Lawsuit filed over Hanford subcontract; claims bid rigging

A losing bidder for a Hanford subcontract has sued Washington Closure Hanford and two of its subcontractors in federal court, claiming bid rigging and other unfair practices.

As the result of false claims, the Department of Energy did not receive the best price for environmental cleanup work at Hanford, alleged Salina Savage and her firm, Savage Logistics of Richland, in a lawsuit filed in Eastern Washington Federal District Court.

Washington Closure, Federal Engineers and Constructors, and Phoenix Enterprises Northwest, all named in the lawsuit, have denied the allegations.

The Department of Justice declined to intervene in the lawsuit after apparently conducting an investigation, but has asked to receive copies of all filings in the case.

"It is significant that the U.S. government chose not to join the lawsuit," said Washington Closure in a statement. "We believe the case has no merit and expect the court will reach the same conclusion."

Jonetta Everano, a former Federal Engineers and Constructors (FE&C) employee in Richland, formed Phoenix Enterprises in February 2009 with FE&C as a 49 percent owner. Four months later, she won her company's first job, a Washington Closure Hanford subcontract worth about $4.8 million.

At the time of the procurement she had no separate address from Federal Engineers and Constructors and shared the same telephone number, only signing a sublease after the subcontract was awarded, the lawsuit alleges.

Savage claimed that FE&C and Washington Closure officials had sought to find a front company for FE&C to compete for certain Washington Closure work and alleged that constituted bid rigging.

The subcontract to haul contaminated materials to a central Hanford landfill was advertised as an award for certain types of small businesses, such as disadvantaged or veteran owned.

However, the Small Business Administration later determined that Phoenix Enterprises did not qualify, according to the court complaint.

The lawsuit also alleged that defendants knew that the contract would be extended to 67 weeks, which was information not available to Savage Logistics. If Savage Logistics had known that, it would have submitted a bid that was at least $300,000 lower than the winning bid, according to the court complaint.

Washington Closure has a Department of Energy contract goal to do 65 percent of its subcontracted work with small businesses. It may target certain subcontracts for the goal, but has no requirement that specific subcontracts be used to meet that goal, said Washington Closure spokesman Todd Nelson. Washington Closure did not report the subcontract to DOE as part of meeting that goal, he said.

FE&C views the lawsuit as frivolous, said FE&C co-owner Dick French. Everano worked for FE&C when she formed her company, and it did provide teamsters to her company when she won the subcontract, but other allegations are false, he said.

FE&C has had no ownership of Phoenix Enterprises for a year and a half and Everano has established her own office in Richland, he said. Everano was not available for comment this week.

FE&C and Phoenix Enterprises have asked the court to dismiss the case.