(Covering U.S. Federal, State and Local Governments and their Contractors) 1. Introduction Anixter is a proud supplier of goods and services to the federal, state and local governments. When conducting business with the government, we operate with the highest ethics and integrity and in accordance with all applicable laws and regulations. We also follow Anixter s Global Business Ethics and Conduct Policy in all of our dealings with the government and government contractors. 2. Purpose This Global Government Contracts Policy (the Policy ) provides specific guidance for meeting our ethical and legal obligations as a supplier to the government and includes guidelines on: Providing gifts or entertainment to government employees or government contractors; Accepting gifts or entertainment from government employees or government contractors; Hiring government employees; Substituting products; Handling procurement sensitive information; Employing third-party consultants; Avoiding organizational conflicts of interest; Doing business with disadvantaged business enterprises; and Reporting misconduct and retaliation. 3. Scope This Policy applies to Anixter International Inc. and all of its worldwide subsidiaries, affiliates, directors, officers, employees and contractors (collectively, Anixter, we, or us ). 4. Definitions For purposes of this Policy, the following terms shall have the following meanings: 4.1. Gift means any gratuity, favor, discount, benefit, entertainment, hospitality, loan, political contribution, commission, or other tangible or intangible item having monetary value. A gift includes services as well as promotional items, training, transportation, airfare, lodging or meals, whether provided in-kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred. A gift also includes, but is not limited to, the promise of future employment, tickets to sporting or cultural events, presents, or the use of our time, materials, equipment or facilities. Training, discounts and similar arrangements offered as part of a contract s terms and conditions are not considered gifts in this context.
NOTE: For purposes of this Policy, a gift offered or given by an Anixter employee to a relative, significant other (e.g., domestic partner), charity, political party or other organization designated by a person with whom we have a business relationship shall be considered a gift offered or given directly to the individual with whom that business relationship exists. Similarly, a gift is considered offered or given directly to an Anixter employee if the gift is offered or given to the employee s relative, significant other, charity, political party or organization designated by a person with whom we have a business relationship and because of the employee s position with Anixter. 4.2. Government means the United States federal government or any state or local government within the United States, and includes any: political subdivision, agency, instrumentality, school district or educational institution funded in whole or in part by the United States federal government, one of the fifty states or the District of Columbia; Indian tribe, nation, or other organized Indian group or community; or county, municipality, township, district (including local government schools, public transit systems and redevelopment authorities) or independent school district authorized by state charter or constitution. 4.3. Government contract means any contract between a government and another person or entity, or any subcontract with a government contractor. 4.4. Government contractor means any person or entity (including all employees of such entity) that is awarded a government contract or offers to sell goods or services under a government contract. 4.5. Government personnel means all officers, officials or employees of the government. Government personnel includes any person or entity (and all employees of such entity) who are retained by the government as a consultant under a government contract. 5. Illegal Gifts and Bribes This section provides guidance on the gifts that we may offer, promise or provide to (or solicit or accept from) government personnel and government contractors, and identifies when a gift may constitute an illegal bribe in violation of applicable laws. 5.1. Government Personnel We never offer, promise, provide or attempt to provide gifts to government personnel. Conversely, we never solicit, accept, attempt to accept or agree to receive gifts from government personnel. While gifts motivated by a personal relationship may appear to be acceptable, they can give the impression to others that we intended to influence government personnel. For this reason, Anixter prohibits gifts of any kind to or from government personnel. 2 of 11
5.2. Government Contractors We may provide gifts of reasonable value to, or accept gifts of reasonable value from, government contractors in support of business activities provided that the gift does not violate: The standards of conduct of the government contractor s organization; Any contractual requirement between Anixter and the government contractor; Anixter s Global Travel & Expense Policy, including without limitation Anixter s prohibition against giving or receiving gifts of cash or giving gifts that are considered lavish or extravagant; and Any applicable laws or regulations, including, without limitation, the U.S. Anti- Kickback Act of 1986. We may not: Provide, attempt to provide, promise or offer gifts to government contractors in exchange for obtaining a government contract or receiving favorable treatment in connection with a government contract; or Solicit, accept, attempt to accept, or agree to receive gifts from government contractors in exchange for awarding a government contract or favorable treatment in connection with a government contract. These types of gifts are considered illegal bribes in violation of various laws, including the U.S. Anti-Kickback Act of 1986. A kickback is a type of bribe in which the benefit is favorable treatment in connection with a government contract. To avoid being held liable for illegal bribes to government contractors, we do not offer or provide a gift if the gift would improperly influence or even give the appearance of influencing a government contractor s treatment of Anixter in connection with the award of, or the performance of, a government contract. Similarly, we do not accept a gift from a government contractor if the gift would influence or even give the appearance of influencing Anixter s treatment of the government contractor in connection with a government contract. We never solicit gifts from government contractors. When in doubt, we contact Anixter s Legal Department. 6. Hiring Government Personnel We seek the advice of Anixter s Legal Department before discussing possible or actual job opportunities with current or recently employed government personnel. We never engage in employment-related discussions with government personnel who are currently or recently involved in pending or active contracts with Anixter. Before discussing employment opportunities at Anixter with current or recently employed government personnel, we obtain a full disclosure regarding their work for the government in order to determine whether they are subject to any restrictions that prevent them from working for Anixter in the capacity in which they are being considered for hire. 3 of 11
7. Product Substitution and Quality We take care to supply products in accordance with the specifications of the government and do not use substitute components where substitutes are not permitted. If the government contract allows us to substitute products, materials or labor, we document each substitution that we make and disclose the information to the government. We provide quality products that meet the standards required by the government or government contractor. When performance/quality tests are required by the government or government contractor, we perform the tests as contractually specified unless the customer agrees in advance to modify the government contract in writing. 8. Procurement Sensitive Information We do not obtain or attempt to obtain procurement sensitive information from the government or a third party. Procurement sensitive information is information that has not been previously made available to the public or disclosed publicly concerning: Bids or proposals of other government contractors, such as their prices and costs submitted in response to a government solicitation or invitation for a bid, or proprietary information about their manufacturing processes, operations or techniques; or Evaluation criteria, plans and data used by the government to determine its needs, evaluate contractor proposals and decide which company should be awarded the government contract. Accordingly, we refrain from communicating with government personnel during a procurement except through acceptable channels established by the government. We immediately contact Anixter s Legal Department if we receive procurement sensitive information, even if obtained accidentally (e.g., via a misdirected fax or email). 9. Agreements with Consultants We exercise care in selecting agents or consultants to interact with the government on our behalf by employing only reputable persons or entities who are qualified to perform the services and by paying only reasonable compensation for the services provided. In evaluating third parties and during any relationship with them, we are conscious of any red flags that may be present or arise. A red flag is a clue that there is a potential violation of applicable laws. Examples of red flags include third parties who: Have family or other relationships with government personnel that could influence the buying decision; Indicate that they have a special arrangement with government personnel; Demand compensation that is unreasonable for the services to be provided; Request a one-time success fee ; 4 of 11
Request payment in cash; Request reimbursement of expenses that are poorly documented; Refuse to certify compliance or to represent that they will not violate the Foreign Corrupt Practices Act or the U.K. Anti-Bribery Act; Suggest that a specific agent or representative facilitate the bid; or Lack the qualifications to perform the services. If we spot a red flag, we immediately contact the Legal Department. To avoid being held liable for corrupt third-party payments, we also contact Anixter s Legal Department before signing any agreements with consultants and before any work begins so that the proper agreements can be prepared. 10. Organizational Conflicts of Interest We identify and avoid organizational conflicts of interest before entering into government contracts. An organizational conflict of interest or OCI exists if our work under one government contract (e.g., a contract to write specification) gives us an unfair competitive advantage against other bidders or affects our ability to give the government impartial advice on another government contract (e.g., a contract to supply product that conforms to the specification drafted by Anixter on the first contract). To avoid an OCI, we ask ourselves whether anyone at Anixter has drafted specs, evaluation plans, or other materials relating to the government contract for which we plan on bidding. If the answer is yes, then we have identified a potential OCI, and need to consult Anixter s Legal Department before proceeding with the proposal. Promoting the value, features and benefits of a particular manufacturer s products to the government does not constitute an OCI as long as Anixter has no ownership interest in the manufacturer. 11. Doing Business with Disadvantaged Business Enterprises We are committed to promoting participation of minority-owned businesses, women-owned businesses, small businesses who qualify through the Small Business Administration, servicedisabled veteran-owned businesses, and HUBZone businesses which are located in historically economically disadvantaged areas and employ persons residing in such areas. We use reasonable efforts to provide opportunities for these businesses, often referred to as Disadvantaged Business Enterprises or DBEs, through purchasing or reselling opportunities, mentor-protégé programs and teaming arrangements. We ensure that only legitimate firms performing a commercially useful function and certified as eligible DBEs are used by Anixter if Anixter is buying from or selling to a DBE to fulfill an obligation under a government contract. Any sales, purchase or other agreements between Anixter and a DBE must be reviewed by the Legal Department, and any financial agreements between a DBE and Anixter must be signed by the Vice President of Finance (or person of higher rank) of the applicable Anixter division. 5 of 11
12. Travel When traveling in connection with a government contract, we comply with Anixter s Global Travel & Expense Policy. For travel that is reimbursable by the U.S. government, we comply with the requirements set forth in the Federal Acquisition Regulation. Accordingly, we do not exceed the maximum per diem rates required by the Federal Travel Regulations (continental U.S.), Joint Travel Regulations (Alaska, Hawaii, or outlying areas of the U.S.), or Standardized Regulations (foreign areas), as applicable. Current maximum per diem rates may be obtained through the U.S. General Services Administration s website, www.gsa.gov. 13. Internal Controls We are committed to taking steps that will minimize the possibility of misconduct and to taking appropriate action in response to misconduct when it occurs. These steps include: Assigning a group from senior management to oversee Anixter s ethics compliance program and ensure its effectiveness. Conducting reasonable due diligence to ensure that Anixter does not appoint or employ any officer, director, or member of senior management that engages in conduct contrary to this Policy. Conducting an annual audit to assess overall compliance with and the effectiveness of Anixter s ethics compliance program in monitoring and detecting conduct in violation of this Policy. 14. Training Each of us is responsible for understanding and complying with applicable laws and regulations in the performance of our work. To that end, Anixter provides government contracts training on this Policy for those employees in positions that are involved in government contracts. 15. Reporting Misconduct and Questionable Practices We are committed to performing government contracts ethically, in compliance with their terms and conditions and in accordance with the law and will not tolerate misconduct in connection with government contracts. If we suspect misconduct of any kind, including breaches of ethics, illegal activities, fraud, bribery, misuse of Anixter s assets, irregularities in accounting, internal controls or auditing, or any other violations of the standards outlined in this Policy or Anixter s Global Business Ethics and Conduct Policy, we report it in a timely manner. If misconduct is suspected, we report it to our immediate manager. Misconduct or concerns about an ethics issue may also be reported to senior management, the Legal Department, a regional Compliance Officer ( by email to ethics@anixter.com), or anonymously through Anixter.ethicspoint.com or the Anixter Hotline ( call toll-free 1-888-361-5806 if calling from the U.S. and Canada; use the phone numbers listed on Anixter.ethicspoint.com if calling from a country outside the U.S. and Canada). 6 of 11
16. Policy Against Retaliation Anixter does not tolerate retaliation against anyone for reporting misconduct or ethics violations in good faith or for participating in the investigation of misconduct or ethics concerns. Any individual who has been found to have engaged in retaliation against a company director, officer, employee, agent, customer, vendor or other business partner, for reporting misconduct or ethics violations in good faith or for participating in the investigation of such a concern, may be subject to discipline, up to and including termination of employment. If anyone believes that they have been subjected to such retaliation, they must report the situation as soon as possible to their immediate manager, senior management or the Legal Department. 17. Penalties and Disciplinary Action Failure to comply with this Policy and applicable laws concerning government contracts can result in serious consequences for the employee and Anixter, including severe fines and penalties, contract termination, exclusion from future government contracts, and even criminal prosecution. Anixter will take appropriate corrective action, which may include training, reassignment of responsibilities, suspension without pay or termination, against employees who fail to comply with this Policy or applicable laws. 7 of 11
Gifts to or from Government Personnel FREQUENTLY ASKED QUESTIONS Q1: We are having a meeting at a restaurant with a government contractor and a procurement officer from the U.S. Department of State to discuss a government contract that we were recently awarded. We are supplying materials to the government contractor. Since the government is not our customer, can I pay for the procurement officer s meal? A1: No. Our policy prohibits offering or providing meals to government personnel even if the government is not our customer. We can not offer or provide meals to government personnel even if the meal was provided at our facility during a meeting. If you are meeting with a government contractor to discuss a pending project and no government representatives are present, you can pay for the government contractor s meal. However, if government personnel and a government contractor are both at the luncheon meeting, you should have each party pay for their own meal. Q2: May I pay for the meal of a purchasing employee of a state-funded university during a luncheon meeting to discuss a pending project? A2: No. Our policy prohibits giving meals to government personnel which term is broadly defined to include all officers, officials or employees of the U.S. federal government or any state or local government within the U.S., including, without limitation, any political subdivision, agency, instrumentality, school district or educational institution funded in whole or in part by the U.S. federal government or any state. Q3: What if government personnel and non-government personnel are at our facility for an all-day training session? Can we offer sandwiches and other lunch items to everyone in attendance? A3: No. Our policy prohibits giving meals to government personnel. In this situation, you may provide a lunch buffet to the trainees; provided that, you include the following statement on your meeting invite or in an email to the government personnel that will be attending the meeting: Although lunch will be offered at the training, due to Federal law and Anixter's internal policies, we are unable to provide a meal to government personnel who will be in attendance. Please plan accordingly. Q4: Is it OK for me to send some golf balls to the procurement officer of one of my government customers if the golf balls are only $10? A4: No, our policy prohibits the offering or giving of any gifts to government personnel, regardless of the value of such gift. Q5: One of my best customers (a procurement officer of the U.S. Department of Defense) is concerned about his daughter s ability to find a job when she graduates from college because she has a criminal record. He told me that she was innocent but pled guilty because she was in the wrong place at the wrong time. Can I offer to call my best 8 of 11
friend, a criminal defense attorney, to see if he could get the conviction removed from her record? My friend would not charge for the advice. A5: No. Our policy prohibits us from offering or giving any gifts to government personnel. A gift includes a favor, and a gift given to a relative, significant other, charity, political party or other organization designated by the government personnel is considered a gift given directly to the government personnel. Q6: I have worked for weeks on expanding our business with one of our U.S. government customers. My hard work has paid off. Yesterday, we were awarded a major contract with the government. To celebrate our win, the procurement officer sent me some of my favorite cigars. Can I accept the gift? A6: No. Our policy prohibits us from accepting gifts from government personnel. Gifts to or from Government Contractors Q7: The procurement team of a government contractor is coming for a meeting this afternoon on a project that we have won. After the meeting, we are planning on going to a local restaurant for dinner. Can I pay for the procurement team s dinner? A7: Yes. Meals can be provided to government contractors on an occasional basis that foster goodwill and successful business relations, and would not be considered lavish, extravagant or frequent under the circumstances. Q8: We just received a major government contract from a government contractor. Should I be concerned about sending him a gift? A8: Yes. Providing this gift could create the appearance of an improper relationship in light of the timing of the gift. The gift may be appropriate if given to the government contractor at a different time (e.g., around the holidays) with the prior approval from the appropriate level of management per the requirements of Anixter s Global Travel & Expense Policy. Q9: What if I pay for the gift myself and do not seek reimbursement from the company? A9: An inappropriate gift violates our policy whether the gift is reimbursed by the company or not. Q10: I have the potential to double our business with a government contractor next year in light of upcoming government projects on which we plan to bid. My customer is a big fan of the Washington Wizards basketball team and has asked me if I could get him courtside seats to Sunday s game. Should I be concerned about calling a ticket broker to obtain tickets for this game? A10: Yes, the gift could be considered improper in light of the nature of the gift (premium seats purchased through a ticket broker), the timing of the gift (provided prior to the awarding of a government contract), and the fact the gift was requested by the customer. Contact Anixter s Legal Department before providing this gift. Also note that tickets purchased from a broker or other third party must be approved by a senior executive per 9 of 11
Anixter s Global Travel & Expense Policy. Remember that Anixter has regular season tickets for several sports teams. For information on obtaining Anixter s season tickets to sporting events, contact your manager. Q11: After a business dinner at a local restaurant, a customer asked me for $50 in cash to buy after-dinner drinks for the rest of his team. Can I give him the cash? A11: No. Our policy strictly prohibits gifts of cash. Q12: I have a home at a ski resort. The VP of Purchasing for one of my largest customers, a government contractor, is an avid skier. Should I be concerned about offering him free use of my home? A12: Yes, this type of a gift may be considered inappropriate and extravagant depending on the particular facts. Contact the Legal Department. Hiring Government Employees Q13: A Department of Defense employee that I know will be leaving the government soon. Can I talk to him about coming to work for Anixter? A13: No, not without prior authorization from the Legal Department because applicable laws may limit his ability to work for Anixter. Advise the Legal Department of your interest, and they will determine if such contact is allowed. The Legal Department will need to know his employment status (act ive or retired), his business relationship with Anixter when he was a government employee, and the particular position at Anixter for which you believe he may be qualified. Product Substitution and Quality Tests Q14: Can we substitute certain parts manufactured by one supplier for similar parts offered by another supplier to comply with the delivery dates set forth in our government contract? A14: No, not unless specifically allowed by the government contract. If the government contract prohibits substitution, you must obtain written permission to substitute parts from an authorized representative of the customer per the terms of the government contract. Q15: If we determine that certain quality tests are unnecessary under a government contract, do we have to perform them? A15: Yes, unless such tests are waived in writing by an authorized representative of the customer per the terms of the government contract. Procurement Sensitive Information Q16: I have obtained non-public information regarding a competitor s bid from an ex-employee of the competitor. What should I do? A16: Immediately contact Anixter s Legal Department. 10 of 11
Agreements with Anixter s Consultants Q17: We would like to hire a particular consultant in Washington D.C. to help develop our business with the Navy. During our initial meeting with the consultant, we discover that the consultant has a close relationship with a high ranking officer of the Navy. Can we hire this consultant? A17: No, consult with the Legal Department before making any commitments. The potential agreement with the consultant has at least one red flag: the consultant indicates that he has a close relationship with the procurement minister which could be problematic. Organizational Conflicts of Interest Q18: As part of our performance of a government contract with the U.S. government, we prepared the specifications that are to be used in another government contract. Can we bid on the latter government contract? A18: No, not without a written waiver from the government. To do so would be an organizational conflict of interest in violation of U.S. law. Q19: Today, a manufacturer s representative and I are meeting with a government procurement officer on an upcoming bid. The purpose of the meeting is to communicate and promote the value, features and benefits of the manufacturer s security products for which we have earned special or discounted pricing. If the government identifies the manufacturer's security products in its request for bid, can we submit a bid to supply the security products? A19: Yes, promoting a particular manufacturer s products to the government does not create an organizational conflict of interest provided that Anixter does not actually draft the specification, and Anixter does not have an ownership interest in the manufacturer. Doing Business with DBEs Q20: How do I verify that a DBE is certified? A20: You should request a certificate from the DBE or contact the Credit Department in Glenview (Loc. 100, Ext. 68609) to look up the DBE, as they have a Dun & Bradstreet tool that contains DBE information. Q21: One of our customers wants to buy from us, but is requiring us to put a DBE between us and the customer so that the customer can satisfy its requirements under a government contract, i.e., the customer wants to buy from the DBE who would then buy the material from us. I am confident that the DBE is certified. Do I have to have Legal review the contract? A21: Yes, you must have the Legal Department review the contract before it is executed. We may not execute a contract with a DBE in order to sell to one of our customers unless the DBE is performing a commercially useful function. 11 of 11