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Hardware Company Fastenal Settles False Claims Act Case for $6.25M

January 13, 2011

Under a General Services Administration (GSA) Multiple Award Schedule (MAS) contract with the federal government, hardware store distributor — Fastenal — failed to offer or disclose discounts that it gave to non-governmental commercial customers, according to a False Claims Act lawsuit that prompted the company to pay $6.25 million.

“The MAS program provides the government and other GSA-authorized purchasers with a streamlined process for procurement of commonly-used commercial goods and services. To be awarded a MAS contract, and thereby gain access to the broad government marketplace, contractors must agree to disclose commercial pricing policies and practices, and to abide by the contract terms when selling to purchasers under the MAS contract.”

According to DoJ, Fastenal knowingly breached its duties under the MAS program and further “failed to comply with the price reduction clause of its GSA contract, overcharged government customers, [] improperly assessed delivery and sales tax charges on government sales,” and violated the Trade Agreements Act by selling “products to the United States that were manufactured in countries that do not have trade agreements with the United States, e.g., China.”

To report False Claims Act violations, contact Frohsin & Barger.

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