Agreed with respect to the hypothetical. Please be sure to assess whether the competitor uses the buyer’s product, service, or asset to compete with the target, in addition to whether the competitor uses it as an input for a product or service that competes or is intended to compete with the target. The first part appears to be missing from your analysis.
Please keep in mind that only direct contracts with relevant defense and intelligence agencies must be disclosed. If your client is unable to provide the information, they should give a statement of reasons for non-compliance.
Question
We have two questions we are hoping the PNO can assist us with. We will be filing for our client as an acquiring person during the month of May.
First, our question relates to the criteria for identifying a buyer’s Related Sales to a business that “uses the acquiring person’s product, service, or asset to compete with the target’s products or services, or as an input for a product or service that competes or is intended to compete with the target’s products or services.” Acquiring Person Instructions, p. 10. (The same issue arises with respect to Related Purchases.) Specifically, in our situation, the buyer may sell products or services to the target’s competitors that the target’s competitors do not package and resell or incorporate into a separate product or service. Essentially, the buyer is selling what amounts to an overhead cost for the target’s competitors. As a hypothetical example, say that the buyer sells antivirus software to Company A (a competitor of the target) and that Company A uses that antivirus software on its sales agents’ laptops. In this scenario, we do not believe that the target’s competitors are using the antivirus software as “an input for a product or service that competes or is intended to compete with the target’s products or services,” and we would not list these sales to Company A as Related Sales on the Form. Likewise, if the buyer purchased antivirus software from Company A for use on its sales representatives’ laptops, we do not believe that it would be necessary to list those purchases from Company A as Related Purchases on the new HSR Form as the antivirus software is not an “an input into any product or service.”
Does the PNO agree that this is a reasonable approach to take in responding to the Related Sales and Related Purchases questions?
Second, regarding Defense and Intelligence Contracts, our client does not have a centralized database of proposals where responsive material would be stored. Our client has confirmed that to the best of their knowledge, neither the acquiring entity nor any person within the acquiring person that directly or indirectly controls the acquiring entity has any responsive proposals. Is this a question that our client can answer to the best of their knowledge ?