The U.S. Department of Justice has declined to directly participate in a lawsuit accusing CH2M Hill Plateau Remediation Co., a Hanford contractor, of committing fraud related to subcontract awards.
CH2M Hill awarded subcontracts to a joint venture of Phoenix Enterprises Northwest and Acquisition Business Consultants, which the lawsuit accuses of not meeting small business requirements in the categories for which CH2M Hill claimed credit.
Its Department of Energy contract set a goal to award about $88 million in subcontracts to female-owned small businesses and $107 million in subcontracts to small disadvantaged businesses.
U.S. Judge Edward Shea recently unsealed the lawsuit after the federal government told the court it would not intervene in the case.
Savage Logistics, a female-owned company in Richland, filed the lawsuit against CH2M Hill and the two businesses in the joint venture in January.
A month before, the federal government filed a civil lawsuit against another Hanford contractor, Washington Closure Hanford, which accused it of falsely claiming credit for awarding small-business subcontracts in certain categories. The claims of improper subcontracting in that lawsuit also were originally made by Savage Logistics.
Although the Justice Department declined to intervene in the case against CH2M Hill, Shea agreed that no party could move to dismiss the case without first getting the written consent of the Justice Department.
The Small Business Administration determined that Phoenix Enterprises did not qualify as a small business when it was awarded a Washington Closure subcontract because it was too closely linked with Federal Engineers and Constructors, according to the most recent lawsuit.
Salina Savage of Savage Logistics informed CH2M Hill that the Small Business Administration determined that Phoenix Enterprises was not an independent business, but CH2M Hill awarded Phoenix Enterprises a contract worth $795,500, according to the lawsuit.
Federal Engineers and Constructors strongly denied that it was too closely aligned with Phoenix Enterprises or other subcontractors. It said that teaming arrangements among businesses for Hanford work is common and even encouraged.
CH2M Hill also awarded almost $1.5 million to the joint venture of Phoenix Enterprises and Acquisition Business Consultants under HUBZone subcontracts, according to the lawsuit. HUBZone subcontracts are reserved for small businesses in areas designated at Historically Underutilized Business Zones.
The lawsuit contends that both of the businesses in the joint venture would need to qualify as HUBZone businesses for the subcontracts to be valid, and Phoenix Enterprises was not considered a HUBZone business by the Small Business Administration, the lawsuit said. Acquisition Business Consultants had headquarters at the time in Wasilla, Alaska, and did not meet a requirement to have employees in Washington, the lawsuit said.
The lawsuit accuses CH2M Hill of knowingly awarding subcontracts set aside for small and HUBZone businesses to companies that did not qualify for the work.
Savage Logistics is asking for three times the damages that the federal government had, and $11,000 for each violation under the False Claims Act, which allows whistleblowers to be awarded triple the money recovered by the federal government.
CH2M Hill said it was unaware of the case. Phoenix Enterprises could not be reached, and Acquisition Business Consultants did not respond to a phone message left at a Tri-City office.