Local News

Resolution Expected In Disputed State Office-Supply Contract

Posted July 31, 2006 6:11 a.m. EDT

— State leaders Tuesday are expected to respond to a lawsuit and a judge's ruling that question a major contract.

Corporate Express is suing North Carolina claiming that the North Carolina Department of Administration in November 2005 unfairly awarded a six-year contract totaling more than $100 million to Office Depot.

Last April, administrative law Judge Beecher "Gus" Gray cited various problems with the deal and issued an advisory opinion for the state to make changes.

According to court documents, a shared contract with the losing bidder, Corporate Express, could have saved taxpayers nearly $11 million over the life of the contract.

The company also cites conflict of interest. The state paid management company Accenture $300,000 to evaluate the bids and make recommendations. It was later revealed that Accenture has a long history with Office Depot worth millions of dollars over several years.

Gray also questioned that connection, partly because the bidding process seemed to favor Office Depot with its numerous retail outlets. Despite having no retail stores, Corporate Express promised faster delivery.

In court, Accenture and Office Depot argued there was no collusion and that the deal was fairly awarded. State law does not require this kind of contract go to the lowest bidder.

Administration Secretary Britt Cobb has various options. He can throw out the deal and rebid; he can share the contract between the two competing companies or he can disregard the judge and keep the current contract.

Whatever his decision, more legal action is expected.