By Annette Carey
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.
The Justice Department said Bechtel and Aecom 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.
The practice of billing for unreasonable idle time continued even after the Bechtel and Aecom knew they were being investigated, the Justice Department said.
The total overpayment by DOE to the companies was nearly $26 million, with a higher total to be paid under the agreement as punishment.
“Providing for multiple damages and significant penalties means that a company or individual can’t just falsely claim payments, get caught and then pay back the amount they stole,” said Dan Fruchter, assistant U.S. attorney.
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.
WORKERS TO SHARE IN SETTLEMENT
The four whistleblowers 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.
This is the second time that Bechtel and its subcontractor 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.