CH2M Hill Plateau Remediation Company Agrees to Pay More than $3 Million to Settle Hanford Subcontract Small Business Fraud Allegations

Spokane – Today, Joseph H. Harrington, Acting United States Attorney for the Eastern District of Washington, announced that CH2M Hill Plateau Remediation Company (CHPRC), a prime contractor at the Department of Energy’s Hanford Site, has agreed to pay $3,038,270 million to resolve allegations that CHPRC violated the False Claims Act by submitting false and fraudulent small business subcontract reports.

In 2008, CHPRC, a Washington subsidiary of CH2M Hill Companies Ltd., which is headquartered in Englewood, Colorado, was a DOE prime contractor responsible for environmental remediation and cleanup of the Central Plateau area of the Hanford Site, which includes the Plutonium Finishing Plant and other legacy plutonium production facilities. Pursuant to its contract, DOE fully reimbursed CHPRC for its costs, including hundreds of millions of dollars in subcontractor costs. Accordingly, CHPRC’s contract required that CHPRC make efforts to award a certain percentage of those subcontracts to small businesses, including businesses located in Historically Underutilized Business Zones (HUBZones). CHPRC’s contract also required CHPRC to regularly report to DOE regarding its efforts to subcontract to HUBZone businesses. CHPRC’s contract provided for fee-based incentives regarding CHPRC’s success in subcontracting to HUBZone businesses, and for the imposition of monetary penalties if CHPRC missed its goals and failed to exercise good faith efforts to award HUBZone subcontracts.

This settlement resolves allegations that CHPRC falsely reported to DOE regarding its HUBZone subcontracting efforts. Specifically, the settlement resolves allegations that CHPRC falsely represented that subcontract awards to two companies, Indian Eyes, LLC, and Phoenix-ABC A Joint Venture (“PABC”), were to HUBZone businesses, when in fact CHPRC knew that both entities did not have HUBZone status during the time period of the subcontracts.

Joseph H. Harrington, Acting U.S. Attorney for the Eastern District of Washington, said, “Small business fraud not only harms the taxpayers and the vital cleanup mission at Hanford, but legitimate small disadvantaged businesses that do not have the opportunity to fairly compete for and perform subcontracts. This resolution demonstrates that we will continue to work with courageous whistleblowers and our law enforcement partners to ensure accountability for small business fraud at Hanford and elsewhere.”

“The whistleblower complaint alleged that CHPRC knowingly misrepresented PABC and Indian Eyes as legitimate HUBZone entities and falsely claimed HUBZone credit and status as part of CHPRC’s small business subcontracting plan,” said Teri Donaldson, Inspector General of the Department of Energy. “This settlement affirms the OIG’s commitment to protecting the integrity of the Department of Energy’s procurement process to provide opportunities for small and disadvantaged businesses through programs like the Small Business Administration’s HUBZone and Disadvantaged Woman-Owned programs. The OIG will aggressively investigate any allegations of false claims, overbilling, kickbacks and any other fraud scheme threatening the Department of Energy and ultimately the American taxpayers. The OIG has enjoyed a very collaborative relationship with the United States Attorney’s Office and will continue to join forces with DOJ to investigate and hold accountable those perpetrating fraud against Department of Energy resources and programs.”

The case is captioned as United States of America ex rel. Salina Savage, et al. v. CH2M Hill Plateau Remediation Company, et al., 14-cv-5002-SMJ. The case originally arose out of a whistleblower complaint filed by Savage Logistics LLC, a Hanford-area small business, and Salina Savage, its owner. The whistleblowers will receive $865,907 as a result of the settlement. The investigation was conducted by the Department of Energy Office of Inspector General. The United States was represented by Assistant U.S. Attorneys Dan Fruchter and Tyler Tornabene.