Comment: Consider the Long Term (Score 1) 666
If the firm uses CentOS today because they find that optimal, they may find paying for Red Hat support tomorrow optimal. If they use some other operating system, they will be less likely to ever send Red Hat money. So take this opportunity to educate the CIO so that if your firm is ever in the position of needing their services, he or she will know where to go.
The goal should not be to eliminate free riders. In fact, free riding is an inherent component of the open source model and many who are free riders today will become paying customers tomorrow. The economic model works when the number of free riders is not so high that it chokes off resources necessary to develop the platform.
Whether or not that is the case for Red Hat is going to have little to do with your firm's decision or people's sentiments about whether paying for open source software is the right or wrong thing to do, and much to do with the general incentives that their economic model produces. Red Hat knows there are firms like yours wrestling with the same decision, and that many of them will chose options such as CentOS, but hopes that there are a sufficient number for whom it is a good business decision to avail themselves of Red Hat's (and other open source contributors') services that the product will command sufficient resources to continue to improve.