Overview - Corporate Executive Board

Compliance-Focused Due Diligence Questionnaire 

Lockheed Martin Corporation 

Overview 

Application and Due Diligence Interview 

Lockheed Martin gathers detailed information about 

vendors, consultants and other representatives of its 

business interests during its due diligence process, including 

interviews that evaluate the third party’s compliance and 

legal soundness. It has developed a standard set of questions 

third parties are required to respond to. Key focus areas 

include: 

1. Ownership structure and key employees of the 

company 

2. Involvement of government officials 

3. Use of subcontractors and subconsultants 

4. Provision of gifts and hospitality 

5. Compliance with local law, including any license 

and registration requirements 

6. Conflict of interest 

7. Competitors’ proprietary information 

8. Reputation 

9. Compliance program 

10. Commitment to compliance and credibility 

Potential Audience 

• Compliance and Ethics Staff 

• Procurement Department 

• Foreign Agents and Representatives 

Company Background 

Institution: 


Industry: 

Defense 

2005 Revenue: US$37.2 Billion 

2005 Employee Size: 135,000 

Source: Lockheed Martin Corporation; Compliance Source: Lockheed and Ethics Martin Leadership Corporation. 

Council research. 

© 2006 Corporate Executive Board. All Rights Reserved. 

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Interview Outline for Current or Proposed Representatives, Consultants, and Sponsors 

I. Introduction of the interviewers and the purpose of the interview, i.e., to explain and help ensure compliance with LMC’s 

Code of Ethics and Business Conduct and foreign and US laws such as the Foreign Corrupt Practices Acct (“FCPA”) 

1. Interviewed by: 

2. Place of Interview: 

3. Date of Interview: 

II. Identification of the representative, consultant or sponsor (the “Consultant”) 

1. Name of consultant interviewed: 

2. Name of consultant company: 

3. Address: 

4. Nationality: 

5. Residence: 

III. Background and capacity of the Company 

1. What kind of entity (i.e., corporation, partnership, sole proprietorship) 

2. What is the territory in which your company provides services for [the Company] 

For others more generally 

3. When was your company formed 

4. Where was your company formed (i.e., place of registration/incorporation) 

Source: Lockheed Martin Corporation.



5. Who formed your company 

6. Does your company have other offi ces/facilities 

a. Where are they located 

b. Are they separate entities 

c. Where were they formed 

7. Does your company have any subsidiaries Other affi liates Does it participate in any joint ventures 

If so: 

a. Where are they located 

b. Where were they formed 

c. What type of business do the subsidiaries/affi liates/joint ventures perform 

d. [If joint venture, obtain details for each joint venturer and of the joint venture vehicle.] 

8. Who are the owners of your company 

a. What are their nationalities 

b. What are their occupations 

c. What are their ownership interests 

d. Please provide resumes for each. 

Source: Lockheed Martin Corporation. 


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9. Who are the directors of your company Executive/non-executive 





e. What are the roles and responsibilities of the Board and each Director 

10. Who are the other (i.e., non-director) offi cers of your company 





11. If publicly owned: 

a. Exchange on which it is traded 

b. What is the regulating authority 




c. Get annual report for last 3 years. 

d. Brochures 

e. Most recent fi nancial statement 

12. How many employees does your company have 

a. How many are professional employees 

b. How many are non-professional support employees 

c. Where are they located [get number of employees at each location] 

13. Please provide resumes for everyone who will work for LMC. 

14. Does any owner, director, offi cer or employee own 5% or more in any other company 

15. Does your company use consultants or subcontractors 

16. Will any consultants or subcontractors help you provide services to LMC 

If so: 

a. Who are they 

b. Where are they located 

c. How can we contact them 

d. Do any government offi cials, candidates for public offi ce or offi cers or employees of a political party have any direct, 

indirect or benefi cial interest in the subcontractor or consultant 



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e. Has due diligence been performed in regard to each subcontractor or consultant If so, give details. 

f. What contract or arrangement is there with each subcontractor or consultant Is each ad hoc, temporary or permanent 

g. What are your reasons for using subcontractors or consultants (are there areas of expertise that your company 

cannot provide) 

17. What is your company’s experience/expertise in the industry 

18. Is registration required to do business in the territory 

19. Is your company registered to do business in any country If so, where 

20. Does the local law in the territory require the use of agents, representatives, consultants or sponsors 

21. Are there any restrictions on the use of agents, representatives, consultants or sponsors in the territory 




22. Is the proposed relationship between LMC and your company legal under the laws of the territory 

23. Would you have any objection if LMC were to disclose its relationships with you and your company to the territory 

government To whom would such disclosure be made 

IV. Involvement of Government Officials 

(Note: For our purposes, “government offi cial” includes any elected or appointed offi cial and any offi cer or employee of a 

government agency, government-owned (in whole or in part) enterprise or enterprise that performs a governmental function, 

or of a public international organization (such as the United Nations or the World Bank), or (possibly) a member of the Royal 

Family (if applicable). Also included in the defi nition of “governmental offi cial” are close family members and business associates 

(partners, consultants, advisors and agents). 

1. Are any of the owners, shareholders, directors, offi cers or employees of your company government offi cials 

a. Family members of government offi cials 

b. Close business associates of government offi cials 

2. Are any of the owners, shareholders, directors, offi cers or employees of your company, or their family members, candidates 

for public offi ce or offi cials or employees of a political party 



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3. Have you or anyone affi liated with your company ever given, offered, or promised to give money or anything of value directly 

or indirectly to a government offi cial, a candidate for public offi ce or an offi cial or employee of a political party for any 

reason (For example, to obtain or retain business) 

4. Have you or anyone affi liated with your company ever made a facilitating or “grease” payment, e.g., to unload cargo, to 

obtain work permits, or to secure electric, telephone, police or similar services 

If so: 

a. What was given 

b. To whom was the payment made 

c. Why was the payment made 

d. When was the payment made 

e. Where was the payment made 

f. Was anyone at LMC aware of the payment If so, who, and when and by what means was he or she made aware 

5. Does your company have a policy concerning gifts or business courtesies, such as meals and entertainment, provided to 

government offi cials or to candidates for public offi ce or offi cials or employees of a political party 

6. Have you or anyone affi liated with your company ever had occasion to provide gifts, entertainment, or business courtesies to 

a government offi cial, a candidate for public offi ce or an offi cial or employee of a political party 

If so: 

a. To whom were the gifts, entertainment, or business courtesies given 




b. What were the gifts, entertainment, or business courtesies 

c. What were the circumstances 

d. Why were the gifts, entertainment, or business courtesies given 

e. When were the gifts, entertainment, or business courtesies given 

f. Where were the gifts, entertainment, or business courtesies given 

g. Was anyone at LMC aware of the gifts, entertainment, or business courtesies 

If so, who, and when and by what means was he or she made aware 

7. Have you, your company, or any individual employed by or affi liated with your company made any contribution to a 

candidate for public offi ce or to a political party within the past 5 years 

If so: 

a. Who made the contribution 

b. To whom was the contribution made 

c. How much was contributed 



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d. Was the contribution made in consideration of a past action In anticipation of future consideration 

e. When was the contribution made 

f. Where was the contribution made 

g. Was anyone at LMC aware of the contribution If so, who, and when and by what means was he or she made aware 

V. Conflict of Interest 

1. Has your company ever represented an individual or entity that provides the same or similar services or that sells the same or 

similar products, as LMC if so, please explain. 

2. Who are your company’s other clients in our industry for which it has provided services over the past 5 years 

3. What services does your company provide to each of them 

VI. Competitors’ Proprietary Information 

1. Who competes with [Company] in the territory for the products or services you handle or similar products or services 

2. Have you or anyone connected with your company ever disclosed or received confi dential business information concerning 

one of these companies (e.g., bid or proposal information) 

a. What type of information 




b. From whom was the information received 

c. To whom was the information disclosed 

d. What, if anything, did you do in return for the information 

e. What did you do with the information (e.g., give to [the Company]/use for benefi t of [the Company] etc.) 

3. Are you familiar with provisions of LMC’s Code of Ethics and your (proposed) agreement which indicate that you must not 

obtain or provide us with any information not legally available in the territory or which is procurement sensitive, proprietary or 

classifi ed where there is reason to believe that possession of such information is unauthorized, illegal or unethical 

VII. Reputation 

1. Has your company or anyone presently or formerly employed or affi liated with your company, ever been arrested, charged or 

convicted or a crime 

a. If so, please provide details, including the outcome or disposition. 

2. Is your company now, or has it ever been, under investigation by a government or government agency 

3. Have there ever been allegations, including in the media, of illegal, improper or unethical conduct made against the 

company or against anyone presently or formerly employed or affi liated with the company 

If so: 

a. What were the allegations 



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b. When were they made 

c. Where (and how) were they made 

4. Has your company or anyone presently or formerly employed or affi liated with your company ever been barred or disqualifi ed 

from doing business with a government department, government agency or by an enterprise owned by the government or an 

enterprise performing a governmental function 

If so: 

a. When did this occur 

b. What was the governmental entity 

c. What were the circumstances that led to the debarment or disqualifi cation 

5. Has your company ever been terminated or not renewed by a client because of ethical or legal concerns 

6. Has your company ever been subject to an investigation by a client because of ethical or legal concerns 

VIII. 

Relations with LMC 

1. What is the status of your current/new agreement with LMC 

2. Does your company have any oral agreement or non-written agreements with LMC 

3. Does your company have any subcontracts or post-award service agreements with LMC 

4. What are you compensation arrangements with LMC 




a. What are your fees 

b. Will you be paid a commission 

c. Is there a success fee or bonus 

d. When are payments to be made 

e. Where are payments to be made 

f. How are payments to be made 

g. What documentation must be provided to LMC 

h. Is your company required to submit activity reports 

i. What is the process for reimbursing expenses 

5. Would your company be willing to provide a representation and warranty that, with respect to your company’s past and 

future services performed and to be performed for LMC, no payment or offer, gift, promise to pay or authorization of a 

payment of money or anything of value has been made or will be made to a government offi cial, a candidate for public 

offi ce or an offi cial or employee of a political party to obtain or retain business. 

IX. Compliance Program 

1. Are you familiar with the U.S. Foreign Corrupt practices Act 

2. Please explain what it prohibits. 

3. Have you received training 

a. If so, when and where did you receive training 

4. Does your company have a code of conduct 

a. If so, please provide a copy of the code. 

5. Does your company have internal compliance procedures to implement the code 



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a. If so, please provide a copy of the procedures. 

b. Will you agree to adopt LMC’s Compliance Code and program 

6. Does your company provide training to its employees concerning the laws and regulations that govern doing business in your 

territory 

a. What are those laws and regulations (e.g., local laws regarding bribery, use of agents, etc.) 

7. Does your company regularly audit compliance with the legal requirements and with the code 

a. Please provide copies of the reports of the last three audits. 

8. Would you agree to independent audits, as requested or required by LMC, of: 

a. The implementation of your Compliance Code and program 

b. Your company’s books and records, as they relate to business and transactions with LMC 

X. Explain LMC’s commitment to FCPA compliance. 

1. NO WINK. 

2. LMC would rather walk away from business than risk violating U.S. or territory law or our Code. 

3. LMC wants to avoid even the appearance of impropriety (New York Times test). 

4. LMC wants you to let us know if your company is ever approached with an improper or questionable request by a foreign 

offi cial or LMC employee. 

5. No work without a written agreement or outside its scope. 

XI. Evaluation and comments:

Overview - Corporate Executive Board

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