| Misinformation Campaign Against U.S. Communities |
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U.S. Communities is currently the target of a negative misinformation campaign circulating false claims about our organizational credibility and questioning our relationship with Office Depot, the office products supplier in the government purchasing program that we administer.
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| This list of facts below addresses some of the most egregious allegations and inaccuracies. |
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- Fact #1: U.S. Communities’ national sponsors include the National Association of Counties, the National League of Cities, the U.S. Conference of Mayors, the National Institute of Governmental Purchasing and the Association of School Business Officials. The suggestion that the national sponsors would engage in fraud with U.S. Communities is outrageous and without merit. U.S. Communities saves its program participants hundreds of millions of dollars per year, allowing public agencies to contribute more time and resources toward public benefits.
- Fact #2: Office Depot is the office products supplier in the U.S. Communities program through a direct contract between Office Depot and Los Angeles County – U.S. Communities did not participate in the award determination of this, or any other, contract. All such evaluations and awards are executed by public procurement professionals. The Los Angeles County contract with Office Depot was evaluated and awarded by public procurement professionals from 9 different public agencies from across the country. U.S. Communities currently administers 19 contracts with 24 different suppliers and monitors each contract through audits and other oversight measures.
- Fact #3: Three reviews of Office Depot’s contract administered by U.S. Communities have discovered little or no pricing inaccuracies. Most recently, the City of Denver conducted an internal review which concluded that it is being charged correctly – results of this review can be found here. The full pricing file for Office Depot’s contract with Los Angeles County is available for all participating public agencies to review upon request.
- Fact #4: U.S. Communities commissioned an independent audit of Office Depot’s performance in its program and found only one pricing inaccuracy out of 455 items and $3 million in purchases. You may download the results of this audit for review.
- Fact #5: Several of the erroneous allegations in fact relate to Office Depot contracts that are totally outside the U.S. Communities program and have nothing whatsoever to do with U.S. Communities. Office Depot has a number of contracts directly with various public agencies, including - the City of Berkeley, the City and County of San Francisco, Fulton County, Georgia School District and the states of California, Georgia, North Carolina and Nebraska. Any alleged issues arising out of those contracts have nothing to do with the U.S. Communities-administered contract which, as noted above, has been independently audited and found to present no material issues.
- Fact #6: U.S. Communities is not the target of any investigation by any Attorney General - anywhere.
- Fact #7: One of the proponents of this misinformation campaign against Office Depot and U.S. Communities, Mr. David Sherwin, was terminated from Office Depot for “workplace misconduct.” The Naples Daily News published an article profiling this former employee. You may download the naplesnews.com article to view the complete story. U.S. Communities has requested that Mr. Sherwin’s defamatory campaign be halted immediately. Click to view the demand letter.
- Fact #8: Mr. Sherwin has acknowledged receiving money from people associated with Office Depot competitors. The Naples Daily News article in which this was reported can be viewed here.
- Fact #9: U.S. Communities receives 1%-2.5% of sales in an administrative fee from contract suppliers to fund operating expenses and offset costs incurred by national and state sponsors of the U.S. Communities program. The administrative fees collected are typical for a cooperative purchasing arrangement and provide the contract suppliers access to a national market at a cost much lower than most effective advertising. There is nothing illegal, unethical, or improper about the administrative fees collected by U.S. Communities. These nominal administrative fees collected by U.S. Communities permit it to fund routine administrative functions including contract compliance, performing audits and general management of the pooled purchasing program while also allowing it to support a national awareness campaign on the availability of cost-saving contracts. U.S. Communities has never received “kickbacks” from any suppliers that participate in the purchasing program. U.S. Communities has always made it very clear that participating public agencies do not pay any fees or costs to use the program, but rather it is the suppliers that pay the administrative fees.
- Fact #10: The National Office Products Alliance, a consortium of independent office product suppliers that compete with Office Depot, has issued retractions for several inaccurate statements it has made about US Communities. The first NOPA retraction in September 2009 corrects inaccurate statements which suggested that US Communities was under investigation and had been alleged to have received "kickbacks" – these statements are false. The second NOPA retraction in May 2010 corrects inaccurate statements which suggested that US Communities relies on sole source contracts and negotiates contracts directly – these statements are false.
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| U.S. Communities provides a valuable service to public agencies, helping them to save hundreds of millions of dollars each year. We are proud of the savings our program has helped achieve and of our partnerships with public agencies around the country, and we will continue to strive to provide even greater benefits to participants in the future. U.S. Communities has built a proud track record and reputation of credibility and integrity and intends to proactively challenge those who make false and defamatory statements. |
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For regional questions or concerns, please contact your local Program Manager.
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| For legal and media inquiries, please contact James Hamill (jhamill@uscommunities.org / 925-942-2930 ext.216)
or Jon Penkower (jpenkower@uscommunities.org / 925-942-2930 ext.237).
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| Summary List of Articles/Materials
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