SAN FRANCISCO (CBS/AP) — San Francisco has reached a $4.25 million settlement with Office Depot Inc. over allegations that the company overcharged for office supplies.

Mayor Edwin Lee signed a Board of Supervisors resolution Tuesday authorizing the settlement, which includes a $3.75 million payment and a $500,000 purchasing credit.

A 2009 audit by the city controller found that Office Depot deprived the city of an estimated $5.75 million in discounts mandated under its five-year, $18 million contract. Office Depot initially claimed the overcharges totaled less than $50,000 and were the result of accounting errors.

Office Depot spokesman Jason Shockley said the Boca Raton, Fla.-based company strongly disputes the audit’s conclusions but views the settlement as “a reasonable compromise.”

Last year, the company settled contract disputes with government agencies in Missouri and Florida.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services may have contributed to this report.)


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