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W.W. Grainger to Pay U.S. $70 Million for False Claims

W.W. Grainger Inc., a hardware supply distributor, agreed to pay $70 million to resolve U.S. allegations it submitted false claims under contracts with the General Services Administration and the U.S. Postal Service.

The GSA discovered through an audit that Grainger hadn’t given accurate or complete information to government purchasers, causing the U.S. to pay excessive amounts for the company’s products, the Justice Department said today in an e-mailed statement.

The settlement also resolves allegations under the False Claims Act that Lake Forest, Illinois-based Grainger didn’t offer as big discounts to the U.S. Postal Service as to commercial customers for sanitation and maintenance supplies, the department said.

“Misrepresentations during contract negotiations undermine the integrity of the government procurement process,” said Stuart F. Delery, who heads the department’s Civil Division. “The Justice Department is committed to ensuring that government purchasers of commercial products receive the prices to which they are entitled.”

Grainger had signed up to participate in the GSA’s so-called Multiple Awards Schedule program, which provides the government and other GSA-authorized purchasers with a streamlined process for procurement of commonly-used commercial goods and services. To get in on such a contract, companies must agree to disclose their commercial pricing policies and pledge to give the government the lowest price they offer their best customers.

Long Dispute

Grainger said in an e-mailed statement its long-standing contract dispute with the federal government centered on disclosure language in GSA and USPS contracts that were implemented 10 years ago

“Grainger maintains it complied with the disclosure requirements and the contracts in all material respects, and the settlement does not contain any admission of wrongdoing by the company,” the company said in the statement.

The case was filed in the Eastern District of Wisconsin, according to the department. The filing wasn’t available through electronic court records.

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