Construction Contracting
MOX Services to Pay US $10M to Settle False-Claims Charges
A view of the Mixed Oxide Fuel Fabrication (MOX) project while it was still under construction in April 2018.
Photo Courtesy of High Flyer
In a new development in the long story of a U.S. Dept. of Energy nuclear materials project that was terminated in 2018, the project’s prime contractor has agreed to pay the U.S. government $10 million to resolve charges of violating the False Claims Act, the Dept. of Justice says.
In announcing the agreement with South Carolina-based MOX Services LLC on March 7, DOJ said that the company knowingly submitted to DOE “false and fraudulent invoices for non-existent materials” and also took kickbacks from a subcontractor.
[View settlement agreement here.]
MOX Services formerly was named CB&I AREVA MOX Services LLC. According to the settlement agreement, the company “was established specifically to design, build and operate the project.” It had a cost-reimbursable contract with DOE’s National Nuclear Security Administration (NNSA).
According to the settlement agreement, MOX Services denied the allegations.
The agreement also states that it “is neither an admission of liability by MOX [Services] nor a concession by the United States that the civil action is not well founded.”
MOX Services had a lead role in building the Mixed Oxide Fuel Fabrication Facility at DOE’s Savannah River Site in Aiken, S.C. The facility was to change weapons-grade plutonium into mixed-oxide fuel rods to be used in nuclear power plants.
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ENR reported in 2018 at the time of the project's cancellation, that the project's construction had begun in August 2007. it had a budget of $4 billion. But the project experienced delays and cost overruns and then-DOE Secretary Rick Perry said it should be terminated.
In November 2019, NNSA said that if the project had continued, it would not have been completed until 2048 at a cost of $17 billion.
In the case that led up to the new settlement, the government alleged that MOX Services had the obligation to confirm the receipt and acceptance from subcontractors of any materials before MOX Services approved and submitted claims for the materials.
DOJ also said that one subcontractor, Wise Services Inc., sent MOX Services “hundreds of invoices charging millions of dollars for materials that did not exist.” MOX then sent those false invoices to DOE, according to the Justice Dept.
DOJ also contended that “MOX violated its obligation to uncover that Wise’s invoices were for materials that were non-existent.”
In addition, the government alleges that MOX Services personnel “solicited and received” improper kickbacks from Wise Services from Jan. 1, 2008, through Dec. 31, 2015.
An attorney for MOX Services did not immediately respond to an ENR request for comment.
The settlement stems from a February 2019 lawsuit that DOJ filed against what was then CB&I MOX Services LLC and Wise Services.
In November 2019, DOE’s NNSA reached a settlement with MOX Services and its parent companies to resolve “contract closeout matters” related to the project.
NNSA said that the 2019 settlement resolved all of the litigation related to the project’s contract—except for any potential claims under the False Claims Act, the Anti-Kickback Act or for any civil or criminal fraud.
Kathryn Hewitt, an NNSA spokesperson, told ENR via email that the agency is "repurposing the partially constructed Mixed Oxide Fuel Fabrication Facility," or MOX. which she describes as "a robust, 400,000-sq-ft reinforced concrete, hazard category 2, security category-1 structure, for the Savannah River Plutonium Processing Facility."
Hewitt adds that the facility "will support NNSA's mission to reconstitute pit production capability." Plutonium pits are viewed as important components of nuclear weapons.
She says, "Reuse of MOX was selected as part of NNSA's two-site pit production strategy to meet Dept. of Defense requirements."
