United States Attorney Jacqueline C. Romero announced Wednesday that Avantor, Inc., based in Radnor, PA, has agreed to pay a total of $5.325 million to resolve multiple alleged violations of federal law.
First, Avantor has agreed to pay $5 million to resolve allegations that one of its subsidiaries, VWR International, LLC (VWR), violated the False Claims Act by fraudulently overcharging federal agencies for goods purchased between 2008 and 2017. Avantor acquired VWR in 2017.
VWR is a global distributor of scientific and technical laboratory supplies, including chemicals, glassware, instruments, protective clothing, and production supplies. VWR has entered into procurement contracts with agencies of the United States to sell their products under agreed terms, including provisions under which VWR agrees to offer or provide federal government purchasers buying goods from VWR with the same or better prices that VWR offered or provided to an agreed-upon, private-sector basis of award customer.
The United States’ allegations under the False Claims Act arise from four government contracts VWR entered into with government agencies. These contracts include two Multiple Award Schedule Contracts VWR entered into with the U.S. General Services Administration (GSA) in 1995 and in 2015, which provided a streamlined process for federal government buyers to purchase goods from VWR at discounted prices and required VWR to meet specified conditions.
Several different United States agencies, including the Department of Defense, purchased VWR products under the GSA MAS Contracts, which provided for Most Favored Customer Pricing.
The contracts at issue also include a 2001 Blanket Purchase Agreement that VWR entered into with the National Institutes of Health, an agency of the U.S. Department of Health and Human Services and a 2005 contract VWR entered into with the U.S. Department of Veterans Affairs (VA) under Federal Supply Schedule 65 VI.
Both the NIH and VA made purchases from VWR under their respective contracts, which both contained best price provisions.
The United States alleged that VWR violated the False Claims Act when performing its obligations under these government contracts by failing to offer or provide federal government purchasers buying goods from VWR under the Schedule Contracts with Most Favored Customer Pricing; increasing pricing for federal government purchasers while not increasing prices for the Most Favored Customer; failing to provide federal government purchasers with the same rebates, discounts, incentives, and other favorable terms offered to the Most Favored Customer; failing to report and adjust the prices that VWR offered to federal government purchasers to be consistent with those offered to the Most Favored Customer; failing to report and reduce prices or make refunds to federal government purchasers, as required by the Price Reductions Clauses in the Schedule Contracts; and failing to report changes in VWR’s commercial pricing practices or policies from those disclosed to the federal government during the parties’ pricing negotiations and to reduce federal government pricing accordingly.
The United States alleged that, as a result of this conduct, VWR knowingly submitted false or fraudulent claims for payment to the United States in violation of the False Claims Act.
“Contractors are expected to understand and carefully comply with the requirements of federal contracts,” said Romero. “This settlement under the False Claims Act demonstrates that the federal government will hold accountable contractors that overcharge agencies by failing to follow the pricing terms of federal contracts, and should be seen as a warning to contractors that false claims have no place in government purchasing.”
“GSA’s Office of the Inspector General will continue to investigate any allegations of GSA contractors overcharging federal agencies at the expense of American taxpayers,” said GSA acting inspector general Robert Erickson. “I appreciate the hard work of those who worked on this case.”
