RPM International to pay $60.9 million for overcharging GSA

Aug. 28, 2013 at 2:01 PM
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MEDINA, Ohio, Aug. 28 (UPI) -- RPM International Inc. said Wednesday it had paid $60.9 million to resolve claims a subsidiary overcharged the U.S. government for building supplies.

The company's Chairman and Chief Executive Officer Frank Sullivan said the company "made mistakes in the administration of our General Services Administration contracts."

"We are fully committed to conducting business with the highest levels of compliance, and have taken a number of proactive steps to strengthen our administrative procedures and compliance systems to prevent future errors from occurring," he said.

Sullivan also said the "installed product performance, which was the subject of the [Justice Department] investigation, accounted for less than 0.3 percent of the settlement value."

The case, which was triggered by a whistle-blower's complaint, involved the company's failure to award the GSA with discounts that it also grants to non-government customers, the Justice Department said.

An RPM subsidiary, Tremco Inc. "failed to provide the government with price discounts," the department said. The firm also "allegedly marked expensive materials to government purchases without disclosing the availability of the same material sat a lower costs that were manufactured and sold by the company."

The pricing violations allegedly occurred from January 2002 to March 2011. "Tremco knowingly violated its contractual obligations," the department said in a statement.

The Justice Department said a former Tremco vice president would receive more than $10.9 million as his share of the recovery under the False Claims Act, which allows a private citizen to bring lawsuits on behalf of the government.

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