UPS reaches $8.4M settlement with US government for overcharging on deliveries

Dive Brief:

UPS has reached an $8.4 million settlement with the U.S. government to resolve a case in which the logistics provider was accused of overcharging federal agencies for package deliveries, according to a press release from the Department of Justice.
The contract in question was with the General Services Administration (GSA). UPS was accused of failing "to follow the Price Reductions Clause of the GSA contract, which required UPS to provide GSA with certain lower prices offered to another customer, resulting in the government paying more than it should have for package deliveries," the release read.
The settlement is the result of allegations dating back from 2007 to 2014, the DOJ said.

Dive Insight:

"This settlement demonstrates that the government will hold accountable contractors that overcharge federal agencies by failing to follow the pricing terms of federal contracts," DOJ Assistant Attorney General Jody Hunt said in a statement.

The GSA Office of Inspector General had been working internally on this case since 2012 and approached DOJ about it in April 2014, a GSA OIG spokesperson told Supply Chain Dive in an email.

The settlement ends the matter, but is not an indication of liability, the DOJ said.

"The Government’s allegations stem from good faith differences regarding contract interpretation and were resolved as a contractual matter," a UPS spokesperson told Supply Chain Dive in an email.

UPS said it would continue to work with federal government agencies, including GSA.

This is not the first time UPS has settled with the U.S. government as a result of allegations surrounding federal contract violations. In 2015, UPS reached a $25 million settlement with the U.S. government as a result of claims the company issued false claims for Next Day Air overnight packages, according to a 2015 GSA press release.

UPS is not the only logistics provider to be accused by the U.S. government of overcharging on contracts. Late last year, DOJ filed suit against YRC Freight, Yellow Transportation and Roadway Express, accusing the carriers of fudging the weight on packages to make them appear heavier and billing the government for heavier parcels, according to Freightwaves. In 2017, Agility Logistics also reached a settlement with the U.S. government as a result of similar allegations, according to DC Velocity.