The Department of Justice recently announced a $6 million settlement in a False Claims Act case against W.W. Grainger Inc. The case was brought by qui tam relator Brian M. Holbrook. In his complaint, Holbrook alleged two types of False Claims Act violations. First, he alleged that Grainger had entered into a contract with the government pursuant to which Grainger would be paid a 26% mark-up above its costs for certain types of goods, but had routinely sold goods to the government at much higher mark-ups. Second, he alleged that Grainger had violated the Trade Agreements Act and the Buy American Act by selling goods to the federal government (through the GSA’s website, www.gsaadvantage.gov) that were manufactured in China or Taiwan, which are not approved countries under those laws. These violations of the Trade Agreements Act and Buy American Act also violated the False Claims Act because, according to the complaint, Grainger’s contracts with GSA required Grainger to submit sworn statements that the products sold through the GSA website complied with those laws. If you are interested in the Trade Agreements Act/Buy American Act issue, you might want to take a look at the GSA’s own website, which addresses these issues.
