Bechtel / AECOM / WTCC: Admitted Idle-Time Billing and the 2020 Monitoring Agreement

Bechtel, AECOM and WTCC agreed to pay $57.75 million in the Hanford idle-time billing settlement, which included admissions from Bechtel and AECOM and a 2020 monitoring agreement. Management knew craft workers lacked enough assigned work, and the companies admitted billing the Department of Energy for the resulting excessive idle time. If you assign work, keep time or review labor charges, this case reaches the decisions you see before the bill reaches the government.

The U.S. Attorney’s Office for the Eastern District of Washington announced the settlement on September 22, 2020. The companies agreeing to pay were Bechtel National Inc., Bechtel Corporation, AECOM Energy & Construction, Inc., and their subsidiary Waste Treatment Completion Company, LLC, known as WTCC.

The Waste Treatment Plant at Hanford, near Richland, Washington, was designed to treat radioactive waste stored at the site. Bechtel and AECOM employed hundreds of craft workers, including electricians, millwrights and pipefitters, to construct, operate and maintain it.

What Bechtel and AECOM Admitted About Idle Time

Bechtel and AECOM admitted overcharging the Department of Energy for unreasonable and unallowable craft-worker idle time between 2009 and 2019. In the statement of facts they accepted as part of the settlement, the companies admitted failing to schedule and carry out enough work to keep those employees sufficiently occupied and productive.

Management knew why the workers were idle: management had not assigned sufficient work. The idle periods could last several hours. The companies admitted improperly billing the Department of Energy for those labor costs and continuing for years after they knew they were under investigation for the billing practices.

That admission puts the work schedule at the center of the case. An electrician can be present at the plant while having too little assigned work to fill the shift. Here, the companies admitted both sides of the problem: failing to provide enough work and charging the government for unreasonable idle time that followed.

The Department of Energy’s Inspector General said the billing continued even after U.S. authorities notified the contractors that the costs were unallowable. We see the absurdity: management failed to assign enough work, and taxpayers funding the cleanup got the bill. Even a direct warning did not stop it.

How Idle Time Became a Government Charge

The labor-billing chain connects a workplace decision to a federal payment: time is recorded, management accepts it, the contractor submits the cost for reimbursement, and the government pays. In this case, the companies admitted that unreasonable idle time traveled through that chain as a labor charge to the Department of Energy.

The records behind a labor charge describe different parts of the transaction. Daily supervisor reports describe the work, timecards record hours, and payroll certifications and billing categories connect labor to the amount claimed. Reading those records together lets us examine whether the government’s bill reflects the work available and performed.

For a labor-billing inquiry, the payment record tells us where money went. The underlying work and time records explain the charge.

Someone assigning a crew may know why employees had no task to perform. A timekeeper may see how those hours were entered. Someone reviewing the bill may see how the cost was presented to the Department of Energy. Those views meet at the same labor charge. The Bechtel and AECOM admissions make the connection concrete: management knew the lack of assignments was producing idle time, and the companies billed for it anyway.

The 2020 Monitoring Agreement Reached Inside Management

The 2020 monitoring agreement required Bechtel and AECOM to pay for a full-time independent monitor and an assistant monitor for three years. The agreement gave the U.S. Attorney’s Office the choice of monitors and required them to report directly to the United States.

Their access extended to the companies’ systems, meetings, personnel and other information concerning labor charging. That reach matters in a case where the work-assignment decision and the bill sit in different parts of the business. Access to the final invoice alone would leave the monitor dependent on the account that produced it. Access to people, meetings and systems opens the decisions behind the charge to examination.

The agreement also carried possible additional damages of up to $10 million if the companies violated its terms, supplied false information or failed to immediately correct identified Department of Energy contract issues. The settlement also required Bechtel and AECOM to cooperate fully with the government’s investigation and enforcement efforts involving officers and managers who facilitated or participated in false labor billing.

A broader accounting study helps explain why independent scrutiny matters. In Unique Characteristics of Management Override Fraud Cases, published in the Journal of Forensic and Investigative Accounting in 2019, researchers compared fraud cases involving management override with cases involving a lack of controls. They found that even organizations with internal audits, independent financial-statement audits, anti-fraud policies and codes of conduct could fall prey to managers overriding controls. The study points to the power of the people running a control system to defeat it.

At Hanford, those terms gave outside reviewers access to the labor-charging process and required them to report directly to the government. We see the value in that access: a monitor could examine management’s explanation against the people and records behind the bill.

The Earlier Hanford Settlement Covered Different Conduct

The earlier Hanford settlement resolved nuclear-quality and lobbying allegations. In November 2016, Bechtel and AECOM agreed to pay $125 million over allegations that they violated quality standards, used substandard materials and improperly charged for lobbying at the Waste Treatment Plant.

The government’s announcement of that separate settlement concerned allegedly deficient nuclear-quality materials, testing and services. It also covered allegations that Bechtel improperly charged for lobbying. The later Justice Department account says the alleged lobbying included efforts to cut the Department of Energy’s budget for independent oversight of the project.

An insider dealing with testing and quality certifications would recognize a different set of records from someone dealing with craft assignments and labor charges. The later idle-time settlement concerned admitted overbilling for hours management had left without enough work.

Four Plant Employees Brought the Case

Four Waste Treatment Plant employees came forward with allegations of labor mischarging and brought a False Claims Act qui tam case. The United States joined the case before reaching the settlement. The U.S. Attorney’s Office and the Department of Energy Office of Inspector General’s Western Field Office jointly conducted the investigation.

The Justice Department account describes Department of Energy Inspector General agents reviewing documents, interviewing witnesses and examining video and audio recordings. That combination makes sense for a case about work that was available, time that was charged and management’s knowledge. The billing records explain the demand for money. People familiar with the work can explain what happened during those hours.

How Much Money Can a Whistleblower Get From a Qui Tam Lawsuit?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In this case, the settlement provided a collective $13.75 million whistleblower reward for the four employees.

The agreement also designated $25,789,039 of the settlement for return to the Department of Energy, making that money available for continuing work at Hanford. Those were dollars earmarked for the project the labor bills had charged.

What Proof Do You Need as a Whistleblower?

For this kind of labor-billing case, we look for evidence connecting the work available, the hours charged and management’s knowledge. The useful account brings together what the people assigning work knew and what the people billing the government submitted.

That is why your understanding of the work can matter as much as your familiarity with a billing system. You may know how a shift was assigned, why a crew remained idle or how managers responded when the charges came into question. The company’s records may show another part of that same decision. We know what a labor-mischarging case needs, and we build it with you around what you saw.

You Know How the Hours Reached the Bill

If you saw crews left without assignments while their idle hours went onto a government bill, speak to our whistleblower experts about how those hours were billed. We work beside you to build your strongest federal contractor whistleblower case and bring in federal procurement whistleblower lawyers who understand contractor labor charging. From your first account of the shift to the pursuit of a recovery, we stay with you.