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Whistleblower lawsuit alleges overcharging by Grainger Inc.

A whistleblower lawsuit accuses W.W. Grainger Inc., an international distributor of maintenance products and hand tools, of repeatedly overcharging the U.S. government. Details of the suit were set out in an Associated Press report printed in the February 11, 2007 Houston Chronicle.

The suit, filed by a former employee under the qui tam provisions of the federal False Claims Act, also alleges that the company illegally relabeled materials made in restricted countries before selling those materials to federal agencies. This violated provisions of the Buy American Act.

The company’s contract with the government specified that products would be supplied at
cost plus a fixed markup of 26 percent. The company exceeded that markup, adding 50 percent to a laser marking machine sold to the Air Force. Products sold to the Postal Service had markups ranging from 30 percent to 60 percent.

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