This was an interesting article. I can't imagine that Home Depot isn't
already in compliance with these rules. Could it be that the government.
is notorious for not paying quickly? I'd be interested to know if anyone
has heard any more about this, especially any comment from Home Depot. I
heard on the business news just this morning that Home Depot is expecting
big profits.
Sherry Wells
Kelly Pierce
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06/17/2002 07:25 AM
Please respond to
Kelly Pierce
As the story states below, one of the reasons why Home Depot has stopped
doing business with the federal government is because it does not want to
fall under the provisions of Sections 503 and 505 of the Rehabilitation
Act as well as other civil rights laws. It is unclear if and when other
companies will join Home Depot in refusing to sell product to the federal
government to avoid laws tied to the receipt of federal funds or
contracts.
Kelly
St. Louis Post-Dispatch
Sunday, June 16, 2002.
Home Depot stops doing business with federal government
By Andrew Schneider Of The Post-Dispatch
Company document suggests that home-improvement chain might not want to
fall under certain laws
Home Depot Inc., the nation's largest hardware and home-improvement
chain, has told its 1,400 stores not to do business with the U.S.
government or its representatives.
The Post-Dispatch checked with managers at 38 stores in 11 states. All
but two said they had received instructions from Home Depot's corporate
headquarters this month not to take government credit cards, purchase
orders or even cash if the items are being used by the federal
government.
"Engaging in business practices with the federal government is not a
strategic focus of the Home Depot," company spokesman Tom Gray said. "The
Home Depot is not and does not plan to become a federal contractor or
subcontractor."
When asked what the statement meant and what it had to do with purchases
by an FBI agent in St. Louis or an Environmental Protection Agency
investigator in Seattle or a supply sergeant for an Army Reserve unit in
Ohio, Gray declined to comment, other than to say it's an old policy.
But the store managers contacted said they received the policy within the
last couple of weeks.
Responding to an e-mail request for clarification, Gray said the refusal
to sell to the government was "a business decision based upon the
company's strategic direction."
The General Services Administration, the government's quartermaster, just
learned of the policy.
"I was contacted by the Department of Defense last week, and they said
that some of their people were stopped from making purchases at Home
Depot," Susan McIver, director of the GSA's Services Acquisition Center,
said Friday.
"Home Depot has not contacted us, so I've got no idea what their problem
is. We are checking with the other federal agencies to see what they are
encountering and then will call the company."
As of April, 384,520 government employees were using "GSA Smart Pay"
cards for purchases other than travel or fleet operations, McIver said.
Congress approved use of the cards to reduce paperwork and to streamline
the paying of merchants.
"Use of the cards is mandatory for purchases under $2,500," she said,
adding that last year, $3.7 billion was charged to the cards, which are
backed by Visa and MasterCard.
McIver called Home Depot's actions "puzzling."
"This is the first company I've ever heard of establishing a policy of
not doing business with the federal government. I find it hard to
understand," she said.
She described a continuous stream of calls to her office each day from
businesses eager to sell to the government.
Most of Home Depot's managers interviewed by the Post-Dispatch shared the
confusion. All the managers contacted declined to be quoted, but most
said they didn't know what was behind the company's refusal to sell to
the federal government.
Some, especially those near military bases and large federal complexes,
said the policy would cost Home Depot a significant amount of money, but
they would make no estimates of how much.
One Home Depot associate at a store in San Diego said, "It feels weird
telling some kid in uniform that I can't sell him 10 gallons of paint
because we don't do business with the government."
The notification that Home Depot sent from its Atlanta headquarters to
its stores offers little explanation of why the decision was made.
But the document, which was obtained by the Post-Dispatch, offers
elaborate detail on how the policy is supposed to be implemented:
- Under one scenario, a customer wants to buy 3,000 light bulbs and asks
that the product be delivered to a military base. "That transaction
should not be processed," the document says.
- Another scenario describes a person trying to purchase lumber and
presenting a purchase order listed to the GSA. "This transaction cannot
be processed," the document says.
OoA third scenario uses a customer who pays cash and asks Home Depot to
deliver the purchase to a federal address. The customer is told no, and
he asks to rent a Home Depot truck. "Since you are aware that the
transaction is for the federal government, you cannot process it," the
document says.
If store personnel are questioned by customers, the document advises,
they should respond that "our focus is directed at do-it-yourselfers and
private contractors" and "this has always been our policy."
The notification has a section that says commercial credit-card customers
will receive a notice with their June bill that purchases could not be
made "that would cause the company to be covered by or responsible in any
way for compliance with" three federal laws or executive orders:
OoExecutive Order 11246 of 1965, which bans discrimination against any
employee or applicant for employment because of race, color, religion,
sex or national origin.
- Section 503 and Section 505 of the Rehabilitation Act of 1973, which
requires affirmative action and prohibits employment discrimination by
federal government contractors and subcontractors.
- The Vietnam Era Veterans' Readjustment Assistance Act of 1974, which
requires that anyone doing business worth $25,000 or more with the
federal government must take affirmative action to hire and to promote
qualified targeted veterans, including special disabled veterans,
veterans of the Vietnam era, and any other veterans who served on active
duty during a war or in a campaign or an expedition. It would apply to
Gulf War veterans and those fighting the war on terrorism.
"We are going to the agencies who issued those three laws they mentioned
and try to determine whether those laws would have some kind of impact on
Home Depot which might explain its actions," McIver said.
"This will impact many agencies who might have needs to go to Home Depot.
But they can get those needs met by going to other stores."
A spokesperson for Lowe's Cos., the nation's second-largest home
improvement chain, said that it still sells to the government and that it
will continue to do so.
Home Depot might not want to sell to the government, but this month, it
reached agreement with the U.S. Labor Department to "recruit, screen and
refer" 40,000 job applicants to work in the company's new stores that are
being opened "every 47 hours."
Home Depot was founded in 1978. It operates in 49 states and overseas and
has a work force of 250,000 people. Last year, it had sales of $53.6
billion.
Andrew Schneider:\E-mail: [log in to unmask]\Phone:
314-340-8101
Published in the Business section of the St. Louis Post-Dispatch on
Sunday, June 16, 2002. Copyright (C)2002, St. Louis Post-Dispatch
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