Government Contracts Monitor

Don’t Invoice the Government for What You Haven’t Done

November 29, 2016

Last week, the Department of Justice (DOJ) announced that it had reached a settlement with Bechtel National Inc., Bechtel Corp., URS Corp. (predecessor in interest to AECOM Global II LLC) and URS Energy and Construction Inc. (now known as AECOM Energy and Construction Inc.). In the press release, DOJ announced that the contractors have agreed to pay $125 million to resolve allegations under the False Claims Act that they made false statements and claims to the Department of Energy (DOE) by “charging DOE for deficient nuclear quality materials, services, and testing” provided at Hanford, a Nuclear Waste Treatment Plant, in Washington. The claim also alleged that Bechtel used federal contract dollars to inappropriately lobby Congress and other federal officials for continued funding at the site, in violation of procurement regulations and the Byrd amendment.

According to the DOJ statement, the contract at Hanford began in 2002; since then, the DOE has paid “billions of dollars” to the defendant contractors to design and build the plant, where dangerous radioactive waste is stored. The contract required the provision of materials, testing and services that met appropriate nuclear quality standards. The United States alleged that the contractors failed to meet these standards but nonetheless improperly charged the DOE the costs of complying with them. The subject claims were originally brought qui tam, under the whistleblower provisions of the False Claims Act, by three former employees at the Hanford site. The Act allows private parties to sue a business entity on behalf of the US government when they believe the entity has submitted false claims; it further allows whistleblowers to receive a portion of what the government recovers.

This matter serves as another reminder of the vital importance of government contractors strictly adhering to contract requirements and not invoicing for noncompliant work. Be careful out there.