RPM / Tremco: Government Discounts, Roofing Products and Separate State Claims

RPM International and Tremco paid $60.9 million to resolve allegations that Tremco withheld government discounts on roofing products and services, while separate state claims remained outside the federal settlement. The Justice Department’s announcement also alleged that Tremco sold expensive materials to government buyers without disclosing that it manufactured and sold the same materials at lower cost. Someone inside the business could know both prices, and know what was actually going onto the roof.

The department announced the payment on August 28, 2013. Ohio-based RPM and its subsidiary Tremco resolved a False Claims Act case brought by a former Tremco vice president. Tremco manufactured construction products and supplied roofing goods and services through two General Services Administration contracts. The allegations reached both the commercial information used to price government purchases and the products sold under those contracts.

What Is GSA Fraud?

GSA fraud in the RPM / Tremco case involved allegations that the company withheld commercial-sales information and failed to give government buyers discounts required by its roofing contracts. The government alleged that Tremco knowingly breached those obligations from January 2002 through March 2011, leaving taxpayers to pay more than they should have for its products and services.

The General Services Administration’s Multiple Award Schedule program gives contractors access to government buyers through a shared purchasing arrangement. Agencies can order commercial supplies and services at stated prices over a stated period. In return for access to that market, the Justice Department explained, contractors agreed to disclose their commercial pricing policies and practices. The government was negotiating with information the seller controlled.

Under the traditional pricing framework, commercial-sales disclosures covered actual discounts and concessions, including departures from written policies. A printed price list could show the official price while leaving out the deals that particular customers actually received. Those deals were part of the information the General Services Administration needed to negotiate.

The agency’s Schedule negotiation rules tied government pricing to a designated commercial customer’s deal. Under the traditional contract terms, a discount to that customer could require a corresponding government price reduction. The promise covered later discounts, not just the price offered when the contract began.

The Tremco allegations covered the bargain at both stages: the information provided to the General Services Administration and the handling of later discounts. The government alleged that Tremco failed to report discount changes for comparable commercial customers and failed to pass those discounts on to government customers. The employee who knows how a commercial customer obtained a better price understands something the government invoice never shows.

Withholding a required discount cheats the buyer out of the bargain it negotiated. It also gives the seller an advantage over competitors that honor their pricing commitments. The Justice Department pointed to that competitive harm in announcing the Tremco settlement.

Roofing Products Sold as Superior

The roofing-product allegations concerned what government buyers received for their money. The Justice Department alleged that Tremco marketed generic products as a superior line of the same product and used a defective adhesive formula in its roofing systems. It also alleged that the company marketed expensive materials without disclosing its own lower-cost versions of the same materials.

The alleged pitch asked government buyers to pay for superiority while the same materials were available for less from the same seller. An insider familiar with the product line could connect a difference in selling price with the underlying material, rather than having to accept the marketing description at face value.

The adhesive allegation raises a separate product question. Commercial discounts help explain the price the government should have paid. Formulation and quality records help explain what the company supplied. In a roofing supply-and-service relationship, both comparisons belong beside the government order: the promised product and the promised price.

For an employee in product development, purchasing or sales, that distinction gives everyday knowledge a different significance. Knowing which materials share a formulation, how a product was described to a buyer, or what an internal quality review found can connect the product story to the transaction. Those are the connections we examine when assessing a product-based government procurement whistleblower case.

Separate State Claims Stayed Outside the Federal Settlement

The federal RPM / Tremco settlement did not resolve the whistleblower’s state actions. The lawsuit also alleged claims on behalf of several states under their false claims laws and named the City of Chicago among the governments involved.

That distinction matters to a reader who knows a state or local purchase. A person familiar with those purchases has a reason to bring forward what they know about the customer, the products and the prices, even when the company name and the federal settlement are already familiar.

What Are the Indicators of Government Procurement Fraud?

The indicators of government procurement fraud in this case are differences between the commercial deals, the information given to the General Services Administration and the roofing products represented to government buyers. A customer-specific discount missing from sales disclosures, a commercial price cut never passed on to government buyers, or a product description at odds with the company’s material information gives an insider something concrete to question.

For the pricing allegations, we connect commercial invoices and discount approvals with the sales-practice disclosures, the applicable contract and its modifications, and the government orders and charges.

For the product allegations, we connect the description offered to the buyer with the material supplied. Formulation and quality records can show what sat behind the marketing description. These are different sources of knowledge within a business: a sales employee knows how the price concession was approved, while a product employee knows whether the supposedly superior material differs from the generic line.

Transparency International’s 2024 paper, Transparency, Accountability, and Integrity of Public Procurement Systems, explains why publishing government data alone does not reduce procurement corruption: potential users can lack the resources to analyze and interpret it. In this case, the missing commercial discounts were information the seller allegedly failed to disclose in the first place. Someone who understands the commercial transaction can explain a discrepancy that a reader of the government paperwork would miss.

The Same Discount Problem in Office Furniture

The government alleged that Workrite, an office-furniture supplier, gave inaccurate commercial-sales disclosures and failed to extend lower prices under its General Services Administration Price Reductions Clause. A former sales manager brought that case.

The connection to Tremco is the commercial information behind a government price. The products were different, but both cases concerned alleged failures to disclose sales practices and provide required discounts. For a sales insider, a customer concession can be part of the government-contract story even when the sale was made to a commercial buyer.

How Much Money Can a Whistleblower Get From a Qui Tam Lawsuit?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In the RPM / Tremco case, the Justice Department said the former vice president would receive more than $10.9 million as a share of the recovery.

You Know the Price Behind the Proposal

If you know which discounts government buyers missed or how a roofing product differed from its sales pitch, talk with our whistleblower experts. We build your strongest government procurement whistleblower case around those differences, bring in GSA procurement whistleblower lawyers who understand commercial pricing and product representations, and stay beside you through the case.