The United States is suing the Savannah River Site’s management and operations contractor, Savannah River Nuclear Solutions (SRNS), and Fluor Federal Services, a parent company to the contractor, for allegedly committing fraud by claiming more than $5 million in “unallowable costs” dating to 2008 when SRNS took over the contract.
The U.S. is listed as the plaintiff in a 25-page complaint filed on Friday in the Aiken, S.C., division of the U.S. District Court for South Carolina. In the complaint, the federal government alleged that SRNS and Fluor knowingly overcharged the U.S. to pay for home office expenses and bid and proposal costs – a direct violation of its contract and of the cost transfer agreement that states the allocation of home office costs is unallowable under the contract. The federal government calculated 573 claims that violated the contract, spanning from Oct. 8, 2008 to Dec. 31, 2015.
In the first listed incident, SRNS and Fluor personnel submitted an incurred cost report for nearly $338 million for their 2008 services. But according to the complaint, the report included $1.19 million in home office costs and nearly $90,000 in bid and proposal costs for a total of more than $1.2 million in unallowable expenses.
Subsequent unallowable costs alleged by the federal government include $942,000 in 2009, $906,000 in 2010, $362,000 in 2011, $666,000 in 2012, $254,000 in 2013, and $481,000 in 2014. “Fluor Federal and SRNS received payment from DOE for these improper, unallowable, inflated, and fraudulent claims,” the complaint alleges. The federal government could receive three times the amount of the total violation, or $15.6 million, and between $5,500 and $11,000 per violation.
The U.S. is seeking between $5,500 and $11,000 per violation. In a joint statement from SRNS and Fluor, SRNS spokesperson Barbara Smoak said both parties have been trying to resolve the issue for five years and are “disappointed” that it has surfaced as a false claims matter rather than remaining under the Contract Disputes Act. “However, now that this action has been filed, we will vigorously defend our position,” Smoak said by email.
Chief Sellafield Decomissioning Officer Headed to SRR
Longtime nuclear industry manager Tom Foster on May 16 will become president and project manager of Savannah River Remediation, the prime liquid-waste cleanup contractor at the Energy Department’s Savannah River Site near Aiken, S.C., the company announced Wednesday.
In his new role, Foster will lead liquid waste remediation activities at the site, which involves operating several facilities and cleaning up after after a unique chemical separation facility. Foster was most recently chief decommissioning officer for Sellafield Ltd., the prime contractor for the Sellafield nuclear site in the United Kingdom. AECOM of Los Angeles, a partner in the Savannah River Remediation consortium, is also a partner in Nuclear Management Partners, which owns Sellafield Ltd. until April 1, at which time it will become a wholly owned subsidiary of the U.K.’s Nuclear Decommissioning Authority.
Foster last worked at the Savannah River Site in 2008, when he was area operations manager for the former SRS prime, Washington Savannah River Co. He managed four tritium nuclear facilities at the site, and led final testing, startup, turnover, and integration of the SRS Tritium Extraction Facility project. The facility supplies radioactive hydrogen for the Pentagon’s nuclear arsenal.
Foster will replace Mark Schmitz, who has led Savannah River Remediation on an interim basis since February. Schmitz, the company’s chief operating officer, took the reins after Stuart MacVean abruptly resigned as president on Feb. 11 after about a year in the top spot, and more than four years with the company.
An early challenge Foster will face as president is dealing with the leaky 3H Evaporator that helps boil down liquid waste from Savannah River’s H-Area Tank Farm into so-called salt cake waste that takes up less space in waste tanks. Savannah River Remediation confirmed the evaporator was leaking Feb. 17.
The 3H Evaporator, since turned off, is one of two evaporators at the site. With only one working evaporator, ongoing chemical separation operations at H-Canyon will fill the H-Area Tank Farm with waste in about three years, according to the Defense Nuclear Facilities Safety Board.
Foster will also be at the helm of Savannah River Remediation’s effort to nab the site’s next big cleanup contract. The company’s $4.1 billion liquid waste cleanup contract expires on June 30, 2017; DOE’s Office of Environmental Management plans to release a draft solicitation for a follow-on contract on March 31.
