Old Wives' Tales
Radio & TV
Toxin du jour
Claim: The Home Depot chain of stores is declining to do business with the federal government.
Example: [Collected on the Internet, 2002]
Origins: In June 2002, the Atlanta-based Home Depot chain of hardware and home-improvement stores instructed their retail outlets, as a matter of corporate policy, to decline any purchase of materials made by or for the federal government. This policy applies regardless of the method of payment, whether it be cash, a government purchase order, or a government-issued credit card.
The reasons for this policy were explicated by a Home Depot spokesman who said that "Engaging in business practices with the federal government is not a strategic focus of the Home Depot," and that "The Home Depot is not and does not plan to become a federal contractor or subcontractor." (The same spokesman also said that it was a restatement of an old policy, although memoranda outlining procedures regarding the acceptance of government purchases were only sent to Home Depot stores within the last few weeks.)
The issue, according to The Washington Post, was that Home Depot was taking steps to ensure they do not become classified as a government contractor, and thereby subject to reams of paperwork and cumbersome government regulations regarding equal-opportunity hiring practices:
The Atlanta-based retailer recently circulated a memo to employees instructing them not to accept government credit cards, purchase orders or cash from any customer buying on behalf of the federal government. The reason: Home Depot is not a federal contractor and doesn't want to become one.On 17 June 2002, Home Depot posted a somewhat murky press release on their web site, one which did little to clarify the reasons behind their policy:
"When you do business with the federal government, you have an obligation to adopt a lot of accounting and reporting obligations," said John Simley, a Home Depot spokesman. "You have to put in place a whole lot of clerical machinery to make that happen. We are not equipped to do that."
Simley, the Home Depot spokesman, said a firm that does $50,000 worth of business in a year with the federal government automatically becomes a federal contractor and must file reams of paperwork.
That's why a Home Depot subsidiary called Maintenance Warehouse, which Home Depot acquired in late 2000, pulled out of its contract with the federal government earlier this year.
The Home Depot takes compliance very seriously," said Frank Fernandez, executive vice president and general counsel for the company. "Since we have never been a federally approved contractor, our intent was to re-state our existing policy for our stores and associates and remind them of their responsibilities in complying with related rules."A few weeks later, however, Home Depot suddenly announced it had reversed its "no government" policy:
"The Home Depot has an unwavering commitment to support its communities, federal and local government, and all disaster agencies in times of emergency and natural disasters through generous donations of supplies and materials," said Fernandez.
The Atlanta-based home improvement retailer said it intends to pursue federal government business, a change from its previous policy that precluded it from selling to any federal governmental agency or entity.Last updated: 30 November 2007
Home Depot said the decision to change its position was based on feedback from its associates, customers and a further evaluation of the systems and administrative requirements necessary to become a federal contractor.
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