Mike Nartker
WC Monitor
4/04/2014
The Department of Energy and Fluor-B&W Portsmouth, LLC, the D&D contractor for the Portsmouth site, are in an apparent dispute over what costs, if any, FBP will be responsible for from an incident that occurred last year involving falsified records. DOE has warned FBP that costs related to the incident are being considered unallowable based on the contractor’s “conclusion that there is credible evidence of FBP and subcontractor employees committing a violation of Federal criminal law involving fraud,” according to an Aug. 7, 2013, letter from the Department that WC Monitor recently obtained through a Freedom of Information Act request. FBP, however, believes that all costs tied to the incident should be considered allowable based upon its interpretation of the Federal Acquisition Regulation (FAR), a contractor spokesman said this week, adding that the issue is still under review by the Department. DOE did not respond to repeated requests for comment on the issue.
Last May, FBP fired 14 workers at the Portsmouth D&D project after an investigation found that records associated with radiation detectors had been falsified. The records appeared to have been changed to cover instances where the radiological monitors had been kept in service after failing a source check. FBP said at the time that there had been no evidence that contaminated items may have been improperly released from a radiological area as result of the use of detectors that did not pass source checks. Among the costs DOE said in its August letter that it would consider unallowable were:
- Those incurred between January 2012 and March 2013 related to “FBP erroneously allowing instruments that failed the daily background or source checks to be marked as satisfactory and put into service without taking corrective action”;
- Those incurred “in connection, or in any way related to” at least five FBP managers’ and at least two RCT employees’ alteration or destruction of records or other false or improper charging or recording of costs;
- Subcontractor costs that involved at least six subcontracted employees “who had altered records including the Senior Radiological Control Technician that may have known about the fraudulent acts”;
- All costs incurred by FBP managers and employees “for the investigative activities performed between April 8, 2013 and July 16, 2013”;
- Those tied to the FBP-initiated extent of condition investigation of “all Daily Source Check Sheets and Surveys going back to March 29, 2011, the date of transition”;
- Those tied to the rehiring of subcontracted employees; and
- Those tied to “potential litigation/lawsuit stemming from the FBP actions.”
DOE Says It’s ‘Very Concerned’ Over FBP’s Stance
In its August 2013 letter, the Department gave FBP 60 days to provide information that showed segregation of all costs identified as unallowable, identification of any costs previously invoiced that may have related to the falsified documents and any justification or rationale for why any costs should be considered allowable. However, in a Nov. 4, 2013, letter, also recently obtained by WC Monitor through a FOIA request, DOE chastised the contractor for failing to provide the requested information, and pushed back against FBP’s stance that none of the costs should be considered unallowable. “DOE is very concerned that FBP would assert that there should be no unallowable costs when FBP and subcontractor employees knowingly falsified records and the costs associated with these employees fraudulent activities were presumably billed to DOE. Further, DOE disagrees that FAR 31.205-15(b) would not apply in this circumstance,” the DOE letter states.
In its November letter, DOE gave FBP another 30 days to provide the information requested in the August letter, warning that if the contractor again “disregarded” the direction and failed to provide the information, “DOE will begin an audit to withhold and recover the costs DOE deems to be unallowable to the contract.” According to FBP, though, no such audit has yet been initiated.
