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.
