Hanford companies to pay $58 million for alleged overcharging

By Annette Cary / Tri-City Herald

The companies building the $17 billion vitrification plant at Hanford have agreed to pay nearly $58 million to the federal government to settle allegations that they billed the Department of Energy for fraudulent labor costs.

Bechtel Corp. and its primary subcontractor, Aecom, were sued in 2017 by four current or former Hanford site employees who said they were retaliated against for raising time-charging issues.

The lawsuit was joined by the Department of Justice and unsealed on Tuesday as the settlement agreement was announced.

“It is stunning that for nearly a decade, Bechtel and Aecom chose to line their corporate pockets by diverting important taxpayer funds from this critically essential effort,” said Joseph Harrington, first assistant U.S. attorney for the Eastern District of Washington state.

Bechtel and Aecom have agreed to fully cooperate and assist the Department of Justice in its ongoing investigation of individuals who helped or participated in fraudulent billing of the federal government, according to the Justice Department.

It said the two companies knowingly overcharged the Department of Energy for unreasonable amounts of time when union construction workers had no work to do between 2009 and 2019. The workers included electricians, millwrights, pipefitters and other skilled workers.

Hanford construction workers are not guaranteed a full day’s work, but are required to be paid for a minimum of two hours on days they are scheduled to work.

Management failed to schedule sufficient work to keep them busy, sometimes for several hours at a time, but still billed DOE for their idle time, according to the Justice Department.

At the end of weeks when construction workers had downtime during work days, the contractors would schedule overtime on Fridays and the weekend. Most Hanford workers are scheduled for 10-hour days Monday through Thursday.

The practice of billing for unreasonable idle time continued even after the lawsuit was filed in federal court, the Justice Department said.

Monitor to be hired

In the settlement agreement, Bechtel and Aecom denied liability. However, the Department of Justice claimed that the two companies had admitted to improperly billing DOE for labor costs.

“As a company, we felt it was in the best interest of the project and our customer (DOE) to resolve this matter so that we can avoid the distractions and expenses of a protracted legal proceeding, move beyond these issues and fully focus on completing our work at such a critical time for WTP (the Waste Treatment or vitrification plant),” said Barbara Rusinko, president of Bechtel’s Nuclear, Security and Environmental global business unit.

The vitrification plant has been under construction since 2002 and is scheduled to begin operating by the end of 2023 to turn some of the least radioactive waste held in underground tanks at Hanford into a stable glass form for disposal.

The Hanford nuclear reservation in Eastern Washington has 56 million gallons of radioactive and hazardous chemical waste stored in underground tanks after the production of plutonium for the nation’s nuclear weapons program from World War II through the Cold War.

Bechtel and Aecom bill the Department of Energy for their costs, including labor costs, to build the plant.

As part of the settlement agreement, Bechtel and Aecom will pay for a full-time independent monitor and assistant monitor of labor charging for three years. These will be selected by the Department of Justice and will report to the federal government.

Bechtel and Aecom could be liable for up to $10 million more if they violate the terms of the monitoring agreement, provide false information or fail to immediately correct any issues identified by DOE.

Workers to share in settlement

The four workers who filed the lawsuit will receive $13.8 million of the settlement money, and $25.8 million will be returned as restitution to the Department of Energy to use for ongoing environmental cleanup at the nuclear reservation.

In addition to Bechtel and Aecom, their subsidiary Waste Treatment Completion Co., formed in 2017, is responsible for the settlement.

The lawsuit was filed under the False Claims Act, which allows individuals who file a lawsuit that is later joined by the federal government a share of any settlement agreement. The lawsuit was brought by Kip Daly, Julee Leavitt, Gene Turner and Justin Rohrer.

This is the second time that Bechtel and Aecom have paid millions of dollars to resolve allegations of fraud and overcharging on the vitrification plant project.

In November 2016 they reached an agreement with the Department of Justice to pay $125 million to resolve claims that they knowingly violated quality standards at Hanford and used substandard materials in constructing parts of the plant.

The total also included allegations of using federal funds to lobby Congress to, among other things, try to cut DOE’s budget for independent oversight of work on the plant, according to the Department of Justice.