Bechtel, Ex-AECOM Unit Settle U.S. Cleanup Site Labor Overbilling Suit
Bechtel and AECOM Energy and Constructon Inc., now operating as Amentum, have agreed to pay $57.8 million to the federal government to settle a whistleblower False Claims Act suit alleging the firms were aware of overstated work-hours billing to the U.S. Energy Dept. over a decade in building a multibillion-dollar radioactive waste treatment plant at the Hanford nuclear cleanup site in southeast Washington state.
The original lawsuit, brought in 2017 by four whistleblowers who at the time were current or former contractor employees, claims that from 2009 to 2019 the firms inflated work hours for hundreds of electricians, millwrights, pipefitters and other craft workers in labor charges billed to DOE. The U.S.Justice Dept. joined the lawsuit in February 2020.
As part of the cost plus award fee contract, craft personnel were paid for a set amount of idle time if on the job, but the suit contends Bechtel and AECOM falsely billed for work not performed by allowing “unreasonable and unallowable idle time” and by not properly managing workers’ time or assigning sufficient work.
The estimated $17-billion vitrification plant, a multi-structure complex under construction for nearly two decades, is intended to treat for disposal millions of of gallons of nuclear and hazardous wastes stored at Hanford, a former weapons production site dating to World War II. Testing of its first facility is set to start next year, with operation to begin in 2023.
DOE Inspector General Teri Donaldson said the billing of "tens of millions of dollars of false claims” continued even after agency officials notified the defendants that the costs were unallowable.
Bechtel and the former AECOM unit do not admit to the wrongdoing but will pay $13.75 million to the four whistleblowers and $25.79 million to the U.S. government for DOE use at Hanford. The subsidiary was spun off in January to private equity investors for $2.4 billion and rebranded as Amentum.
In addition to fraud allegations, each whistleblower sued his or her respective contractor employer for whistleblower retaliation. Those claims were resolved but with no details disclosed in a joint statement from their attorneys.
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The settlement also requires Bechtel and Amentum to pay for independent monitoring for three years of labor charging on the project, with the monitors reporting directly to DOE. The firms face an added $10-million fine if they violate terms of the monitoring agreement.
“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 the project, said Barbara Rusinko, president of Bechtel’s nuclear and environmental global business unit.
Amentum spokesman Keith Wood said the firm "steadfastly denies any wrongdoing and reached this resolution in order to avoid the cost and distraction of litigation. This settlement will allow us to remain focused on the important mission of environmental cleanup work for the Department of Energy at the Hanford site."
