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September 13, 2019 1:30 PM, EDT

UPS to Pay $8.4 Million to Settle Claim of Overcharging Government

UPS logo on truck Michael Nagle/Bloomberg

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WASHINGTON — The Justice Department says United Parcel Service Inc. must pay $8.4 million to settle allegations that the company was overcharging the federal government for package deliveries.

The settlement was announced Sept. 13.

The Justice Department alleges UPS failed to abide by the terms of its contract with the General Services Administration and overcharged the government for services from 2007 until 2014. The government says its contract required UPS to provide the same lower prices that were offered to other customers.

Assistant Attorney General Jody Hunt said in a statement that the settlement shows the government “will hold accountable” contractors who try to overcharge the federal government.

The settlement resolves the allegations, but there was no determination of liability. 

DOJ-UPS Settlement Agreement by Transport Topics on Scribd

UPS spokesman Glenn Zaccara told Transport Topics that the federal government’s allegations stem from "good-faith differences regarding contract interpretation, resolved as a contractual matter."

"As the Justice Department noted in its announcement, the claims settled in this case are allegations only, and there has been no determination of liability," Zaccara told TT. "UPS maintains a strong relationship with its government customers and supports the important work of federal agencies under many contractual vehicles, including the one at issue here. The company is pleased that this matter was resolved in a cooperative manner."

“Contractors are expected to carefully comply with the pricing requirements of GSA contracts and other federal contracts,” said Hunt.  “This settlement demonstrates that the government will hold accountable contractors that overcharge federal agencies by failing to follow the pricing terms of federal contracts.”

UPS ranks No. 1 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.