Company Self-Reported Violations of Contractual Provisions
WASHINBGTON – The United States Attorney’s Office for the District of Columbia reached an agreement with Coloplast, a medical product manufacturer, in the amount of $14,547,347 to settle claims that the company violated the Trade Agreements Act and the Price Reduction Clause in its business dealings with the Department of Veteran’s Affairs. The settlement was announced today by U.S. Attorney Matthew M. Graves and VA Inspector General Michael J. Missal.
Coloplast self-disclosed that it misapplied the Trade Agreements Act substantial transformation standard, which resulted in (a) Coloplast reporting incorrect countries of origin for several Coloplast-manufactured products and (b) some products remaining on the contract after switching manufacturing locations to nondesignated countries. Coloplast also self-reported that it misapplied the Price Reductions Clause by failing to provide the Government with discounts pursuant to the terms of the contract. This failure led to overbilling the United States for certain medical and pharmaceutical products sold to the United States.
“The United States government expects its business partners to act in good faith and follow the rules they agreed to follow,” said United States Attorney Matthew M. Graves. “We cannot overlook the great potential for harm when a company provides products from non-compliant countries.”
“This settlement is significant in both its monetary value and in the message it sends to other corporations who wish to do business with VA—our nation’s veterans deserve the highest quality products, at the best possible prices available, and that comply with all applicable laws and regulations,” said VA Inspector General Michael J. Missal. “We will continue to work with our partners at the US Attorney’s offices to ensure that VA is treated fairly and appropriately under the requirements of the law.”
The case was handled by the Civil Division for the U.S. Attorney’s Office for the District of Columbia, in collaboration with the VA Inspector General’s Office of Investigations and Office of Audits and Evaluations, VA National Acquisition Center, and VA Office of General Counsel. U.S. Attorney’s Office Civil Division Deputy Chief John C. Truong investigated the matter, with valuable assistance from VA Inspector General Supervisory Auditor Danielle Aguilar and Chief Investigative Counsel Katharine Brown.
The claims alleged here are allegations only, and there has been no determination of liability.