Archive for December, 2012

Houston Auditor Says Office Depot May Have

Wednesday, December 12th, 2012

The city of Houston this month became the latest addition to a
long list of state and local government agencies and organizations
claiming overcharges and other irregularities by Office Depot related
to their office supplies purchases.
Houston city auditor David Schroeder said the city was overcharged
up to $6.6 million by the Florida big box in the 2006-2010
period analyzed by his office.
Schroeder launched the audit in November 2011 after a Dallas
County probe discovered $1.8 million in overcharges by the company,
according to a report on the overcharges claim published
by the Houston Chronicle newspaper.
The audit said overcharges to Houston ranged from $1.7 million
to $6.6 million, based on a review of the contract and information
provided by Office Depot.
A clearer figure was not available, the Houston Chronicle reported,
because the data provided was “incomplete, inconsistent, and
contained anomalies,” according to city controller Ronald Green‘s
The audit found millions of dollars in purchases had no accompanying
price list showing what the city should have paid, or were
moved among lists of products, effectively raising their prices in
violation of the city’s contract, Schroeder said.
“Clearly, the data provided to us during the audit was incomplete
to the extent that we had to modify our test work,” Green told the
Chronicle. “It’s also evident that the city has incurred substantial
overcharges for the merchandise purchased throughout the contract term. Regardless of the methodology, the city is owed a significant
amount of money from the vendor.”
According to the Chronicle, the city paid Office Depot $19.2 million
in nearly 300,000 transactions under the contract, which ran
from March 2006 to the end of 2010.
Office Depot disputed the charges and said it had cooperated
with city officials on the audit. Not so, said auditor David
“It was contentious the whole time, getting information was like
pulling teeth, and the responses that we got back were very difficult
to work with,” Schroeder told the Chronicle. “Everything they
sent us was communicating as if it was set up for litigation. It was
not a smooth audit at all.”
City auditors examined what Houston would have paid if the city
had been given the prices Dallas County and San Francisco were
given, identifying $1.7 million and $6.6 million discrepancies, respectively.
The terms of the U.S. Communities contract the city was working
under with Office Depot, Schroeder said, should have ensured
every jurisdiction got the same prices.
Schroeder also looked at whether the city received certain discounts
specified in the contract and said he found many missing,
or found many products either not on a price list, or present on
two separate price lists, the Chronicle reported.
Office Depot has paid millions in recent years to settle accusations
of overcharging local and state governments across the country
on their office supplies purchases. Settlements 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 fiveyear,
$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
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
n Payment of $412,000 to Colorado
following an investigation into
allegations that the company overbilled
more than 100 Colorado governmental
agencies and nonprofits for office
n Payment of $320,000 by Office
Depot for alleged violations of
Missouri’s Merchandising Practices
Investigations in other states including
Georgia, Nebraska, Colorado, North Carolina,
Texas and elsewhere have resulted
in similar allegations.
In addition, Office Depot whistleblower
David Sherwin has filed a multi-state lawsuit
against Office Depot, recently unsealed,
that seeks triple damages for
overcharges and a $10,000 penalty for
each alleged violation, possibly bringing
the total damages sought into the hundreds
of millions of dollars.

December 2012 Independent Dealer Magazine

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Managers Who Understand the Importance of Goofing Off

Wednesday, December 5th, 2012

CEOs get the message about the value of fun in the workplace and its contribution to the bottom line.

By Christopher Hann

These days more CEOs are getting the memo on the value of fun in the workplace and its contribution to the bottom line. The prevailing wisdom is that a spirit of playfulness builds teamwork by bringing employees together in a collaborative setting. Just look at one of Zappos’ core values:”Create fun and a little weirdness.”

Southwest Airlines has been the poster child for playfulness in the workplace since its founding in 1971 by fun-loving Herb Kelleher. More recently Cartoon Network CEO Stuart Snyder–named the “Most Playful CEO” of 2012 by Playworks, an Oakland, Calif.-based nonprofit–can be seen gliding about company headquarters in Atlanta on an oversize tricycle.

“For me,” says Playworks founder and CEO Jill Vialet, “it’s a constant effort around getting the message out that work is not the antithesis of play–by no means at all. The opposite of play is depression.”
Stuart Brown, founder of the National Institute for Play, says a positive spirit should start from the top. “The key to leadership is being flexible and open and playful … in a way that is really natural to your own personality,” Brown says. “When work and play can be joined in a way that works and is sensible, that, to me, is an ideal.”

Each spring Brown teaches a course at Stanford University titled “From Play to Innovation” with Brendan Boyle, a partner at Ideo, the Palo Alto, Calif., design consultancy known for promoting play to inspire imagination. Boyle touched on this idea during a presentation at the 2011 Creative Innovation conference in Melbourne, Australia. “If you can incorporate [play] into your innovation process,” Boyle told the gathering, “you’re going to make it more enjoyable, and you’re going to be better at it.”

These days playful leadership may be most famously reflected in the businesses of Silicon Valley–but not just in the grand, in-house gaming arcades and bowling alleys of the early internet days. Fun-based leadership has gone in a decidedly more grown-up and community-anchored direction. At Thumbtack, a San Francisco firm that helps consumers find and hire local service professionals online, employees sit down to lunches prepared by a professional chef. “Eating all our meals together is a great way to build camaraderie,” says co-founder and CEO Marco Zappacosta.

The company culture grew organically from Thumbtack’s origins, Zappacosta notes, when most of the founders all lived–and worked–in his brother’s house. “We keep things casual,” he says. “We work hard and care about what we do. But at the end of the day we’re not so wrapped up in it that we can’t joke about it.

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