Two Department of Energy contractors, Bechtel and what is now Amentum, will pay $57.75-million to resolve claims that a joint venture overbilled the government for work at the Hanford Site in Washington, the Department of Justice said late Tuesday.
Bechtel and Amentum, the former AECOM Energy & Construction, admit no wrongdoing by their subsidiary Waste Treatment Completion Co. in connection with construction of the Waste Treatment Plant (WTP) at Hanford. The companies do agree to pay for an independent monitor to scrutinize craft labor billing practices at the site.
The questionable billing practices occurred before Los Angeles-based AECOM sold off its government contracting business to investors who acquired what is now Amentum. AECOM Energy and Construction, now part of Amentum, is the entity formally named in the settlement.
The unit was part of AECOM’s former Management Services business, which was sold in January of 2020 and now operates as Amentum, AECOM said in a financial filing this week. “AECOM has no current or future involvement in the WTP project,” Los Angeles-based multinational said.
The settlement agreement was announced in a press release by the U.S. attorney’s office for the Eastern District of Washington.
Bechtel and the former AECOM unit admit they improperly billed DOE for many hours of “idle time” by electricians, pipefitters and other skilled labor at the project over several years, according to the Justice release.
The case began in 2016, when four whistleblowers at WTP made allegations of overbilling by the companies. In May 2017 the whistleblowers filed a complaint under seal in U.S. District Court under the False Claims Act, which requires the federal government to investigate such allegations and, if warranted, seek recovery.
The Justice Department formally intervened in the case in February. The whistleblowers who prompted the case will share in more than $13.7 million of the settlement, as allowed under the False Claims Act.
The Waste Treatment Plant is designed to convert much of the 56 million gallons of radioactive and chemical tank waste at the former plutonium complex into a stable glass form for disposal. Conversion of low-activity waste is supposed to start by 2023.
“It is stunning that, for nearly a decade, Bechtel and AECOM chose to line their corporate pockets by diverting important taxpayer funds from this critically essential effort,” Joseph Harrington, first assistant U.S. attorney for the Eastern District of Washington, said in the government release.
“As a company, we felt it was in the best interest of the project and our customer to resolve this matter so that we can avoid the distractions and expenses of a protracted legal proceeding, move beyond these issues, and fully focus on completing our work at such a critical time for WTP,” said Barbara Rusinko, president of Bechtel’s Nuclear, Security & Environmental global business unit.
In a Wednesday press conference, conducted via Zoom, Harrington took issue with Bechtel’s characterization of the situation, saying the companies had basically admitted to overbilling for idle time. The attorney also referred to the companies as “repeat offenders” who have been cited for overbilling DOE before.
“The company steadfastly denies any wrongdoing and reached this resolution in order to avoid the cost and distraction of litigation,” Amentum spokesman Keith Wood said in a statement. “This settlement will allow us to remain focused on the important mission of environmental clean-up work for the Department of Energy at the Hanford site,” Wood said.
The two contractors will pay the salary for a two-person compliance review team will make up to a combined $330,000 per year over the next three years.
The review team will file quarterly reports with Hanford as well as the Office of Inspector General for DOE. Should the defendants be found in breach of the compliance agreement they could be assessed up to $10 million in additional damages, the U.S. attorney’s office said.
