Bechtel and URS: Idle Time on the Government’s Bill

The Bechtel and URS False Claims Act settlement required $125 million to resolve allegations of deficient nuclear-quality work and prohibited lobbying costs at Hanford. By the time of the later labor settlement, the government reported paying billions of dollars for the plant’s design and construction. That later case brought admissions from Bechtel and AECOM Energy & Construction, formerly URS Energy & Construction, about billing the Department of Energy for unreasonable idle time. The contractors admitted that some idle-time charges continued after the government raised its concerns.

Hanford Quality and Lobbying Allegations

Bechtel and URS resolved the quality and lobbying allegations in a settlement announced November 23, 2016. The government alleged deficient nuclear-quality materials, services and testing at the Hanford Waste Treatment Plant, together with prohibited lobbying costs. Plant workers brought the whistleblower case, and the government joined part of it.

The plant, near Richland, Washington, was designed to treat radioactive waste stored at the Hanford Site. Quality requirements therefore went to the work the government was buying: the materials supplied and the services and testing behind the plant’s construction.

In its later account of the earlier settlement, the U.S. Attorney’s Office said the contractors had allegedly used federal money to lobby Congress, including efforts to cut the Department of Energy’s budget for independent oversight of the project.

We see a particularly ugly bargain in that allegation: taxpayers funding an effort to reduce scrutiny of how their money was spent.

For someone who knows the testing and materials, the gap between the work promised and the work supplied is where the quality allegation becomes concrete.

How Hanford Labor Costs Reached the Government

The Hanford contract reimbursed Bechtel National for allowable, reasonable costs attributable to the project, including labor. The 2020 settlement’s admitted statement of facts describes a cost-plus-award-fee contract: reimbursement for the work, with separate fees available for performance milestones.

Bechtel National was the prime contractor. AECOM Energy & Construction was its primary subcontractor, and the companies created Waste Treatment Completion Company to complete construction and lead startup and commissioning. Bechtel retained overall project oversight. Managers and supervisors from Bechtel and AECOM continued directing work through personnel loaned to the completion company.

That arrangement matters because the people scheduling the work, recording the hours and claiming reimbursement were connected across companies. Craft workers received hourly pay based on the contractors’ timekeeping systems. The contractors then claimed their labor costs from the Department of Energy.

The agreement also explains what a reimbursed labor hour brought with it. Bechtel and AECOM received overhead and indirect costs calculated as a percentage of reimbursed labor hours. Their fees and profits came through the contract’s separate fee arrangements. The payment structure put the labor hour at the center of the reimbursement claim.

The Labor Settlement Came With Admissions

On September 22, 2020, Bechtel, AECOM Energy & Construction and Waste Treatment Completion Company agreed to a $57,750,000 civil settlement over labor charging at the plant, with $25,789,039 designated for return to the Department of Energy’s Hanford work. The contractors admitted that they claimed reimbursement for downtime costs that were unallowable, including some incurred after the government raised its concerns.

The admitted account explains how work could stall before a craft worker started a task. Maintenance managers sometimes failed to schedule enough work. Startup testing suffered when engineers failed to prepare or schedule tests adequately, or were absent from field testing. Some work packages reached the field before required parts arrived.

Construction, Startup and Maintenance had different jobs. Construction installed components and systems. Startup tested completed equipment. Maintenance kept equipment in working condition while other construction continued. Each depended on work packages or test procedures that managers, planners and engineers prepared and assigned.

An hourly payroll could keep moving while that preparation fell behind. The contractors admitted that failures to plan and carry out sufficient work produced unreasonable downtime across those work groups. Personnel above the craft level knew that workers sometimes lacked enough ready work to fill the day. The downtime could last several hours.

The settlement also covered broader government allegations about staffing, unnecessary overtime, reworking completed tasks and underreporting progress. The admitted facts give the labor case its particular weight: management knew about insufficient work, and unallowable downtime reached the government’s bill.

The admitted statement also describes an alternative to keeping workers idle. Under the Hanford Site Stabilization Agreement, the contractors could send craft workers home when work ran out and there was no reasonably foreseeable need to keep them on standby beyond the agreement’s minimum. Workers sent home were owed at least two hours of pay unless they had been told in advance not to report that day.

The Cost Code Could Hide the Wait

Before 2018, craft personnel lacked a way to record downtime separately, such as a dedicated cost code. The contractors admitted that supervisors and managers generally instructed workers to charge that time to their most recent task or to the balance-of-facilities maintenance code.

For Construction and Startup, forepersons entered weekly hours in eTrack using codes for the project area and general type of work. Superintendents typically directed which codes to use. Maintenance followed the same process when Bechtel National or Waste Treatment Completion Company directly employed its craft workers. What work did those recorded hours represent?

The agreement says those accounting codes corresponded to parts of the project budget funded through Congress and the Department of Energy. A task code therefore carried information beyond the payroll desk. An insider who understood the work package and the instruction behind the code could explain something a total of labor hours would miss.

The contractors also admitted scheduling Friday and weekend overtime after craft personnel had experienced downtime during the regular workweek. Overtime carried premium pay rates. Idle time during the week. More expensive hours on the weekend.

A Similar Labor-Hour Allegation at United Airlines

A whistleblower complaint against United Airlines describes another way labor records can depart from work performed. The complaint quotes a manager discussing the hours assigned to a part:

The quoted allegation illustrates a familiar comparison for someone inside a contractor: the task, the time it took and the hours entered against it. At Hanford, the admitted account adds the management instructions that directed downtime into existing cost codes.

Billing Continued After the Government Raised It

The contractors admitted that some unallowable downtime charges continued after federal investigators raised the issue. Their response is part of the evidence of what management knew when later costs reached the government.

In 2018, investigators showed the contractors examples of idle craft personnel and emails about how workers should record downtime. The contractors said they would take immediate corrective action in Maintenance. The government also raised concerns about other work groups.

The project introduced daily timekeeping logs for Maintenance and later extended them to all craft personnel. Yet the admitted statement describes continued unreasonable downtime in Startup. A consultant’s observations, craft stewards’ reports and daily logs still identified productivity problems in early 2019. Investigators later showed the contractors examples of workers discussing difficulties recording downtime accurately.

The evidence connected field work to billing through work packages, test procedures, scheduling decisions, time entries, cost-code instructions and invoices. The U.S. Attorney’s Office for the Eastern District of Washington and the Department of Energy Office of Inspector General’s Western Field Office jointly investigated. The U.S. Attorney’s Office said the inspector general’s agents examined documents, interviewed witnesses and reviewed video and audio recordings.

A log can record the problem. The charge still has to change.

The Workers Behind the Case and the Settlement Terms

Four employees at the Hanford project brought the labor-mischarging case. The government joined part of their case before the settlement.

The Congressional Research Service’s 2009 report, Qui Tam: The False Claims Act and Related Federal Statutes, traces the strengthened whistleblower provisions to concerns about fraud against the government. It records Congress’s recognition that an employee may be the only person able to bring information forward. The Hanford agreement makes that insight practical: knowing how a work package, a supervisor’s instruction and a cost code fit together can explain a bill that looks ordinary from outside the project.

The labor settlement provided $13.75 million collectively for the whistleblowers.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The civil resolution also required the contractors to fund a three-year independent monitor arrangement, with access to labor-charging systems, meetings and personnel and reports directly to the government. Violations of the monitoring terms, false information or failure to correct identified contract issues could trigger up to $10 million in additional damages.

These settlement terms reached the systems behind the charges. For a worker who knew the scheduling and timekeeping practices, the value of that knowledge lay in explaining how the government’s money moved through them.

You Know What Happened Behind the Hours

If you know how unperformed work became a labor charge, or how quality problems disappeared from the account given to the government, speak to one of our Whistleblower Experts about what the government was billed for. We build the case around your knowledge of the work and bring in government contract fraud whistleblower lawyers who understand cost reimbursement, technical requirements and management decisions. We stay beside you as that inside knowledge becomes a case strategy and through the decisions that follow.