Collier school district reviewing Office Depot overcharging allegations

NAPLES — Collier County schools Superintendent Dennis Thompson has ordered a review of allegations the district has been overcharged by Office Depot.

The announcement came after the Daily News began asking questions concerning the district waiting for more than a year and a half to review the allegations.

Browder: Will investigate Office Depot

Does he regret waiting?

Superintendent James Browder smiles while being interviewed by media representatives in his office in early 2008.

Photo by MICHEL FORTIER

Fort Myers resident and disgruntled former Office Depot employee David Sherwin has been airing allegations of overcharging on the company's contracts since being fired in April 2008. "It's been a disaster," says Sherwin. "I'm as close to broke as you can be without being legally broke. But it's like poker, once you're all in you don't walk away from the table. Sherwin hopes to have an investigation of Office Depot in all 50 states. Michel Fortier/Staff

The allegations were first leveled in April 2008 by David Sherwin, the Fort Myers man and former Office Depot salesman who sold the district on the company’s national contract for office and school supplies.

“Given all of the allegations swirling around, including claims of potential criminal wrongdoing, as well as the reports pertaining to Lee County, the superintendent, as a matter of due diligence, wanted the district to do a follow-up review,” district spokesman Joe Landon said in an e-mail.

Collier schools spend nearly $900,000 a year on the Office Depot contract, one of three contracts under which the district purchases office and school supplies, said Nancy Sirko, the Collier district’s purchasing director.

If the Collier district were to conduct a full investigation, Sherwin says the district would uncover at least $295,000 in overcharges.

Since Sherwin has come forward with his allegations, seven state four federal agencies have become involved with investigating Office Depot’s government purchasing contracts.

Sherwin has provided documentation indicating he is a whistle-blower in the Florida Attorney General’s investigation.

Furthermore, among at least eight agencies in Southwest Florida that have purchased from the contract, three have received a credit from Office Depot, which denies it overcharged the agencies.

Sherwin asserts the company’s national contract, which the company says is used by more than 10,000 government agencies and nonprofits across the country, is rife with fraudulent schemes. Though his allegations are many, he says the worst is a second pricing option introduced to the contract Jan. 2, 2006.

The second pricing option was sold as coming at a lower cost even though it was more expensive, Sherwin asserts.

Though Office Depot denies the contract was sold in a deceptive manner or that its pricing is in violation of any contract, it has said that most agencies ended up spending more through the second pricing option.

Any agency wanting to be switched back could do so at any time, Office Depot says, and the company has issued credits to agencies that may have been confused.

Nonetheless, when Sherwin said he told purchasing director Sirko and other Collier schools officials they were being duped, he said he was ignored.

Sirko said the district is considering rebidding its contract and did conduct an audit of purchases, although she said the audit didn’t look at the difference between the two pricing options.

That’s because the pricing switch was authorized, she said.

“We did not do an audit to compare pricing between option one and option two, because the switch was made at our request,” Sirko said.

However, Office Depot has been issuing credits to agencies, whether officials at those agencies knew they were on the second pricing option or if they thought the second pricing option was cheaper.

“Each entity advised Office Depot that they were either unaware that Mr. Sherwin had placed them on option two or that they did not know that there could be a difference in the price paid depending on their spending,” a statement from Office Depot said. “As part of our commitment to customer satisfaction, Office Depot extended credits to each entity for the estimated difference between option one and option two pricing.”

Either way, Sherwin says that even a comparison between the two pricing options wouldn’t uncover everything he alleges.

“A straight comparison between option one and option two, without an investigative audit, will only identify about one-third of the overcharges,” Sherwin said. “For Collier County schools to do any kind of due diligence, their audit needs to mirror what is being done by the Lee County School District.”

Lee schools Superintendent James Browder announced last week his district would launch a full investigation into the contract, which the district spent $2.5 million on per year during the period the second pricing option was in place.

Lee schools aside, several local agencies have continued to purchase from Office Depot, despite the allegations, credits and an audit done for Lee County that reported the county was overcharged by $58,105.

Even though that Sept. 2008 audit, which was conducted by the Lee County Clerk of Court’s Office, recommended the county stop purchasing from the contract, the county continued to purchase. The county was receiving its refund through monthly reductions to its Office Depot bill.

On Tuesday, the county accepted bids for a new office supplies contract. Among the bidders was Office Depot, which came in with a total bid just above the lowest bidder, Staples.

Lee County Purchasing Director Janet Sheehan said it could take weeks before the winner of the bid is announced, as prices submitted by the vendors are reviewed.

The cities of Naples, Fort Myers and Cape Coral purchased from the contract in question, as did Edison State College and the Lee County Port Authority.