Troubles Mount for Office Depot - Updated

Office Depot had built up a good business selling to local, state and the Federal government. Now communities in Florida as well as Berkeley, CA are looking at complaints the company overcharged them. In Berkeley’s case they are asking Office Depot for over $250 thousand refund according to The San Jose Mercury News. This refund is based on a competitor researching the contract with Office Depot and the actual prices they were charging the city. The contract the city signed supposedly called for a 55% discount on prices but the investigation showed that it actually averaged around 39%. The Dayton Business Journal writes that several cities in Florida are also looking at the company for overcharging. The GSA has also announced that it will look at the company’s business with the Federal government. When a company enters into a multiple of contracts like this with different negotiated prices for each one it could lead to a situation where the wrong prices are used which may cause the overcharging claims. Unfortunately for the company involved it may lead to costs related to audits, legal fees and lost contracts.

Update - The Naples News has an interesting story about the Office Depot employee, David Sherwin, who acted as a whistle blower in these cases. He was an internal auditor who came to the conclusion that the set up that the company had with various state and local entities was leading to overcharging.