W.W. Grainger on Wednesday announced the resolution of a long-standing contract dispute with two U.S. government agencies, the United States Postal Service (USPS) and the General Services Administration (GSA). The issue related to disclosure language included in contracts with the USPS and GSA, implemented more than 10 years ago, the company said.
The Illinois-based hardware distributor has agreed to pay $70 million to resolve allegations it submitted false claims under contracts with the GSA and USPS, the Department of Justice reported. The government alleged in part that Grainger failed to meet contractual obligations that led to government customers overpaying for items under a Grainger contract.
W.W. Grainger does not admit to any wrongdoing, and maintains it complied with all contractual disclosure requirements. It also said the GSA and USPS "remain long-standing and important Grainger customers."
W.W. Grainger had set aside a $70 million pre-tax reserve in October, and established a $6 million pre-tax reserve for resolving tax, freight and miscellaneous billing issues with these government customers.
The USPS and GSA contracts accounted for 17% of W.W. Grainger's 2011 $8.1 billion in revenues.
The article W.W. Grainger to Pay $70 Million to Settle Dispute With Government originally appeared on Fool.com.Tim Brugger has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.