Washington Closure Hanford has reached a settlement agreement in principle with the U.S. Department of Justice in a civil lawsuit over subcontracting at the Energy Department’s Hanford Site in Washington state.
The Justice Department has accused the former Hanford cleanup prime contractor of awarding small business subcontracts to front companies. Washington Closure’s contract for environmental remediation of Hanford’s River Corridor, which included small business subcontracting requirements, expired in September 2016 with most of the work completed.
The parties were scheduled to be in U.S. District Court for Eastern Washington on Friday to argue summary judgment motions, but two days earlier Judge Sal Mendoza Jr. ordered a 45-day stay of the case schedule. When the stay expires, the parties must either request the lawsuit be dismissed or file a joint status report.
Washington Closure had asked that the case be dismissed because it did not knowingly claim false credit under its Department of Energy contract for subcontract awards to small, woman-owned businesses DOJ claims were actually fronts or pass-through organizations for Federal Engineers & Constructors (FE&C) of Richland, Wash. FE&C was ineligible to compete for the contracts.
The Justice Department had asked for summary judgment on key Washington Closure defenses.
If the proposed settlement agreement is finalized and executed, it will resolve the litigation in its entirety, the parties said in a joint filing with Mendoza. “However, this proposed agreement in principle is subject to several specified contingencies and remaining issues that require further resolution between the parties,” they told the judge.
Two other defendants in the case have settled since late summer. Both claimed no wrongdoing, but said they wanted out of the expensive and complicated litigation. Sage Tec, a small, woman-owned business, settled for $235,000. FE&C, which teamed with Sage Tec on two subcontracts, settled for $2 million.
