The Hanford tank farm contractor has agreed to pay nearly $5.3 million to settle allegations of timecard fraud at the nuclear reservation.
The Department of Justice announced the settlement Thursday, nearly four years after the previous Hanford tank farm contractor agreed to pay $18.5 million after admitting to timecard fraud.
Contractor Washington River Protection Solutions, or WRPS, which took over the contract from CH2M Hill Hanford Group., “continued to bury its head in the sand and allegedly allowed much of the same timecard fraudulent practices to continue,” said Michael Ormsby, U.S. attorney for the Eastern District of Washington.
WRPS is accused of submitting claims to the federal government for employee overtime work that had not been provided as claimed, plus other irregularities, from October 2008 to July 2013. Tank farm workers are paid with taxpayer money.
Although WRPS was explicitly advised by federal law enforcement officers of systemic timecard fraud when it was awarded the tank farm contract in October 2008, it failed to change faulty procedures and curtail the timecard fraud until July 2013, the Department of Justice alleged.
The contractor admitted no guilt in agreeing to a settlement.
“WRPS strongly disagrees with the conclusions of the Department of Justice and has denied any wrongdoing relating to its timekeeping or internal audit practices,” the company said in a statement.
It reached the settlement agreement to avoid the cost and distraction of litigation relating to events that occurred several years ago, WRPS said.
The Department of Justice accused the contractor of committing fraud in three different ways.
It used the same loose overtime accounting procedures that the previous contractor allegedly used, the government alleged. WRPS workers, with management’s acceptance, did not fully account for claimed overtime work.
CH2M Hill was accused of offering tank farm workers overtime work in eight-hour shifts. Tank farm workers were allowed to go home when work was completed, but claim the full eight hours pay at time and a half or double pay.
WRPS’s lack of accountability for the same work force was “at a minimum, reckless and irresponsible conduct by WRPS’s managers and executives,” the Department of Justice said in a statement.
WRPS also allowed its workers to incorrectly claim “emergency call-in” overtime, which paid extra, the government alleged.
Emergency call-in overtime is for true emergencies when workers are given less than 16 hours notice of the overtime shift, according to the Department of Justice.
Instead, WRPS nearly always allowed its workers to claim emergency overtime pay, which resulted in hundreds of thousands of dollars of inflated labor rates charged to the federal government, the government said.
The third alleged scheme involved WRPS installing its own general counsel as the head of internal auditing required under its contract.
“WRPS’s arrangement was problematic for a number of alleged reasons, including that WRPS’s general counsel allegedly had no auditing experience and … consistently worked to avoid providing any meaningful oversight of the alleged ongoing fraud scheme,” the Department of Justice said.
DOE eventually required WRPS to hire a new audit manager who could exercise independent judgment.
Ormsby said he commended the career internal auditors at the tank farms who “continue their good work under challenging and sometimes difficult circumstances.
“This settlement shows that prime contractors should be wary of cutting corners on any contractually required internal auditing obligations,” Ormsby said. “Robust and fully functioning internal audit processes are the first line of defense against fraud on prime contracts issued to private contractors at Hanford.”
Since July 2013, WRPS has instituted a new timecard system, negotiated changes in a collective bargaining agreement and worked to ensure more meaningful and vigorous internal auditing processes, the Department of Justice said.