Bechtel National and AECOM have agreed to pay $125 million to resolve allegations that they charged the Department of Energy for materials and work that did not meet the exacting standards required for nuclear facilities.
The settlement agreement also resolves allegations that Bechtel illegally used taxpayer dollars to lobby Congress for money for Bechtel’s work at the Hanford nuclear reservation north of Richland.
Bechtel is designing and building the Hanford vitrification plant, and AECOM is its primary subcontractor.
Allegations that Bechtel and URS, which was later acquired by AECOM, bought deficient material for more than a decade with taxpayer money “are deeply concerning given the obvious importance of nuclear safety,” said Michael Ormsby, U.S. attorney for the Eastern District of Washington, in a statement.
“The use of federal taxpayer dollars to pay lobbyists in an attempt to elicit more taxpayer dollars is unacceptable,” he said.
Construction on the vitrification plant began in 2002 as part of environmental cleanup at Hanford after decades of plutonium production for the nation’s nuclear weapons program. The vit plant is being built to turn up to 56 million gallons of radioactive waste into a stable glass form for disposal.
The case began when whistleblowers Walter Tamosaitis, Donna Busche and Gary Brunson — all key former managers on the vitrification plant project — filed a sealed complaint in federal court in 2013.
After more than three and a half years of investigation into their claims, the U.S. Department of Justice agreed to join the case at the first of this month on some of the plaintiffs’ allegations of nuclear quality violations and illegal lobbying. The case was unsealed after s settlement agreement was filed Wednesday.
The whistleblowers together are expected to receive 15 percent to 25 percent of the settlement — up to $31.25 million — under the False Claims Act, which allows whistleblowers to collect a portion of any damages awarded. An agreement will be worked out between the whistleblowers and the Department of Justice.
The settlement agreement bars Bechtel and AECOM from charging any of the $125 million cost to the federal government. Some of the money from the settlement is expected to be used for DOE environmental cleanup work.
Bechtel will pay $67.5 million and AECOM will pay $57.5 million, according to the settlement agreement. Neither admitted wrongdoing.
“We have performed our work at the (vitrification plant) ethically and professionally,” said Fred deSousa, spokesman for Bechtel in a statement. A protracted legal battle was not in the best interest of the vitrification plant project, he said.
AECOM pointed out that alleged events occurred before it bought URS.
“We take our responsibilities as a government contractor very seriously and have a demonstrated track record of serving our customers with honesty and integrity,” AECOM said in a statement.
Substantial improvements have been made by Bechtel and AECOM, including addressing employee concerns, since the lawsuit was filed, said Gary Petersen, vice president of federal programs for the Tri-City Development Council. The local DOE, Bechtel and AECOM leadership all are new to the vitrification plant project since that time.
The civil lawsuit alleged that from 2001 to June 2013, Bechtel and URS did not comply with rigorous nuclear quality requirements on the project.
Examples included allowing the use of grout not formulated to withstand high radiation levels and accepting piping without the required hardness to withstand a severe earthquake, according to plaintiffs. In other instances, it accepted materials and equipment that had not been shown to meet nuclear quality standards.
Plaintiffs cited repeated incidents in which they said welds on tanks, duct work and other equipment was accepted even though it either did not or could not be shown to meet nuclear quality requirements.
Allegations of illegal lobbying include an assertion that Bechtel used taxpayer money to pay a lobbyist in 2009 and 2010 to meet with the project’s critics in Congress to downplay the significance of safety-related technical concerns raised by the Defense Nuclear Facilities Safety Board.
Bechtel also was accused of using taxpayer money to secure an extra $50 million in federal money for the project in 2011, when the extra money was feared to be in jeopardy because of the defense board’s concerns.
“Illegal lobbying contravenes the established lawful process that is designed to provide independent federal oversight of contractors’ performances,” Ormsby said.
Attempts to lessen the effectiveness of the defense board, as alleged, “is shameful and must be blunted, penalized and deterred in the starkest manner possible,” he said.
Because of DOE concerns about the vitrification plant’s quality assurance program before May 2013, DOE has required Bechtel to review much of the equipment installed in vitrification plant buildings where construction is ongoing. Construction of parts of the plant that will handle high level radioactive waste has been stopped since 2012 because of technical issues.
DOE has taken other steps, including withholding more than $15 million of Bechtel’s possible $37 million incentive pay between 2013 and 2015.
Bechtel developed and is executing a formal plan to improve management.
Tamosaitis was the research and technology manager for the vitrification plant as a URS employee until he was removed from the project against his will in 2010. In a lawsuit separate from the one just settled, he sued and received a settlement from AECOM for $4.1 million in 2015.
Busche also sued after being fired from her URS job as manager of environmental and nuclear safety for the vitrification plant. She dropped her lawsuit against URS and Bechtel in 2014.
Tamosaitis and Busche believe they were removed from the project because they raised concerns about the future safe operation of the plant, which Bechtel and AECOM have strongly denied.
Brunson is a former DOE engineering division director for the project. In late 2012, he told then Energy Secretary Steven Chu that Bechtel should no longer be allowed to establish the design requirements of the plant it was building and called for a stop to work. He resigned not long after that.