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Government contractor to pay $6.25 million to settle False Claims Act violation

By Phillips & Cohen LLP

Fastenal Company, a national hardware distributor, has agreed to pay $6.25 million to settle allegations that it violated terms related to a contract with the US General Services Administration (GSA).

Fastenal was awarded a Multiple Award Schedule (MSA) contract, allowing it to participate in a streamlined marketplace of government purchasers. To be awarded an MSA contract, contractors must disclose to the government commercial pricing procedures and policies and comply with the terms of the contract in all related transactions.

The $6.25 million dollar payment resolves allegations that Fastenal knowingly overcharged government purchasers, as well as the allegation that Fastenal violated the Trade Agreements Act by selling to the US government products manufactured in countries that do not have trade agreements with the US.

The contract violations were discovered during a GSA post-award audit. "This case is another demonstration of the value of OIG audits in helping to uncover fraud on government programs," said Brian D. Miller, GSA Inspector General.

Full post as published by False Claims Act - Qui Tam on January 19, 2011 (boomark / email).