Busted: Ricoh to Reimburse State $4M for Copier Overcharges

[Anonymous]

Ricoh to reimburse state $4M for copier overcharges

Washington state government agencies are getting a $4 million windfall through a settlement deal announced today that requires Ricoh Americas Corp. to pay back overcharges on copier services.

Ricoh has a $17 million a year contract with the state for supply of copiers and service, which expires next April. The review of charges was ordered after an anonymous note tipped off the Washington Attorney General’s Office in 2009 to the overcharges, according to the state Department of Enterprise Services, which announced the agreement this morning with a news release on its web site.

The settlement is based on a sampling of contract sales done by PricewaterhouseCoopers LLP in response, and it covers charges dating to 2007 by Ricoh’s subsidiary IKON Office Solutions, said DES spokesman Steve Valandra.

Ricoh, which purchased IKON, “stepped up and did the right thing” once the overcharges were brought to light, Valandra said.

The money from the settlement ultimately will go back to state agencies and local governments that participated in the state’s contract for copier services and were overcharged.

“What we will do over the next few months is see what agencies and local governments used the contract and how they were affected – and direct the money back to them,” Valandra said.

In the news release, posted here, Enterprise Services director Joyce Turner said:

“We worked diligently to address the concerns and are pleased with the settlement agreement … These negotiations and the process taken to bring this to resolution provide a model for government and industry working together to ensure that the taxpayers of Washington are best served."

The release includes a statement from Ricoh USA:
"We are grateful to resolve this issue and take these matters very seriously. Since learning of this issue, we have worked closely in cooperation with the State of Washington to identify the problem and find an appropriate solution. We feel confident that we have taken the steps necessary to provide greater transparency to our sales and invoicing procedures in the future," said Steve Bissey, National Director of State and Local Government Sales, Ricoh USA, Inc.

The procurement settlement is one of several ongoing changes at DES that deal with the cost of services the state pays to the private sector.
In April, DES issued a new contract for purchasing office supplies and the agency estimated will save 21 percent or $2.9 million a year. As we reported at the time, the new contract split the supplier role in two – letting Office Depot supply paper and office supplies and Office Pal supply ink products and toner. That move came less than a month after state lawmakers also passed a procurement bill that will further consolidate state purchasing through the Department of Enterprise Services. The reforms will subject contractors to greater scrutiny, including disqualification for misconduct.

[Author]

July 3, 2012 at 9:59 AM