WINONA, Minn. – Fastenal, a leading distributor of fasteners and other industrial supplies, recently announced that it settled a contract dispute with the U.S. government.
Under the terms of the agreement, Fastenal will pay $6.25 million.
The company says that in July 2010 it received a letter from the Civil Division of the Department of Justice. The letter stated that the DOJ was ready to commence litigation due to a contract Fastenal entered into with the United States General Services Administration in 2000. An audit conducted by GSA Office of Inspector General in 2005-2006 suggested Fastenal had not complied with certain pricing and product requirement provisions and had potentially overcharged government customers under the contract.
The contract was discontinued in 2005.
In a press release issued Jan. 13, Fastenal stated: “We continue to believe that we complied with our obligation under the GSA contract in all material respects. However we felt a continuation of our dispute with the DOJ and GSA was not the best use of our resources.”
On Jan. 18, Fastenal also announced its 2010 fourth quarter and annual earnings. 2010 net sales were nearly $2.3 billion, an increase of 17.6 percent over 2009. For the fourth quarter, net sales were nearly $574,000, a 20.3 percent increase over 2009.
Fastenal also declared a dividend of 50 cents. The company stated that it will pay the dividend on Feb. 25 to shareholders of record on Feb. 15.