure inadequate embedment against bearing, sliding, or frost/groundwater effects. You may only accept it if an engineer of record performs and documents a check showing 1.2 m satisfies capacity and serviceability with the revised soil parameters - which your numbers do not support.
Actions: (1) Issue a written notice to the client and your principal describing the error, its basis, and its safety significance; (2) formally revise or withdraw the earlier memo rather than adding a note; (3) escalate to the engineer of record within the firm; (4) if overruled, refuse to seal and pursue internal and, if necessary, external notification; (5) keep a contemporaneous record of all communications.
2. Compute the present worth of both options at a 7% MARR and recommend one, stating the assumptions behind the comparison.
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Use the client's MARR of 7% and a four-year horizon (the retrofit occurs at the end of year 4).
Option A - redesign now: PW = USD 140,000 (incurred now, no discounting).
Option B - proceed, monitor, retrofit: Monitoring: 15,000 × (P/A, 7%, 4) = 15,000 × 3.3872 = USD 50,808 Retrofit: 260,000 × (P/F, 7%, 4) = 260,000 × 0.7629 = USD 198,354 PW_B = 50,808 + 198,354 ≈ USD 249,200
Option A is cheaper by about USD 109,000 in present-worth terms and eliminates schedule and structural risk. The comparison is conservative toward Option B because it ignores: possible escalation of retrofit cost beyond estimate, business interruption during under-pinning, the chance the retrofit is infeasible after the slab and racking are in place, and the firm's liability exposure for a known deficiency.
Assumptions to state: costs are certain and in today's dollars; the 7% rate reflects the owner's time value of money; no salvage or residual value; retrofit is technically feasible in year 4. Break-even check: the retrofit would have to cost less than (140,000 − 50,808)/0.7629 ≈ USD 117,000 for Option B to win - well below the estimate.
3. The client asks for the comparison in annual-worth terms and wants to know whether a 12% MARR changes the answer. Show both.
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Annual worth at 7% - divide each present worth by (P/A, 7%, 4) = 3.3872, equivalently multiply by (A/P, 7%, 4) = 0.2952: AW_A = 140,000 × 0.2952 ≈ USD 41,300/yr AW_B = 249,162 × 0.2952 ≈ USD 73,600/yr Same ranking, same ~USD 32,300/yr advantage to Option A.
At 12% MARR: (P/A, 12%, 4) = 3.0373; (P/F, 12%, 4) = 0.6355 PW_B = 15,000 × 3.0373 + 260,000 × 0.6355 = 45,560 + 165,230 ≈ USD 210,800 PW_A = USD 140,000
A higher discount rate penalizes deferred costs less, so Option B improves in relative terms - but 210,800 is still well above 140,000. The recommendation is unchanged, which is the useful finding: the decision is robust to the discount rate, not an artifact of the 7% assumption. Present the result as a range rather than a single point, and note that the ethical conclusion (no sealing a known deficiency) is independent of any economic comparison; the economics only informs how the client remedies the problem.