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Tuesday, August 4, 2009

S.F. to Office Depot: How Much Were Those Paperclips Again?

Posted By on Tue, Aug 4, 2009 at 8:30 AM

click to enlarge Has Office Depot taken the city for a ride?
  • Has Office Depot taken the city for a ride?
Let's hope the city saved its receipts. According to San Francisco's Director of the Office of Contract Administration, Naomi Kelly, the vast majority of the city's office supplies are purchased  from Office Depot -- that would be the same Office Depot currently under investigation by the state Attorney General for overcharging on contracts with various public agencies around California (not to mention investigations currently under way in Missouri, Colorado, Ohio, and Texas). While a representative from the California AG's office would neither confirm nor deny the investigation, the FAQ section in the "investor relations" section of Office Depot's Web site does his job for him.

Kelly told SF Weekly that city employees in her office "became concerned when its spend rate for office supplies was higher than anticipated" -- and both the controller's office and city attorney were urged to conduct audits.

If said audit results in more money in San Francisco's pocket, it wouldn't be unprecedented. Last August, Office Depot reimbursed the state of California $2.5 million for overcharges during a two-year period of $57 million in state office supply purchases, according to California's Office of General Affairs. Since then, other cities nationwide have conducted their own audits with similar results. Officials in Berkeley recently uncovered evidence that the Depot overcharged them hundreds of thousands of dollars. Since filing their claim with the in April, a spokeswoman for the city says Office Depot has sent $289,000 Berkeley's way.

On the state level, the National Office Products Alliance (NOPA), an independent office products trade association, issued a press release a few weeks ago urging the the California Attorney General to look specifically at Office Depot's Walnut Creek-based US Communities contracts, which they allege resulted in "kickbacks" perhaps exceeding $20 million. A representative from US Communities said that these allegations are false, and clarified that the nonprofit -- which matches public entities with the cheapest office supply deals -- receives just one to two percent of the sales price from the vendors (including Office Depot, among others) to cover their administrative costs.

NOPA's release also claims that a number of federal agencies, including the U.S. Department of Defense, Department of Education, and the General Service Administration are conducting their own investigations into government contracts with the Depot.

A former Office Depot employee, Earl Ante of Fremont, recently filed a civil suit in San Francisco claiming that the store asked him to falsify records to cover Office Depot's tracks for overcharging the city of Berkeley. The company has not yet responded to SF Weekly's requests for a response, opting instead to address the allegations on the company Web site.

Meanwhile, San Francisco's Kelly wrote that her office can't yet release any information regarding  the outcome of the audit. But she did confirm mentioned that the city is gearing up to solicit for a new supplier of office equipment.

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Anna McCarthy


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