No Low Price Guarantee for Uncle Sam

A whistleblower suit alleging that office supply giant, Office Depot, was fraudulently overcharging the government for supplies such as pens, ink, furniture and other miscellaneous goods was unsealed late last month.  The case claims that the company overcharged government agencies in San Diego County and throughout California under a series of office supply contracts.  The case was filed under seal in March 2009 in Los Angeles Superior Court.

Office Depot declines the allegations that it overcharged any agency, and claims that they had fairly bid and won the contracts by offering prices lower than its competitors.  The lawsuit also alleges that Office Depot intentionally failed to fulfill lowest-price guarantees and switched some customers to an alternate pricing option without alerting the customer that he alternative pricing will most likely end up costing them more.

Allegations of overpayments made to Office Depot are certainly not new.  Since 2008, Office Depot has been fighting allegations it overcharged its customers.  In settling disputes elsewhere, the company has never admitted wrongdoing.  It says it issued settlements, refunds or courtesy payments in order to ensure the satisfaction of customers.

Ex Office Depot employee David Sherwin was the whistleblower in this case.  Sherwin handled government contracts at Office Depot and allegedly made it known to company executives during his tenure that there were discrepancies in the way they were billing the government agencies.  Sherwin stands to receive a percentage of damages under the qui tam action, possibly more than 33 percent depending on several factors, including any involvement he may have had in overcharges.

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