U.S. Department of Housing and Urban Development
                              Washington, D.C. 20410-3000
 
                                     March 17, 1992
 
OFFICE OF THE ASSISTANT SECRETARY
FOR ADMINISTRATION
                                                      Ethics Letter 92-4
       Special Attention of:
             All HUD Managers
 
      Subject:  Vendor Promotional Training
 
                                    ISSUE
 
          GSA recently informed the Department that Congress has expressed
      concern about vendor promotional training for government personnel,
      particularly in the area of automatic data processing equipment.  The
      House of Representatives Committee on Government Operations voiced
      serious concerns about free promotional training by vendors unduly
      influencing federal officials in ADP procurement activities.  The
      Committee objected to training gratuities or "coaching" from
      competing contractors on how to write specifications or source
      evaluation criteria for technology acquisitions.
 
                                  DISCUSSION
 
          The  purpose of this letter is to address Congress' concern that
      vendors not be allowed to unduly influence federal officials through
      free promotional training.  It is NOT to disallow or inhibit normal
      selling activities which include promotional vendor demonstrations.
      Current Standards of Conduct for HUD address accepting " ... any
      gift, gratuity, favor, entertainment, loan, or any other thing of
      value, ...," and the Federal Acquisition Regulation (3.104-4) states
      that "Gratuity or other thing of value" includes vendor promotional
      training.  Further, HUD's Handbook 2210.3, Procurement Policies and
      Procedures, paragraph 4-4, describes actions to be taken when contact
      is made with equipment vendors.
 
          However,  the key issue is the definition of vendor promotional
      training.  The confusion between training and demonstrations may
      inhibit Government personnel from learning about new technology which
      will benefit the Department before procurement begins.
 
                                  RESOLUTION
 
         FAR 3.104(f)(2) states, "Promotional vendor training does not
      include training provided by a vendor when a vendor's products are
      furnished under contract to the Government and the training is to
      facilitate the use of those products."  Therefore, training under a
      contract is clearly authorized.  However, other "formal classroom
      training offered to an individual by a vendor" is prohibited.  This
      guideline will ameliorate Congress' concern about training which
      allows the undue influencing of officials in procurement activities
      or "coaching" in the preparation of specifications.
 
          GSA is reviewing selected training programs to assist agencies to
      determine whether certain courses are acceptable for attendance.  In
      the meantime, the Office of Ethics will respond to questions
      regarding this matter.  Feel free to contact this office at 708-3815
      (TDD/Voice) or FTS 458-3815.
 
___________________________________________________________________________
      AE:  Distribution:  W-1, W-2, W-3, W-3-1, W-4, R-1, R-3-1, R-6, R-7,
                          R-9, O-16