Washington Closure Hanford agreed to pay $3.2 million to settle a civil lawsuit alleging subcontracting fraud at the Hanford Site cleanup in Washington state, the Department of Justice announced Friday afternoon.
The parties told U.S. District Judge Sal Mendoza Jr. on Thursday they had reached an agreement but did not release the amount at that time. The payment will bring settlements in the case brought by the DOJ to more than $5.5 million. Last year, Hanford subcontractors Federal Engineers And Constructors (FE&C) and Sage Tec settled, respectively, for $2 million and $235,000.
“Small business fraud not only harms the taxpayers and the vital cleanup mission at Hanford, but legitimate small disadvantaged businesses that do not have the opportunity to fairly compete for and perform subcontracts,” said Joseph Harrington, U.S. attorney for the Eastern District of Washington.
Washington Closure held the 11-year cleanup contract for Hanford’s river corridor that expired with most work completed in September 2016.
The case was brought in 2010 by Savage Logistics and its owner, Salina Savage, and joined in part by the Department of Justice in 2013 in U.S. District Court for Eastern Washington.
“This settlement allows us to move on and close out a successful contract, which focused on protecting the Columbia River,” said Peter Bengtson, Washington Closure spokesman.
Washington Closure’s contract required the award of subcontracts to small businesses and disadvantaged small businesses, such as those owned by women. It reported about $20 million in subcontracts to Sage Tec in 2010 and 2012 as awards to a woman-owned small business. The Department of Justice alleged Sage Tec was only a front company that served to pass through work to FE&C.
In court documents, Washington Closure said it relied in good faith on Sage Tec’s self-certification that it was a small business and did not knowingly misrepresent any information to the Department of Energy. FE&C and Sage Tec vigorously denied any wrongdoing and said that they settled only because of the prohibitive expense of a lengthy and complicated lawsuit.
