Ex-Hanford contractor to pay $3M to settle fraud allegations

RICHLAND, Wash. (AP) — A former Hanford contractor has agreed to pay about $3 million to settle allegations of fraud in reports to the federal government on its small business subcontracts.

CH2M Hill Plateau Remediation Co. had its costs for environmental cleanup at the nation’s most contaminated nuclear site near Richland, Washington, reimbursed by the federal government. The company was also eligible for incentive pay for awarding subcontracts to small businesses that the Small Business Administration designated as being in Historically Underutilized Business Zones.

The investigation into CH2M’s small business subcontracting was the result of a 2014 lawsuit filed by Savage Logistics, a Richland small business now called Apogee Logistics, and owner Salina Savage.

The latest complaint in the lawsuit alleged that CH2M knew that two of its subcontractors were not HUBZone businesses when it issued contracts to them, but falsely reported to the Department of Energy that they were.

Jacobs Engineering, which purchased CH2M, including its Hanford contract in 2017, declined to comment, The Tri-City Herald reported.

It has not admitted liability, according to the settlement agreement signed Thursday. The agreement was reached to avoid the delay, uncertainty, inconvenience and expense of protracted litigation, according to the settlement agreement.

Savage and her company will receive almost $866,000 of the settlement under the federal False Claims Act, which rewards whistleblowers with some of the money recovered. CH2M also is required to pay Savage and her company about $1.3 million in legal costs.

About half of the $3 million settlement is for restitution of costs to the federal government.

CH2M was the Hanford nuclear reservation’s environmental cleanup contractor for projects including working on demolition of the Plutonium Finishing Plant and groundwater cleanup for about 12 years until its contract expired this year. It employed about 1,700 workers.

In its last annual evaluation CH2M earned $17.2 million in incentive pay.

About two-thirds of the plutonium from World War II through the Cold War for the nation’s nuclear weapons program was produced at Hanford.

Taxpayers spend about $2.5 billion annually on environmental cleanup of the 586-square-mile (1,518-square-kilometer) site.