Fastenal may face government suit
Fastenal Company faces potential litigation by the Department of Justice for overcharging government customers.
In its quarterly filing with the Securities and Exchange Commission, the Winona, Minn.-based distributor said it received a letter from the Civil Division of the Department of justice threatening litigation unless Fastenal pays the government $9.5 million. Fastenal has offered $750,000 to settle the matter.
The filing said the dispute concerns a contract entered into with the United States General Services Administration in 2000, which Fastenal discontinued in 2005.
An audit conducted by the GSA Office of Inspector General in 2005-06 suggested Fastenal had not complied with certain pricing and product requirement provisions, and had potentially overcharged government customers under the contract.
"We have communicated our disagreement with the audit report, and have participated in several meetings and discussions with the OIG and DOJ on these disputed issues during the past several years," Fastenal said in its SEC filing.
Discussions between the DOJ and Fastenal relating to the pricing and product requirement provisions under the contract are ongoing.
"We continue to believe that we have complied with our obligations under the GSA contract in all material respects," the company said.
INDUSTRIAL SUPPLY MAGAZINE
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