UPDATE: Koster investigates Office Depot over school supply contracts

Tuesday, February 3, 2009 | 5:18 p.m. CST

JEFFERSON CITY — Missouri Attorney General Chris Koster is investigating Office Depot over allegations of overpricing government contracts for school supplies.

The announcement Tuesday about Missouri's investigation follows similar probes in other states. A North Carolina audit said the office supply company overcharged that state almost $300,000 for school supplies, while Georgia canceled its state contract with the company because of pricing errors.

Koster spokesman Travis Ford said the investigation began shortly after Koster took office Jan. 12. He said Office Depot's government contract troubles are a "national problem."

Office Depot spokesman Jason Shockley issued a written statement acknowledging the investigation.

"While we intend to vigorously defend any allegations of wrongdoing lodged against our company, we will fully cooperate with the Missouri Attorney General's office, as we do in all government and regulatory inquires," he said.

Office Depot Inc., based in Delray Beach, Fla., has a "U.S. Communities" national contract estimated to be worth $600 million to supply school districts in all 50 states. Ford said he is unsure how many Missouri school districts are affected or how much Missouri's portion of the contract is worth.

A request for that information was received by Office Depot on Monday, Ford said.

"Right now, we're in the search for information," he said.

Auditors in other states say the company overcharged on several seemingly small items, such as staples or scissors.

Chris Bates, a spokesman for a national group of small office products dealers, said there has been a shift toward more contracts with exclusive providers among governments at all levels. He said this makes the contracts difficult to audit.

"You need to have the competition to ensure you're getting the best value every day," Bates said.

Office Depot announced plans in December to close about 9 percent of its North American stores and cut 2,200 jobs over the next three months. Included in those store closings is the Office Depot location in Jefferson City.

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