Archive for March, 2011

Office Depot Subject of New Investigation

Wednesday, March 16th, 2011

Florida big box Office Depot disclosed last month it is the subject
of a new investigation into its pricing practices by the U.S. Department
of Justice.
This latest investigation follows previous probes into Office Depot
in 2009 which were conducted by the U.S. Department of Defense,
the Department of Education and the General Services Administration,
led by the Department of Justice, into prices the office supply
retailer charged federal agencies.
Its focus, according to Office Depot, is on an expired agreement
that the company had between January. 1, 2006, and January 1,
2011, by which state, local and nonprofit agencies could purchase
office supplies.
Also at the federal level though unrelated to the current investigation,
Office Depot last year agreed to pay $1 million to settle
charges that it overstated earnings and shared information with a
select group that it failed to include in public filings.
At the state and local government level, the past several years have
seen a growing list of official auditors’ reports and news stories on
alleged pricing irregularities and overcharges by Office Depot. Results
of recent investigations include:
n Payment of $4.25 million by Office Depot to the City of San
Francisco after an audit found the company failed to provide
the city with an estimated $5.75 million in contractually
mandated discounts for items covered in its five-year, $18
million contract.
n An agreement by Office Depot to refund California $2.5
million after an audit found items were purchased without
receiving the expected discount.
n Payment of approximately $4.5 million by Office Depot to
various Florida local government agencies, regarding
allegations that the company overcharged governmental
agencies for office supplies in violation of the Florida Deceptive
and Unfair Practices Act.
n Payment of $320,000 by Office Depot for alleged violations
of Missouri’s Merchandising Practices Act.
n A report by the Washington state auditor’s office that found
Office Depot overcharged Washington taxpayers over $270,000
for office supplies in just a three-month period.
Similar investigations have been conducted in other states including
Georgia, Nebraska, Colorado and North Carolina.
For more on these and other investigations, visit the Office Depot
State Contract Watch section of the INDEPENDENT DEALER web
site www.idealercentral.com/Pages/Watch_List.

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