Report - Home Depot stops doing business with feds

ST. LOUIS -- The 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 St. Louis Post-Dispatch reported Sunday.

The Post-Dispatch checked with managers at 38 Home Depot stores in 11 states. All but two said they had received instructions from Home Depot's corporate headquarters in Atlanta this month not to take government credit cards, purchase orders or even cash if the items are being used by the 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." He said it was an old policy.

But the store managers contacted told the newspaper they received the policy within the last couple of weeks.

Responding to the newspaper's request for clarification, Gray said the refusal to sell was "a business decision based upon the company's strategic direction."

The General Services Administration just learned of the policy, said Susan McIver, director of the GSA's Services Acquisition Center.

"Home Depot has not contacted us, so I've got no idea what their problem is," she said. The GSA was checking with federal agencies before calling the company, McIver said.

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. McIver said use of the cards is mandatory for purchases under $2,500. The cards are backed by MasterCard and Visa.

McIver called Home Depot's policy "puzzling."

"This is the first company I've ever heard of establishing a policy of not doing business with the federal government," she said. "I find it hard to understand."

Most of Home Depot's managers interviewed by the Post-Dispatch shared the confusion. All of the managers 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.

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."