UPS To Settle Overcharging Issue With US Govt. By Paying $8.4 Mln

United Parcel Service Inc. (UPS) agreed to pay $8.4 million to the United States to settle allegations that it overcharged federal agencies for package delivery services, the U.S. Justice Department said.

Under a General Services Administration or GSA contract, UPS was required to provide GSA with certain lower prices for its services. The GSA is an independent agency of the United States government that was established to manage and support the basic functioning of federal agencies by supplying products and communications as well as transportation and office space.

However, the DOJ noted that UPS failed to follow the price reductions clause of the contract from 2007 to 2014, resulting in the government paying more than it should have for package deliveries.

UPS provided ground delivery service and air delivery service under the GSA contract, which is a Multiple Award Schedule Contract. According to the DOJ, there has been no determination of liability in the settlement that covers ground delivery service.

“This settlement demonstrates that the government will hold accountable contractors that overcharge federal agencies by failing to follow the pricing terms of federal contracts,” Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division said.

The settlement comes more than four years after UPS agreed to pay $25 million to settle allegations that it submitted false claims to the U.S. government in connection with its delivery of next-day air overnight packages under contracts with GSA.

Under those contracts, UPS guaranteed delivery of packages by certain specified times the following day.

The 2015 settlement resolved allegations that from 2004 to 2014, UPS concealed its failure to comply with its delivery guarantees, thereby depriving federal customers of the ability to request refunds for the late delivery of packages.

That settlement resolved a whistle-blower civil lawsuit filed in the Eastern District of Virginia by Robert Fulk, a former employee of UPS, who received $3.75 million of the settlement.

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