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 user 2010-01-04 at 11:30:17 am Views: 39
  • #23148

    Here’s a start toward solving San Francisco’s $522 million budget deficit for next year: Stop being gouged for paper clips and staples.Office Depot overcharged San Francisco for at least $5.75 million worth of office supplies over 4 1/2 years, according to a new audit by the city’s controller, findings the national chain disputes.

    “It’s certainly money that the city is owed,” Controller Ben Rosenfield said after releasing the audit Friday. “It’s money that we were overcharged on pens and paper at a time when we’re being forced to cut services and lay off employees.”Office Depot, beset by overcharging allegations across the country, violated its exclusive contract to provide city government with office supplies by not giving the city agreed-upon discounts and making unauthorized price increases, the audit said.The audit also faulted the city’s Office of Contract Administration for poor oversight, saying the city was making monthly payments to Office Depot without sufficient verification that the items and prices were correct.

    Office Depot contends the audit is flawed and has given no indication it will pay the city.
    “The assertion that we owe $5.7 million is without merit,” company spokesman Jason Shockley said. “We believe the report contains material errors and fails to maintain the objectivity and fairness required.”

    Office Depot executives are “more than willing to meet” with San Francisco officials “to resolve our differences amicably,” Shockley said.”Our findings are fair,” Rosenfield countered. “The money is owed to the city.”City Attorney Dennis Herrera’s staff is reviewing the audit and considering its options, spokesman Matt Dorsey said.

    The audit is the latest in a string that have found Office Depot overcharged governments for supplies, including the states of California, Georgia, North Carolina and Nebraska, San Francisco’s report said.

    The company agreed last year to refund California $2.5 million after an audit found items were purchased without receiving the expected discount, the state Department of General Services said. That came on top of a separate $2.5 million settlement Office Depot agreed to pay nine California counties in 2007 for allegedly overcharging customers in stores. In March, a Berkeley audit found more than $250,000 in overcharges.”Office Depot is playing fast and loose with the privilege of doing business with the state,” Nebraska State Auditor Mike Foley said last year. “They ought to be held accountable.”

    In San Francisco, the audit looked at every purchase from January 2005 through June 2009 and found $5.75 million worth of overcharges out of $18.3 million in payments – a markup of more than 31 percent.Office Depot’s contract with the city expired Nov. 30. The city has switched to Staples for office supplies for at least the next six months as it prepares to put the contract out to bid.

    Herrera Issues Demand Letter to Office Depot in Wake of S.F. Controller’s Audit
    SAN FRANCISCO – City Attorney Dennis Herrera last Monday  issued a demand letter to Office Depot, Inc. expressing his intention to “vigorously pursue” at least $5.75 million in overcharges together with interest, attorney’s fees, and costs incurred by the City in conducting the audit.

    The demand letter follows the release of an exhaustive audit report by the Office of City Controller Ben Rosenfield, which was released on Dec. 18, 2009. The Controller’s 96-page audit concluded that, among other overcharges, the Boca Raton, Fla.-based office products supplier failed to provide the City with contractually mandated discounts for items covered by the 5-year contract, which was valued at some $18 million.

    “Any resolution of this matter must include compensation to the City for the costs of the audit, and for attorney’s fees, as well as full reimbursement for price overcharges, with interest,” Herrera wrote. “If the City is unable to obtain a satisfactory informal resolution of this matter, I will not hesitate to pursue the matter in court. Further, if court action becomes necessary, rest assured that my office will vigorously pursue the City’s claims to the fullest, including seeking civil penalties and debarment, if appropriate.”

    Office Depot to Close Distribution Center (live video ),0,5185945.story
    Another distribution center in Luzerne County will soon be closing its doors.
    Officials from the Office Depot have confirmed the facility near Mountain Top will be relocating.More than 100 workers work at the Office Depot in the Crestwood Industrial Park. Come February, all of them will be looking for a new job.”What can you say? There’s no work out there. Nobody’s buying. Nobody’s selling. So what can you do?” asked Fred Amorosa of Shickshinny.He isn’t surprised to hear about the latest plant shut down in Luzerne County. Amorosa is a local truck driver and said times are tough just about everywhere you look.Louis Edwards agrees. “It’s bad all over. I’m laid off myself,” Edwards said. “I’m out here today looking for a job.”

    The distribution center in Mountain Top will permanently shut down in February and consolidate to a new location near Harrisburg in Cumberland County.William Zoepke has been working as a security guard there for nearly a decade. He said he is not looking forward to saying goodbye. “Well not really. They figured it was coming but then when it does happen, it’s more or less a surprise,” Zoepke said. He plans to retire after the February closure.Not everyone working at the Office Depot facility will be as lucky. Many have families to support. They will need to rely on unemployment until they can find new work.

    businesses like Abe’s Hot Dogs along Route 309 said they rely on the lunch-time crowd from the industrial park to keep business going there as well.”Last year they laid off a lot of people from the plants up in the industrial park. Now with Office Depot going it’s going to hurt our business even more,”said Sandy Waitoish of Abe’s.Officials from the Office Depot said current employees will be able to apply for positions at the new location near Harrisburg. Severance packages are also being offered.,0,5185945.story