Home Depot faces lawsuit for violating Buy American Act

RawStory
By Eric W. Dolan

Home Depot faces lawsuit for allegedly violating the Buy American Act

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Retail giant Home Depot faces a federal lawsuit for allegedly violating the 1933 Buy American Act, which requires all materials used on public projects to have originated from the United States.

The company is accused of offering products purchased from China and other foreign countries to government agencies online. A trial is scheduled for next year.

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Home Depot Accused of Violating Buy American Act

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Home Depot Accused of 'Buy American' Violation

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32 Comments
By LYNEKA LITTLE
June 30, 2011

Home Depot is the target of a lawsuit for allegedly selling goods manufactured in China and other prohibited countries to U.S. government agencies in violation of the Buy American Act, according to court documents.

The suit was filed in 2008 by two employees of another government contractor and alleges that "Home Depot had major sourcing operations in China for many years," as well as India, and that the company knew that certain brands and products were to be excluded from sale to U.S. government agencies because they were not compliant with the Trade Agreements Act.
The suit also says, "Home Depot affirmatively misrepresented to federal government customers that its GSA-scheduled contract 'covered everything in our store.'"

GSA is the federal General Services Administration, which supplies products for U.S. government offices.

The Buy American Act and Trade Agreements Act work together to promote the purchase of U.S. goods or goods manufactured in countries when it serves the nation's economic interest.

The Atlanta-based home improvement retailer, with more than 2,200 locations in four countries (including China), denies the allegations.

"We would never knowingly sell prohibited goods under any circumstances, and we have been cooperating with the government to provide requested information," Home Depot spokesman Ron wrote in a statement. "We believe the plaintiffs have an inaccurate view of the facts, so we look forward to presenting our side of this case as the process moves forward."

The plaintiffs' attorney, Paul D. Scott, said, "We're looking forward to having our day in court and having a jury of American citizens decide what they think of this case."

The U.S. Department of Justice had no comment about the allegations.

The Great Depression-era Buy American Act of 1933 was intended to produce jobs and keep the economy afloat.

"It's faulty logic to think that's going to benefit the United States to favor U.S. products if the government could buy foreign made products for lower prices," Stephen Bronars, senior economist with Welch Consulting, said.

"The view that if you do something yourself you're going to have closer to full employment ignores [the fact that] if you can get something more cheaply, it frees up resources you can allocate to something else."

But some disagree. This view "ignores the effect of trade on jobs and ignores the effect of trade on business," Robert E. Scott of the Economic Policy Institute said. " Globalization: Everybody wins except for most of us. That is in fact what happened."
While the Home Depot fends off the suit, the company continues to offer government buyers a look at how "Federal Dollars Go Farther at the Home Depot."

According to Scott's research, Americans lost 2.4 jobs from 2001 to 2008 because U.S. multinational corporations outsourced production companies to China.

"It's not in the interest of the United States," Scott said. "It has hurt us as producer of goods. It has hurt wages and it has hurt GDP," Scott said.

"I tend to think that U.S. companies are increasingly outsourcing production and I think that has hurt the American economy," said Scott, who views the Buy American Act as a net benefit to the U.S. economy.

Here's a Look a Cases Litigated After Allegations of Violating the Buy American Act or the Trade Agreements Act In January, hardware supplier Fastenal paid out a $6.25 million settlement to the United States after an audit allegedly discovered the company "knowingly failed to meet its contractual obligations to provide the GSA with current, accurate and complete information about its commercial sales practices, including discounts afforded to other customers."

In a written statement, GSA Inspector General, Brian D. Miller stated: "This case is another demonstration of the value of OIG audits in helping to uncover fraud on government programs."

After the settlement, Fastenal released a statement, writing, "We continue to believe that we complied with our obligation under the GSA contract in all material respects. However, we felt a continuation of our dispute with the DOJ and GSA was not the best use of our resources."

The Winona, Minn.-based fastener distributor said in a news release at the time that the settlement was not an admission of wrongdoing.

source: http://abcnews.go.com/Business/home-...9#.UBlegaOTXgE

The Buy American Act was written during an era (1933) when Americans still actually ran America.

The trial is 'sometime' next year, and most likely will disappear into the same hole lawyers use to hide tens of millions of illegal aliens and outsource our wealth overseas in.

Didn't I recently read about a bridge in CA, that was built in China, and installed by American iron workers, in CA ? With globalization, I didn't think we had any "buy American" laws.

RELATED ..

Home Depot Facing Lawsuit for Violating the Buy American Act; Lists Chinese-made Products on GSA Schedule

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Home Depot is facing a lawsuit for violating the Buy American Act after allegedly providing Chinese-made products and other non-Trade Agreement Act compliant items to government customers through its GSA Schedule.

Bethesda, MD (PRWEB) July 05, 2011

Home Depot is facing a lawsuit for violating the Buy American Act (BAA). The suit, brought in the United States District Court of Central District California, by whistle-blowers employed at Actus Lend Lease, a partner company of Home Depot, alleges that both companies supplied goods to government agencies through their GSA Schedules which were incorrectly identified as being compliant with BAA, but were actually made in China (see case #08-07940-RGK). When applying for a GSA Schedule, companies are required to certify the source of each product offered. The GSA only allows items made in the United States or in Trade Agreement Act (TAA) compliant countries to be offered through the Schedules. The plaintiffs accuse Home Depot of misrepresenting the countries of origin of many of their items.

The 1933 “Buy American Act” was passed to protect American jobs. It requires that end products purchased by the government be made in the USA. The law allows exceptions for products made in other countries provided that they are parties to certain trade treaties. China is not a party to any of the necessary treaties and therefore not TAA compliant.

“The Home Depot case illustrates the importance for contractors to have a thorough understanding the GSA Schedule process,” said Scott Orbach, President of EZGSA, a Bethesda, Maryland-based GSA Schedule consulting firm. “Even seemingly successful and sophisticated large companies can lack GSA expertise and the results of an oversight can be devastating.”

The federal False Claims Act (or Lincoln Law) allows private individuals to sue “any person who knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.” (31 U.S.C. §§ 3729–3733) The plaintiffs, known as ‘relator’, have the right to sue under the theory that when the government is defrauded, the relator as a citizen and a taxpayer incurs a portion of the damages. Under the law, the penalty for submitting a false claim is triple the amount claimed and $5,000 to $10,000 for each occurrence. The U.S. Department of Justice will frequently join the relator as an additional plaintiff, although they have not yet indicated whether they’ll be joining the Home Depot case. If damages are awarded, or if the parties settle, the relator typically receives 15% to 25% of any amount collected.

Other large companies such as Staples Inc., Office Depot, Inc. and Office Max Inc. have paid a total of $22 million to settle claims that they have violated the Buy American Act. “Businesses need to be as accurate and exact as possible when adding products to their GSA Schedules, or risk facing costly and serious legal and monetary consequences,” concluded Orbach.

About the GSA Schedule:

GSA Schedules are the federal government’s preferred procurement method to purchase goods and services from approved commercial vendors in a fast and reliable manner. Federal sales through GSA Schedules totaled $37 billion in FY2010.
About EZGSA:

EZGSA is a full-service government consulting firm specializing in GSA Schedule proposal, contract management and federal business development services for companies aiming to increase their sales opportunities in the federal marketplace. As the private sector’s “Gateway to Government Sales,” EZGSA’s experienced team of proposal specialists is proud to have assisted over 900 clients of all industries with their GSA Schedule awards.
EZGSA clients averaged $1.8 million dollars in sales through their GSA Schedules during FY2010.
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Scott Orbach
EZGSA
(301) 913-5000 5001

Home Depot Facing Lawsuit for Violating the Buy American Act; Lists Chinese-made Products on GSA Schedule - Yahoo! News