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Arizona County Says Office Depot Overbilled Them By $5.3M
Maricopa County targets Office Depot over pricing, Officials say chain overbilled $5.3 mil
Maricopa County will demand a $5.3 million refund from Office Depot, joining other local, county and state governments that have raised issues with the megaretailer’s pricing for office supplies.A two-year internal Maricopa County review concluded the county was charged more than other state and local agencies, despite a contractual agreement with Office Depot for the lowest price for supplies.
In 2000, Maricopa County joined a consortium of government and non-profit customers around the country in signing a purchasing contract with Office Depot.
Los Angeles County was the lead agency for the so-called U.S. Communities Purchasing and Finance Agency, which was formed to help drive down bulk-purchase prices.
County internal auditors analyzed Office Depot contracts of comparable state and local government agencies and found at least one contract with San Francisco that offered lower prices.
A sampling of 192,000 items found that San Francisco paid about 32 percent less than Maricopa County did for similar purchases, county officials said.
The County Attorney’s Office will issue a demand letter for a full refund.
"I would hope that Office Depot would honor their contractual commitments," said Wes Baysinger, chief county procurement officer.
"We will certainly work with them to come to a resolution, but we feel that we have a very strong allegation, or case, and we think we need to be compensated for what they overcharged us."
Baysinger alleged that overcharges estimated at $5.3 million took place from 2006 through 2009.
Office Depot denies the allegations.
It said in a statement released through a spokeswoman that Maricopa County was not overcharged and that the prices it paid "were the prices called for by the contract it joined."
The county’s claim is "simply wrong" and "rehashes old claims" made by a disgruntled former employee, the company statement said.
The county’s contract with U.S. Communities promises "the lowest available pricing … to state and local public agencies nationwide."
It further states that in case of a price decline, or if similar products are sold at a lower price to any government agencies in California, that the same lower price must be applied to Los Angeles County.
The Florida Attorney General’s Office in 2010 reached a $4.5 million settlement with Office Depot, based in Boca Raton, Fla., for the company to refund Florida customers affected by improper billing.
The investigation and settlement applied only to Florida customers.
Office Depot’s statement said subsequent claims elsewhere are based on a misreading of the Florida settlement.
The company’s spokeswoman could not be reached for further comment.
That Florida agreement led to a handful of governments nationwide auditing their Office Depot bills.
Several other government agencies challenged the company, including Dallas County, Texas; Seattle; San Francisco; and Hillsborough County, Fla.
The Dallas County auditor in 2011 concluded that Office Depot overcharged the county up to $1.8 million.
The San Francisco City Attorney’s Office recouped $4.5 million in an overcharge settlement with Office Depot.
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