Grainger settles government dispute
Grainger has settled its long-standing contract dispute with the federal government for $70 million.
The dispute centered on disclosure language in the General Services Administration (GSA) and United States Postal Service (USPS) contracts, which were implemented more than 10 years ago.
The Justice Department said that Grainger's GSA contract required disclosure of commercial pricing policies but an audit showed that it had failed to provide accurate information, resulting in the administration paying higher prices.
The Justice Department said Grainger also had failed to meet obligations to provide the Postal Service with "most-favored customer" prices.
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 GSA and USPS remain long-standing and important Grainger customers. These contracts account for a portion of the company's overall government business, which represented 17 percent of its total U.S. 2011 revenue," the company said in a statement.
Grainger recorded a $70 million pre-tax reserve for this settlement in October and established a separate pre-tax reserve to resolve tax, freight and miscellaneous billing issues with the two government customers.
INDUSTRIAL SUPPLY MAGAZINE
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