Granite City Electric To Pay $2.3 Million For Overbilling On Statewide Contract

A Quincy-based electrical and lighting product supplier will pay more than $2.3 million to settle allegations it overbilled hundreds of state entities for supplies it sold them under a five-year contract with the Executive Office for Administration and Finance’s Operational Services Division (OSD), Attorney General Maura Healey announced Monday.

The assurance of discontinuance, filed in Suffolk Superior Court, resolves allegations that Granite City Electric Supply Co. violated the Massachusetts False Claims Act and Consumer Protection Act by failing to implement controls, policies and procedures to ensure it was pricing goods in accordance with its contractual obligations.

“This company engaged in a pattern of overbilling that cost hundreds of government agencies – including school districts, cities, and towns – millions of dollars,” Healey said in a statement. “We are pleased to be returning money to those public bodies.”

Under the terms of the settlement, Granite City will refund more than $1.18 million in overcharges to 285 public entities, including public school districts, cities and towns, state agencies, and housing authorities, and pay an additional $1.18 million to the AG’s Office, which will be directed to the state’s general fund. Granite City also agreed not to participate in public contracts for one year and to implement changes to its business practices, including trainings and compliance reviews. Under the terms of the assurance of discontinuance, refunds will be issued within 30 days.

Granite City was a vendor on FAC76, a statewide contract administered by OSD, that allows state entities including municipalities, quasi-public agencies, public school districts, and libraries and hospitals to purchase maintenance, repair and operations supplies and equipment at discounted rates. The AG’s Office alleges Granite City failed to abide by its pricing commitments in its FAC76 contract resulting in overbilling of $1.2 million.

The AG’s Office began investigating Granite City after it was notified by the Office of the Inspector General about potential issues with the company’s pricing and billing on state contracts.

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