The Hanford Site’s tank farm contractor has agreed to pay a $5.275 million settlement to resolve federal allegations of time-card fraud.
Washington River Protection Solutions (WRPS) was accused of submitting false claims to the Department of Energy between October 2008 and July 2013 concerning internal audit processes, along with time cards seeking payment for worker overtime and premium pay. The previous Hanford tank farm contractor, CH2M Hill Hanford Group, agreed in 2013 to pay $18.5 million to settle civil and criminal allegations of time-card fraud from 2005 to 2008.
Federal law enforcement advised WRPS when it secured its contract in 2008 of active, systemic time-card fraud by the workforce at the waste storage tank farms, according to the Department of Justice. But WRPS allegedly failed to take any steps until after July 2013 to change its time-card procedures.
“It is deeply concerning that, in the wake of WRPS’s predecessor, CH2M Hill Hanford Group’s previous admission to criminal timecard fraud conspiracy with employees at the tank farm … that WRPS continued to bury its head in the sand and allegedly allowed much of the same timecard fraudulent practices to continue,” Michael Ormsby, U.S. attorney for the Eastern District of Washington, said in a prepared statement. The contractor’s continued use of the same loose overtime procedures was, at a minimum, reckless and irresponsible conduct by its managers and executives, the Department of Justice said.
“WRPS strongly disagrees with the conclusions of the Department of Justice and has denied any wrong doing relating to its timekeeping or internal audit practices over the course of its performance of the Tank Operations Contract,” WRPS said in a statement Thursday. The company accepted the settlement to avoid the cost and distraction of litigation relating to events that occurred several years ago, it said.
The Department of Justice accused WRPS of allowing workers to not fully account for their claimed overtime work. The Department of Energy could not determine to what extent personnel actually worked that overtime, the Department of Justice said.
WRPS also allowed its workers to claim overtime work as “emergency call in,” which paid a premium, the Department of Justice alleged. Under the collective bargaining agreement for the tank farm workforce, workers could only claim the emergency call in only in case of an actual emergency and when given less than 16 hours’ notice of an overtime shift. WRPS almost always allowed the emergency pay, costing DOE hundreds of thousands of dollars in inflated labor rates, the Department of Justice said.
In addition, WRPS installed its own general counsel as head of the contractually required Internal Audit Department for the first three years of the contract. “WRPS’s arrangement was problematic for a number of alleged reasons, including that WRPS’s general counsel allegedly had no auditing experience,” the Department of Justice said. The general counsel consistently avoided providing any meaningful oversight, DOJ alleged. It added that as DOE became aware of the issue, it required WRPS to hire a new internal audit manager who could exercise independent judgment.
“This settlement shows that prime contractors should be wary of cutting corners on any contractually required internal auditing obligation,” Ormsby said. “To its credit, WRPS appears to have recently remedied the problem.”
After July 2013, WRPS took significant steps to address its time-card fraud problem, principally by altering its procedures, instituting a proxy card system, and negotiating changes in the collective bargaining agreement, the Department of Justice said.
Washington River Protection Solutions is a partnership of AECOM and Atkins, charged with managing 56 million gallons of chemical and radioactive waste produced by decades of plutonium production at Hanford.
