DOE Agrees to Pay Boeing $4.5 Million in Rocky Flats Legal Fees
WC Monitor
10/10/2014
After nearly 10 years of dispute on the matter, the Department of Energy last week agreed to pay Boeing $4.5 million for legal fees the company paid fighting claims related to the Rocky Flats Nuclear Plant. In 1996 Boeing merged with Rockwell International, the M&O contractor at Rocky Flats at the time of the 1989 Federal raid for environmental law violations. The conflict between DOE and Boeing centered on what could be considered allowable legal costs for a contractor defending itself on accusations of false claims brought forth by an individual. The U.S. Civilian Board of Contract Appeals ultimately found that the contractor can recover costs from DOE on claims in which it prevailed but can’t be reimbursed for defending itself for claims where the company was found liable.
Following the Rocky Flats raid, Rockwell was hit by allegations under the False Claims Act alleging that it misrepresented or failed to disclose environmental concerns at the site. A jury found the company liable on three of ten alleged related claims in 1999, and DOE initially paid the company about $4 million to cover all defense costs incurred up to a 1995 DOE motion to leave. In 2005, Boeing claimed an additional $11.3 million in costs for defensing itself from the claims from 1995 onward. However, DOE balked and asked for the company to pay back the $4 million plus over $2 million in interest, citing regulations asserting that DOE is not required to pay for costs for charges involving contractor fraud or false statements.
The conflict ended up in the Civilian Board of Contract Appeals, which is tasked with resolving contract disputes between the government and its contractors. In 2008 the Board decided that the company can be reimbursed for only the claims where it prevailed. The final amount was worked out to be $4.5 million, according to a joint motion submitted to the Board recently on Sept. 30. Both parties have agreed not to seek any reconsideration of the decision. Boeing is “pleased to have reached an agreement with the Department of Energy to resolve these matters,” Boeing spokeswoman Joanna Pickup said in a written response this week. DOE declined to comment on the outcome of the litigation.
DOE Rejects Lawmakers’ Request For Delay in Changes to Retiree Benefits
WC Monitor
10/10/2014
The Department of Energy has rejected a request from members of Colorado’s Congressional delegation for a one-year delay in the implementation of proposed changes to benefits for Rocky Flats retirees. The administration of Rocky Flats benefits was moved to the Hanford tank farms contract in 2006 and has been performed by Washington River Protection Solutions since 2008. In June, WRPS notified Rocky Flats retirees that, starting in January, they will be moved to individual healthcare coverage. However, lawmakers took issue with the changes. “Rocky Flats retirees—many of whom are ill and on a fixed income—were not informed of any possible changes to their benefits until a decision was already made. There was no opportunity for the retirees to plan ahead or weigh in with the Department on the changes to their benefits they earned through years of service to our country,” states a Sept. 15 letter to DOE from Colorado Sens. Mark Udall (D) and Michael Bennet (D) and Reps. Ed Perlmutter (D) and Jared Polis (D).
The lawmakers urged DOE to delay the plan’s implementation for one year and keep benefits unchanged in 2015. “The proposed changes lack transparency or adequate plan comparisons, and this delay will enable the Department to conduct a more thorough review of the retiree health benefits,” the letter states.
However, in a reply last week, DOE said it “will not direct the contractor to delay the proposed changes to the retiree benefit program,” noting that the action would be similar to retiree benefit changes at other DOE sites. Through its regular quarterly review “WRPS found that changes could be made to provide Medicare-eligible retirees with options for coverage that are more closely aligned with today’s market,” the DOE letter states. “The retirees currently receive Medicare plus a plan providing Medigap coverage. Following this change, the retirees will continue to receive Medicare plus one of many Medigap plans of their choosing. In addition, the Health Reimbursement Account to be provided in this case is intended to provide the retirees the flexibility to choose coverage that best fits their specific needs.” WRPS conducted 14 informational meetings in the Denver area last summer and met with more than 2,000 retirees, according to the contractor.
Benefit Study Questioned
But the lawmakers also took issue with the benefit value study WRPS undertook to assess the changes. “WRPS was required to compare Rocky Flats’ plans with 15 companies from ‘similar’ industries. However, there are few industries that would qualify as similar to the Rocky Flats Plant,” the Colorado delegation’s letter states. “Rocky Flats workers were exposed to some of the most toxic and dangerous elements ever known, resulting in the development of by many of complex and debilitating health ailments. Despite these unique qualities of the Rocky Flats Plant, only three of the companies analyzed were government-related and could remotely compare to the Rocky Flats Plant. As a result, the Benefit Value Study was flawed because it was pre-determined to show higher costs for Rocky Flats retirees.”
