Reciprocity

It is IBM's policy neither to buy nor to sell on a reciprocity basis.

To maintain the high performance standards of our products, we must base all our purchases on quality, price and the supplier's reliability. To use reciprocity as a purchasing consideration would limit our field of supply and could jeopardize our product quality and price.

In addition, we should never use our extensive purchases to aid our selling efforts. We must leave customers free to buy, unhampered by any reciprocity considerations.

In effect since November 10, 1966; replaces earlier policy dated January 26, 1961.


Guideline A
IBM Procurement is in full support of IBM's policy regarding reciprocity and at no time should this policy be compromised; i.e., Procurement should never change a sourcing decision based on a supplier's purchases, or lack of purchases, from IBM.

However, all major customers deserve the utmost courtesy and attention from all IBM employees, and this includes Procurement. This courtesy and attention, from a Procurement point of view, means:

  1. Procurement will advise these suppliers of any Procurement strategies or plans that may impact that supplier's business.
  2. Procurement will give these suppliers the opportunity to quote on any IBM business that they believe they are qualified for.
  3. Procurement will help these suppliers gain access to a somewhat higher management level than their level of business with IBM might normally justify.
  4. Procurement will make sure that affected IBM salespeople and account executives are advised of major events, good or bad, in the relationship; especially, if a major customer is about to lose a significant amount of business. IBM sales must be notified BEFORE the supplier is notified.

IBM Sales and Services publishes a list of IBM's major customers.

We should be very forthright, when the question arises, in explaining our no-reciprocity policy to suppliers.

Guideline B
From time to time, IBM may divest from certain areas of the business. In situations where IBM is a significant customer of the divested area, it may make sense for IBM to buy products from the acquiring company for a period of time.

This approach has two major benefits: first, it maintains the supply to IBM – finding an alternative supplier to completely replace the previously internally sourced supplier could potentially cause major disruptions while any new supplier gained a better understanding of the IBM requirements; and, second, providing the potential for a revenue stream for a defined period can make the sale more attractive to possible acquirers.

Any "partnering" arrangements of this nature require the approval of the CFO of the IBM Corporation.

Guidelines updated as of May 28, 2004.

In effect since August 15, 1995; replaces earlier policy dated November 10, 1986.