Competitive Information Policy at Pratt & Whitney Like everything else in the world, there's a line you should not cross. You should know where the legal line is. Hopefully, it isn't too far from your personal sense of right and wrong. UTC Employee Jack Egan, senior vice president for Environmental and Business Practices at United Technologies Corporation (UTC), was eager to complete a policy clarification circular on competitor information gathering. He felt UTC owed its employees some guidance in this sticky and controversial area which had been a topic of discussion ever since the company's adoption of its written Code of Ethics nearly two years earlier. Although the Code and companion Question and Answer booklet contained only brief entries on competitor information, their distribution had had a significant impact on the quantity of competitor information coming into the company, particularly into the Pratt & Whitney commercial aircraft engine division. (See Exhibits 1 and 2.) Questions concerning competitor information had flowed into Egan's office and into the company's network of Business Practices Officers. Now, after numerous discussions, meetings, and workshops, Egan had assembled corporate counsel from headquarters, Pratt & Whitney, and Carrier to review a draft policy circular interpreting the Code's provision on competitive information. As members of the group took seats around the conference table on a chilly November afternoon, Egan turned the meeting over to Paul Benik, associate general counsel. Benik explained the general approach behind the draft policy circular. We're trying to give people some guidance in methods of acquiring competitor information. Because there's no single, accepted understanding of what constitutes \"proprietary\" information, we concluded it's too difficult to try to sort out what is and is not proprietary. We've focused the guidance on how the information is acquired. Under the Code of Ethics, our policy is that we will use only methods that are lawful. By \"lawful,\" we mean more than \"not illegal\"for example, we look to private agreements as a source of law. And our standard turns on whether conduct is lawful, not on whether somebody is likely to be caught or on some assessment of the acceptability of the consequences of being caught. Egan looked around the table: But why should the law be our only standard? In other parts of the Code we go beyond the law. Why is this any different? If the law is the only thing that's relevant, then we don't need this document. We need a legal treatise. And I'd be embarrassed to put out a legal treatise. I also know that's not what the chairman [of UTC] wants. We must stay far away from unlawful conduct, and if there's any doubt at all, we should take a conservative position. Don Patten, Pratt & Whitney's vice president and general counsel, expressed doubts: Why should we always opt for the most conservative position? We're talking about the ethics of the marketplace. Historically, we know our competitors have information about us. You're asking our employees to restrict themselves in ways our competitors do not. That will put us at a competitive disadvantage. We don't want to tie our people's hands in this sort of environment. Benik spoke up: \"In fact, this clarification circular is little more than the law. It was meant to go just a little beyond.\" \"Well,\" said Patten, \"I think it goes miles beyond the law. It could be read as preventing us from getting anything but public documents. I'm not sure we should issue this circular.\" (See Exhibit 3.) Background UTC Based in Hartford, Connecticut, UTC was a diversified multinational manufacturing company with nearly 200,000 employees and some $21.4 billion in revenues in 1990. (See Exhibit 4.) UTC's major business units included familiar names such as jet engine company Pratt & Whitney and Carrier, maker of heating and airconditioning systems. Each was a leader in its industry. Almost half of UTC's revenues came from the aerospace and defense sectors, including commercial and military jet engines and helicopters and related maintenance services and products. A little over onethird came from heating, ventilating and air conditioning (HVAC) equipment for commercial, industrial and residential buildings, as well as elevators, escalators, and related maintenance services and products. The sale of automobile parts accounted for the remainder. (See Exhibit 5.) UTC's international businesses generated more than half of 1990's revenues. In 1991, UTC was facing a difficult environment. Consolidations and cuts in defense spending, a domestic recession with an especially hardhit commercial real estate industry, and increasing competition worldwide were taking their toll. In addition, fewer airlines worldwide were buying new planes, and spare parts sales were down 30% because older aircraft were being retired.1 As a result, in October analysts were expecting 1991 profits of only $321 million.2 In response, UTC was cutting costs and staff and reorganizing to become more efficient in developing, manufacturing, and selling its products. Its efforts were guided by its commitment to technology, which it saw as the key to its future success. The Ethics Initiative In January 1990, UTC issued its first formal Code of Ethics and created a worldwide network of Business Practices Officers (BPOs) to help implement it. As head of the compliance program for the government contracting side of UTC's business since 1986, Jack Egan had argued for a companywide ethics effort. The federal government's \"Ill Wind\" investigation of defense contracting irregularities, the scandals on Wall Street, and the general concern with ethics in American institutions had all contributed to his sense of urgency. An engineer by training, Egan had served UTC in a variety of capacities over 37 years: as chief operating officer of UTC's building systems company, president of Pratt & Whitney's Government Engine Business in Florida, head of Pratt & Whitney's Washington office, as well as several years early in his career as an experimental test engineer. Once the idea of an ethics code was approved by UTC chairman and CEO Richard Fletcher, Egan began his work in earnest. He researched the ethics programs at some 30-35 companies similar in size and scope to UTC and enlisted the assistance of former Senator Howard Baker and his law firm. Egan noted, \"As someone who had survived politics without an ethics problem, Baker was a natural.\" Egan drafted a Code that was in part a compilation of the unwritten principles and precepts that had governed UTC since the 1920s, but also attuned to contemporary issues such as drugs, the environment, and diversity. Fletcher established two criteria for the Code. It had to be understandable by the average employee, and it had to be applicable to business worldwide. An explicit provision addressed differences in practices and customs that managers would inevitably face in international business (Exhibit 6). Political and religious matters were deliberately excluded, and a decision was made not to address \"relative worth\" issues, AIDS in the workplace, or disinvestment for other than business reasons. Drafts of the Code were circulated to various employee groups. Before the final draft, Baker interviewed all of senior management on their values and thoughts about the program and prepared a report recommending adoption of the Code and the plans for communicating and implementing it. CEO Fletcher endorsed the program and gave Egan responsibility for implementing it. Administratively, Egan reported to the EVP and general counsel, but he met frequently with Fletcher, and twice a year he reported to the board of directors. Egan described the goals of the program. \"We want to operate at the highest possible ethical level. The Code is not supposed to tell people what to do in every situation. It is designed to create a thought process, one that goes beyond 'Do what's legal.' For example, you are the manager in charge of building a plant in a country where there are no legal requirements for environmentally sound waste disposal. Should you dump waste into a stream that is already polluted? The Code won't tell you the answer. We want the manager to recommend what's best under the circumstances and to get approval at a higher level. We don't want people just to look at the law.\" In January 1990, the Code and a companion booklet of questions and answers were translated into eleven languages and distributed to the corporation's 200,000 employees. Fletcher introduced the Code and BPO network to UTC employees via a teleconference beamed to eleven North American locations. Fletcher began his presentation by noting a change in the ethical standards expected of business. \"What was once normal, is now being questioned,\" he told employees. He stressed the importance of having a single code applicable worldwide to provide comprehensive, cohesive guidelines for employee conduct. A tough code, he said, was an asset that would help the company earn trust. He made it clear that employees who ignored the code were putting their jobs at risk and could even go to jail. But he also noted that the Code and the network of Business Practices officers provided help and protection for employees. He concluded by pointing to strong ethics as a source of competitive advantage. Fletcher's message was taken to London where the ethics program was introduced to the corporation's Europeanbased Business Practices Officers in July 1990 and to Singapore and the Far East BPOs in September 1990. Egan aimed to include an ethics component in all the company's management training programs and contracted for the design of a special workshop, \"Ethics in the Workplace,\" for firstline supervisors and middle managers. The 72 Business Practices Officers, one at each major location worldwide, had the task of staying abreast of all changes in corporate policy and responding to employee inquiries about the application and interpretation of the Code. Most spent some 10%-15% of their time on BPO activities. Only executivelevel employees were chosen as BPOs, and all enjoyed the trust of operating management. Because of potential conflicts of interest, lawyers and human resource personnel were not permitted to serve. In addition to consulting a Business Practices Officer, employees could also call the corporate ombudsman to ask questions or to lodge concerns about violations of the Code as well as other issues. In addition, a confidential written communication system called DIALOG was made available to employees seeking advice about ethics. Employee Responses Employee reactions to the new program varied. Some saw it favorably, citing its value in setting a tone and communicating the company's standards of conduct. \"This [ethical question] is something I just never thought about before,\" said one. Others saw the program less as a help to employees and more as a tool to strengthen the company's reputation and protect top management in case of wrongdoing by lowerlevel employees. For these employees, the program was all about risk management: \"The Code was introduced so we don't find ourselves in a humongous lawsuit.\" Some saw the program as inconsistent with the company's effort to push decisions downward and to encourage more participative management. Still others expressed indifference: \"It doesn't matter. People will act the same way whether or not there is a program.\" Critics noted the difficulty of writing rules for all circumstances and pointed to the potential impact on management's discretion in dealing with violations. One employee explained, \"A few years ago the corporation was concerned about pilfering. So they issued a very strict policy. Shortly thereafter a secretary was caught taking home one pad of paper. They had to fire her. They left themselves no choice. The Code might work the same way.\" Competitor Information at Pratt & Whitney The Code had a noticeable and immediate impact on the competitor information flowing into Pratt & Whitney's Commercial Engine Business, one of its two major operating units. The other, the Government Engine Business, was governed by highly detailed federal procurement rules promulgated by the U.S. government. These rules were strictly adhered to and included proscriptions on accepting certain types of competitor and government confidential information. Highly regarded within UTC and a major source of revenues and profits, the Commercial Engine Business marketed jet engines and provided customer support to commercial air carriers around the world. As of December 1990, P&W jet engines powered some 6,250 commercial aircraft for approximately 550 domestic and foreign airlines and other carriers.3 Pratt's most powerful commercial engine was the PW 4000, which accounted for a total of $7.3 billion in 1990 orders from customers such as United Airlines, Singapore Airlines, and Japan Air System. P&W had more than 50 customers for the PW 4000, which powered every widebody aircraft (such as the stateoftheart Boeing 777 twin jet) in production and planned for production. Although the division's primary customers were airlines, P&W worked closely with airframe manufacturers such as Boeing, McDonnell Douglas, and Airbus which designed and manufactured the aircraft incorporating its engines. Through joint ventures with foreign partners, P&W sought to penetrate international markets, particularly European markets where customers such as the four nation Airbus consortium preferred to purchase from European firms. Industry Competition P&W's major competitors were General Electric of the United States and Rolls Royce of the United Kingdom. Despite the small number of competitors, competition for orders was keen, and concerns about the industry's longterm ability to support more than two jet engine makers were widespread. Price competition was sometimes so intense that Pratt looked to the spare parts business following on a sale as the real source of profits. Even there P&W faced sharp price competition from independent spare parts manufacturers, and quality improvements were reducing the need for spare parts. Industry competition was largely driven by the airlines, most of which initiated a competitive bidding process. In a typical situation, an airline would announce its intention to buy, and then the airframe manufacturers would work with the engine companies to develop a proposal and bid. Sometimes, however, the airline might choose the engine first, before the frame. Some competitions were highly structured and governed by complex sets of rules and requirements for both the competition and the finished product. For example, American Airlines typically sent out a 30- 40 page \"term sheet\" laying out specific requirements in great detail and typically stating that bids would be held in strictest confidence. Other competitions were very informal\"We need a plane, what can you do for us?\"and were concluded on a handshake. Customer sophistication was also quite variable. In one competition, a Japanese airline had required each competitor to submit masses of highly detailed information about its own offering as well as its views of the competitors' product. This customer helped P&W correct its misperceptions of competing products and better evaluate its own strengths and weaknesses. Other airlines relied much more on the engine manufacturers' own assessments of their products, though they might seek suggestions about what questions to ask other bidders. The buying cycle for a commercial engine was very longon average, four years. Airframe and engine companies spent approximately three of those years building relationships and trying to understand the airlines' fleets, their quirks, and anticipate their needs. Information flowed very freely during this period. Throughout the process airframe and engine companies worked together closely to insure technical compatibility of their products and to develop bids and proposals for competitions. It was necessary to share confidential and proprietary information both with airframe companies and with customers. In some cases, specific confidentiality agreements covered information P&W gave to airframe makers and airlines, but P&W employees saw much variation in the respect accorded these agreements. The stakes in each competition were high. One 1990 order, then the largest ever, by United Airlines for the PW 4000 was expected to generate $4 billion over the course of the contract. Engines for a single Boeing 747 were worth $30 million. The risks of committing to new development programs were proportionately higher. The Role of Competitor Information Systematic competitor information gathering was a relatively recent phenomenon at P&W. Prompted by the loss of market share and by competitors using inaccurate data in marketing packages that slammed P&W products, Pratt managers decided to set up a competitor information network. As one manager explained, \"We didn't get involved before because we thought we were the cream of the crop.\" The competitor information network From January through late 1989, a 10person team, including one lawyer, met weekly to design a competitor information system. After carefully evaluating the existing business processes, information requirements, and information flows, the group developed a team approach, using a directory of owners and a network for collecting and disseminating financial, technical, support, and strategic competitor information. Members of the network receiving information or collecting it in the field could pass it on to their supervisor and the network head or other designated recipients who would, in turn, distribute the information to those who needed it. Uses of competitor information Opinions about the value of competitor information ran the gamut from those who thought it was slightly \"sleazy,\" unnecessary if you really had a better mousetrap, to those who thought it was so essential that the company should accept \"anything that wasn't nailed down.\" Most were somewhere in the middle: \"We use the information for marketing purposes, to improve our product, to make as much money as possible. Information won't make the difference between winning and losing, but it will help.\" \"The type of information we try to gather,\" observed one executive, \"is information that will be useful in marketing. If a competitor's engine had problems in a test run, we want to know. We want to inform the customer so that the customer will demand better performance from the competitor.\" Another executive mused, \"I sometimes think we are overly concerned with the competitor. We have to avoid a tendency to say, 'Me too, let's do what they are doing.' We shouldn't do that, but we should be broadminded enough to take a look and assess what they are doing. We don't want to make a carbon copy of our competitor's product, but we have to avoid the 'not invented here' mentality.\" Types of useful information Almost any kind of competitor information was considered useful, but certain classes were particularly valuable. For example, information about a competitor's offerings in an active campaignpricing strategy and price discounts, financial packages, warranties and guarantees, the structure of the dealmight make the difference between winning and losing. General technical information on engineering improvements, design problems, and fuel burn performance was also very valuable for marketing purposes as well as for research and development planning. Knowledge that the outlet temperature of a competitor's turbine was too high, for example, could be useful to the marketer since outlet temperature was related to engine durability. Durability, in turn, affected operating costs, an important selling point for jet engines. Other types of cost data, particularly fuel consumption and maintenance costs for replacing hardware, repairing parts, and remaining safe and airworthy, were very desirable, too. Information about the emergence of new competitors and new technologies was helpful to strategic planners concerned with longerterm developments and changes in the industry. Sources of competitor information Aside from public documents and data bases, two channels for receiving information stood out above all others: the sales and account reps involved in marketing to the airlines; and the field reps and product support people permanently stationed at airlines' and airframe manufacturers' facilities. Although customersboth airlines and airframe manufacturerswere the number one source of information, the degree to which they shared competitor information varied widely. In comparison with U.S.based airlines, which rarely shared information about competing proposals, other airlines often in developing countrieswould put representatives of the three competing engine makers in a room, hand everyone copies of all the proposals, and ask who could do the best deal. When airlines shared competitor information, it could be for any number of reasons. Some would leak information about a bid (at times without regard to confidentiality agreements) in order to obtain a price concession or get the best possible product offering. In an effort to protect its own information, P&W customarily affixed a standard \"proprietary\" designation on documents given to customers, even if there were no confidentiality agreement in effect and even if the airline were not likely to honor it. \"When you prepare a proposal, you don't know what they will do with it.\" Nor, as one manager explained, could you mention this problem: \"It would be an insult to their integrity.\" Managers were generally skeptical of competitor information offered to them by the airlines: \"You have to consider whether the information is legitimate or just the customer's effort to get more from you.\" Other sources of information were also important. Engineers and technical employees often gathered valuable information from technical sessions and conferences where papers were delivered. Others scanned publications such as maintenance manuals, spare parts catalogs, and the like. Marketing reps encountered competitors' reps in the field. Sometimes a competitor would help out in a twoway competition in which it was not involved. Suppliers were another source. Government reports such as those filed for independent research and development funding were also valuable. How much of this valuable information was in the public domain was unclear. P&W employee estimates varied from 99% to 10%-15%. Commenting on the public availability of information, a P&W lawyer recalled a lawsuit filed by GE against Motorenund TurbinenUnion (MTU), a subsidiary of DaimlerBenz, when DaimlerBenz and P&W announced an alliance to work on developing engines for the future. GE, which had also discussed a possible alliance with MTU, was concerned that MTU would transfer GE trade secrets to P&W. \"We took everything we had on the subject engineall gathered from public sourcesand found that everything GE alleged was a trade secret was available in public documents.\" Competitors were also knowledgeable about Pratt. \"If we have a problem, say a turbine failure, our competitors know within 24 hours. It may come out in the paper. We don't know how they get it,\" said one manager. Another, an avid gatherer of information, cited one of his \"best moments\": \". . . a few years ago when a highranking employee at a competitor flashed a copy of my report about his product at the end of a talk to his sales crew. He said it was all true and wondered how I got the information.\" P&W had not attempted to assess the bottomline impact of the competitor information network. Impact of the Code of Ethics With the announcement of the Code of Ethics, the number of documents and electronic messages received by P&W's newly created competitor information network decreased markedly. At the same time, inquiries about the Code and how it applied to competitor information gathering flowed into Egan's office. \"The competitor information policy was probably intended to straighten out a problem but it didn't do anything to straighten out the line between right and wrong,\" observed one employee. \"People were hearing conflicting messages from legal and headquarters.\" Another commented, \"The Code as written made things tougher. The law says you shouldn't take information that is proprietary to a competitor, but management didn't do a good job of defining what's 'proprietary.' The problem is people cannot determine from the Code whether their behavior is ethical or not. This is an area where there is a whole lot of grey. Many people just said 'I'm not going to take the risk.'\" Some employees were put off by \"how things were presented\" and the implicit message that the company \"was not going to stand behind you if you made a mistake.\" Drawing Lines in the Field In an effort to address the concerns raised by employees, Egan held discussion sessions and workshops where he was asked a number of hypothetical questions. 1. Should you accept a consultant's offer to give you a competitor's prices? 2. Can you call a competitor to get information? 3. What if you are a sales rep, and an airline offers you a copy of a competitor's proposal? a competitor's presentation documents? 4. What if you are a sales rep visiting an airline during a campaign, and the airline employee leaves you in the office alone with your competitor's proposal in plain view on his desk. May you look? 5. What if you are a field rep, and the airframe company employee offers you competitor bidding information during an active campaign? copies of specifications for a new turbine component? fuel burn data on a competitor's engine? 6. Can you ask a new employee who formerly worked for a competitor for information that might be confidential? 7. The airlines have computerized maintenance records on competitors' engines. Is it okay to tap into these databases? A complicating factor was confusion about the definition of proprietary information. Some employees felt the term \"proprietary\" had become essentially meaningless through overuse. Companies would mark information \"proprietary\" and then hand it out at industry association meetings. In principle, proprietary information of competitors was off bounds, but in practice, it was hard to decide what was proprietary. One employee asked rhetorically, \"Suppose there is a GE turbine failure on the wing of a JAL aircraft. Is that proprietary? GE would want to consider it confidential. But does that mean we should treat it as confidential?\" Presentation documents, contracts, marketing proposals, bids, specifications for engine components were viewed differently by different people. Some felt that any information was fair game so long as it was freely offered to them. Others felt it was acceptable to take any information a competitor should have expected would be passed on. Still others defined certain categories of informationpricing information and chemical formulas, most commonlyto be offbounds. Next Steps Questions raised by employees at P&W persuaded Egan that the company should provide some guidance beyond the Code of Ethics and Q&A Booklet, and some employees themselves had voiced a desire for more guidelines. Said one, \"I don't fully understand the situation or the law, and I'm sure my friends out in the field don't either. It's unfair not to inform them. And it shouldn't be by memo. Egan's office should visit them personally.\" Paul Benik wondered how detailed such guidance should be. He was concerned that too many rules would invite a search for loopholes. One employee suggested the company should educate employees about the \"black, white, and grey areas,\" and then leave it up to the individual to make a decision in the grey areas. But not everyone agreed that a clarification circular was desirable at all. \"We don't need this circular,\" said Pratt's representative. \"Our industry was working well and has worked this way for decades.\" He felt it would be impossible, and perhaps counterproductive, to formulate useful guidelines. Exhibit 3 Gathering Competitive Information (Draft 10/4) Introduction The UTC Code of Ethics recognizes that gathering and using information related to competitors is an accepted and routine business practice. The Code provides, however, that competitive information will be sought only when there is a reasonable belief that both receipt and use of the information is lawful. What exactly is \"competitive information\"? \"Competitive information\" includes anything related to a competitorfor example, information related to products, markets, pricing, or business organization. Some of this information would be widely available from public sources, but other information would be considered \"proprietary,\" \"business confidential,\" or \"trade secret,\" (this circular will use the label \"proprietary\") which a business would attempt to hold closely. There is no single standard used by businesses for determining what is proprietary; definitions vary by industry and indeed from enterprise to enterprise; some consider that all business information is proprietary. What competitive information may I gather? As a general proposition, UTC will respect a competitor's reasonable expectations of protecting proprietary information. However, because there is no single standard used for determining what is proprietary, the process of information gathering is key. In other words, how the information is gathered in most cases will reveal whether it is proper to receive and use the information. From one extreme, information gathered from published sources clearly is permitted. At the other extreme, a \"Watergate\" style breakin is never permitted. While in the process of gathering information, follow two principles 1. Do not induce a person to betray a trust by offering or giving a gift or by offering or alluding to some prospective employment or business opportunity. 2. Do not intrude on reasonable expectations of privacy or confidentiality. Applying the Principles Businesses are, of course, expected to take steps to protect information which is considered valuable. A business which does not take steps to protect its information cannot reasonably expect others to do so. A competitor should not have a reasonable expectation of privacy when conversing in a public place. Likewise, a competitor will understand that this price will be revealed by a prospective customer who uses auction techniques in conducting competitions. In analyzing a possible course of conduct, ask yourself questions such as the following: 1. What is the position of the person from whom I would receive information? Would sharing the information likely violate an employment agreement or an agreement with a third party regarding protection of the information. If so, don't do it. 2. Have I done anything which subtley coerced somebody to share information? Have I, for example, intimated to a supplier that future business opportunities will be influenced by receipt of information with respect to a competitor? Am I seeking proprietary information held by a newly hired employee by attempting to exploit that employee's natural desire to win favor with the company? If so, don't do it. 3. Am I in a place where I shouldn't be? If, for example, I am a field representative with privileges to move within a customer's facility, have I gone outside the areas permitted? Have I misled anybody in order to gain access? If so, don't do it. 4. Is the contemplated technique for gathering information invasive, such as sifting through trash or setting up an electronic \"snooping\" device directed at a competitor's facility from across the street? If so, don't do it. 5. Have I misled somebody in a way that the person believed sharing information with me was expected? Have I, for example, called and represented myself as a government official who was seeking information for some official purpose? It so, don't do it. In seeking examples beyond the flat prohibitions against bribes and theft, it is not possible to prepare any definitive catalog or listing of improper techniques. It is imperative to use good judgment and common sense. UTC's mandate of a \"reasonable belief\" that it would be lawful to receive and use information is intended as an objective standarda personal belief is inadequate the circumstances must be such that the belief is reasonable. Moreover, whether the information has any utility or value to UTC (indeed, whether or not the information is used) is immaterial in determining whether receipt was proper. What if information is marked proprietary? A proprietary stamp, mark, or legend is a notice indicating that someone believed the information was valuable and should be protected. Proprietary markings are very significant in doing business with the U.S. government because there are strict rules governing the receipt of information and criminal penalties for violations. Don't accept any portion of a competitor's bid or proposal, and don't accept any document with the legend \"Source Selection InformationSee FAR 3.104.\" In circumstances not falling under the strict rules of the government procurement process, the significance of proprietary markings is less clear. Because there is no single standard for determining what is proprietary, these markings are sometimes used indiscriminately. The presence (or absence) of markings does not conclusively answer the question of whether information is in fact proprietary. Even if the information is proprietary, the person sharing it may have authority to do so. Follow the principles enunciated in this circular, concentrating on the process of information gatheringdon't induce a breach of trust and don't intrude on reasonable expectations of confidentiality and privacy. Pay particular attention to the nature of the information and the authority of the person from whom you might receive it. How do these guidelines apply to consultants? The guidelines apply in all respects. UTC will not use a consultant in a manner inconsistent with the Code of Ethics. For additional information, refer to UTC's policies and procedures for the \"engagement of Consultants.\" Giving business gifts is commonplace, but you say to avoid those which create a conflict of interest. What are the guidelines for distinguishing appropriate from inappropriate business gifts? UTC policy generally permits giving business gifts which are reasonable they must be reasonable in value, reasonable in frequency of occurrence, and reasonable under the totality of the circumstances. For additional information, refer to the Policy Clarification Circular, \"Conflicts of Interest: The Giving and Receiving of Business Gifts.\" What are the rules regarding competitive information in our business relationships with the U.S. government? Relationships (and conducting business) with both the Executive and Legislative Branches of the U.S. government are tightly controlled by laws and regulations. Proprietary information of a competitor and government source selection information are protected under the \"Procurement Integrity\" provisions of the Office of Federal Procurement Policy Act (41 U.S.C. 423, implemented in the Federal Acquisition Regulation (FAR) in 3.104). This statute identifies categories of information (e.g., a competitor's proposals and the government's evaluations of the competition) which are improper per se to receive or possess during the conduct of an agency procurement. The penalties (criminal, civil, and administrative) for violations are severe. For additional information, refer to UTC's procedure on \"Procurement Integrity.\" What's the impact of other laws? Sharing business information with competitors may violate antitrust laws. Improperly receiving a competitor's information may be actionable at law as an interference with a contractual relationship, commercial bribery, or violation of trade secret. Where can I get additional help? If you need additional guidance, consult the Business Practices Officer or counsel at your business unit