Ethics Bistro

Collusion in the Bidding Process—A Breach of PMI’s Ethical Foundations

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In a recent workplace incident, Pamela, a project team member, conspired with Donald, a representative of an external vendor, to submit a bid with padded estimates. Their intent was to defraud the firm overseeing the procurement process by inflating costs and securing unjust financial gain. This act of collusion is not only unethical; it is a direct contravention and blatant violation of the PMI Code of Ethics and Professional Conduct, which is built upon four foundational values: responsibility, respect, fairness, and honesty.

🔹 Responsibility

Responsibility requires project professionals to own their decisions and uphold the integrity of their roles. Donald’s participation in the fraudulent scheme demonstrates a clear abdication of this duty. Instead of acting in the best interest of the organization and the project, he prioritized personal or external interests. By enabling inflated estimates, he compromised the financial stewardship expected of project professionals and failed to report unethical behavior—a core tenet of responsible conduct.

🔹 Respect

Respect in project management means honoring the dignity and rights of all stakeholders. Pamela’s collusion with Donald disrespected the trust placed in him by his team, leadership, and the broader organization. It undermined the collaborative spirit of the procurement process and devalued the contributions of honest vendors who participated in good faith. Respect also includes fostering an environment where ethical concerns can be raised without fear—something this scenario clearly lacked.

🔹 Fairness

Fairness is the bedrock of any competitive bidding process. It ensures that all vendors have an equal opportunity to win contracts based on merit, quality, and cost-effectiveness. By padding estimates and manipulating the outcome, Pamela and Donald created an uneven playing field. Their actions disadvantaged other vendors, distorted market competition, and potentially led to the selection of a less qualified or overpriced provider. This breach of fairness erodes trust in the procurement system and damages the reputation of the organization.

🔹 Honesty

Honesty is the cornerstone of ethical project management. It demands transparency, truthfulness, and integrity in all communications and decisions. The deliberate inflation of estimates and concealment of collusion are blatant acts of deception. Pamela’s failure to disclose the true nature of the bid and his relationship with Donald violates the expectation that project professionals will act truthfully and avoid conflicts of interest. This dishonesty not only jeopardizes the project’s financial health but also tarnishes the credibility of the individuals involved.

Conclusion: A Serious Ethical Breach

This scenario is a textbook example of unethical behavior that contravenes every principle outlined in PMI’s Code of Ethics. It highlights the dangers of unchecked collusion and the importance of ethical vigilance in project environments. The consequences of such misconduct extend beyond economic loss, such as reputational damage, legal exposure, and / or erosion of stakeholder trust.

Call to Action

It is time for the project management community to take a stand. We must reinforce ethical education, implement robust checks and balances, and cultivate environments where integrity is non-negotiable. Fraudulent behavior like this must be confronted—not with silence, but with decisive action.

Let us recommit to the values that reflect the highest standards of responsibility, respect, fairness, and honesty define our profession. Let us share best practices, strengthen oversight, and recommit to the values that define our profession. Fraudulent behavior must be confronted—not with silence, but with action. Together, we can build a project management culture rooted in integrity.

Questions for the Project Management Community

• How can we strengthen ethical oversight in procurement processes?
• What mechanisms should be in place to detect and deter collusion?
• How do we empower team members to report unethical behavior safely?
• What role should project managers play in fostering a culture of integrity?

References:

Project Management Institute, Inc. (2025). Ethics. pmi.org. https://www.pmi.org/about/ethics

Project Management Institute, Inc. (n.d.). Ethics Guidelines. pmi.org. https://www.pmi.org/about/ethics/guidelines

Project Management Institute, Inc. (n.d.). PMI Code of Ethics and Professional Conduct. pmi.org. https://www.pmi.org/-/media/pmi/documents/public/pdf/ethics/pmi-code-of-ethics.pdf

The January 9, 2025, Bloomberg article titled "The New $30,000 Side Hustle: Making Jobs Referrals for Strangers" by Jo Constantz highlights a disturbing ethical issue and discusses the emerging trend of technology workers earning significant sums by referring job candidates they have never met. This underground marketplace for employment referrals has gained traction at major U.S. companies like Microsoft and Nvidia. Platforms like Refer Me and Refermarket allow job seekers to anonymously request referrals from verified employees, with some tech workers earning up to $30,000 in referral bonuses over 18 months. While this practice can improve hiring odds, it raises ethical concerns as it often violates company policies that require personal knowledge of candidates.

Examining the ethical issue using PMI’s Code of Ethics and Professional Conduct as Ethical Decision-Making Framework, I, as an astute member of the Ethics Insight Team, draw these lessons learned and propose remedies for considerations.

Comments and Lessons Learned:

1. Responsibility: Employees must recognize their responsibility to uphold company policies and ensure that referrals are based on genuine knowledge of the candidate's qualifications. This practice not only maintains the integrity of the hiring process but also ensures that the referred candidates are truly fit for the roles.
2. Respect: Respect for the hiring process and the candidates is crucial. Referring strangers without proper vetting can lead to mismatches and wasted resources for both the company and the candidates. Respecting the process ensures that all parties involved are treated fairly and professionally.
3. Fairness: The practice of selling referrals can create an unfair advantage for those who can afford to pay for them, undermining the principle of equal opportunity. Companies should strive to create a level playing field where all candidates are evaluated based on their merits and qualifications.
4. Honesty: Honesty is paramount in the referral process. Employees should provide truthful and accurate information about the candidates they refer. Misrepresenting a candidate's qualifications can damage the company's reputation and lead to poor hiring decisions.

Remedy: To address these ethical concerns, companies should reinforce their referral policies and provide clear guidelines on acceptable practices. Regular training on the corporate/internal on similar Code of Ethics and Professional Conduct Policy and or Procedures can help employees understand the importance of responsibility, respect, fairness, and honesty in the hiring process. Additionally, implementing stricter monitoring and enforcement mechanisms can deter unethical referral practices and ensure a more transparent and equitable hiring process.

How would you, as an ethical project practitioner, act when a stranger offers monetary incentives and seeks your referrals? Does the situation happen to you? Are there any other lessons learnt and remedies to which you can relate? The PMI Ethics Insight Team likes to bring this timely topic for a healthy deliberation.

References:

Constantz, J. (2025, January 9). How to Get a Job Referral from a Stranger. Bloomberg.com. https://www.bloomberg.com/news/articles/2025-01-09/how-employee-referrals-for-tech-jobs-became-a-side-hustle

Project Management Institute. (n.d.). Code of Ethics and Professional Conduct. pmi.org. https://www.pmi.org/-/media/pmi/documents/public/pdf/ethics/code-values-card.pdf

Project Management Institute. (2011). PMI Ethical Decision-Making Framework (EDMF). pmi.org. https://www.pmi.org/-/media/pmi/documents/public/pdf/ethics/ethical-decision-making-framework.pdf