Lobbying Costs Charged to Government Contracts: Taxpayers Paid to Be Asked for More

Government contractor lobbying costs can lead to false claims when a contractor knowingly charges federal funds for prohibited lobbying. At Hanford, the Justice Department alleged that contractors used Department of Energy money to lobby for more funding for their federal projects. If you know what an employee or consultant actually did and which account paid for it, you may recognize the gap between the work performed and the cost presented to the government.

This is a form of government contractor cost mischarging: the purpose of an expense matters alongside its amount. The lobbying cases here concern federal contract money allegedly spent influencing Congress and other officials to fund the work.

How a Lobbying Cost Reaches a Government Invoice

Under the federal acquisition rules’ allowable-cost payment clause, contractors submit vouchers supported by claimed allowable costs and interim billing rates. Those rates later reconcile to settled final indirect rates.

An indirect rate carries costs into the amount billed. Where a concern involves an indirect charge, we connect the underlying expense to the rate proposal and the vouchers that used the rate.

For an expense charged as employee time, we compare the time entry with the work assignment. Someone who knows what occupied those hours can explain what the billing description leaves out.

Fluor Hanford and the HAMMER Training Contract

Lobbying expenses charged to a DOE contract were the prohibited cost alleged in Fluor Hanford’s HAMMER case. The contract paid for emergency-response training.

Fluor performed management and engineering services at Hanford in eastern Washington. Between 2005 and 2009, it contracted with the Department of Energy to manage and operate the Hazardous Materials Management and Emergency Response Center, known as HAMMER. The center provided homeland security and emergency-response training to first responders and law enforcement personnel.

In its April 2013 settlement announcement, the Justice Department alleged that Fluor used Department of Energy funds to lobby Congress and other federal officials to increase HAMMER funding. The department identified the Byrd Amendment’s restriction on using federal funds for lobbying as the basis for that allegation. Fluor agreed to pay $1.1 million to resolve the False Claims Act allegations.

The alleged spending had a circular purpose: money for the training program paid the effort to obtain more money for the training program. We see the absurdity in asking taxpayers to fund the pitch for their next bill.

A former Fluor employee brought the whistleblower case, and the United States joined it. The Department of Energy Office of Inspector General provided investigative assistance.

Bechtel’s Lobbying Campaign Inside the Waste Treatment Project

The Bechtel case paired alleged lobbying costs with alleged failures to provide the nuclear-quality work the government bought. Both belonged to the Hanford Waste Treatment Plant project, which was intended to treat dangerous radioactive waste stored at the site.

The Justice Department’s November 2016 announcement reported a $125 million settlement with Bechtel and URS covering the quality and lobbying allegations together. The department said the government had already paid the contractors billions of dollars to design and build the plant.

The government alleged that Bechtel National and Bechtel Corporation used federal contract funds for a comprehensive lobbying campaign over multiple years, aimed at Congress and other federal officials to secure continued funding for the plant.

The department alleged that Bechtel claimed and received government money for those activities in violation of the Byrd Amendment and contractual and regulatory requirements. The company building the plant allegedly charged the government for lobbying to keep funding it.

The quality allegations reached Bechtel and URS. The contract required materials, testing and services to meet nuclear-quality standards. The government alleged that the contractors charged for meeting those nuclear-quality standards while supplying deficient piping and waste vessels, using vendors that failed quality-control requirements, and buying testing from vendors without compliant quality programs.

Project employees brought the whistleblower case, and the government joined part of it.

In a separate settlement announced in September 2020, Bechtel and AECOM admitted overcharging for idle time when craft workers lacked enough assigned work.

What Is a False Certification?

A false certification misrepresents a fact or compliance promise tied to the government’s payment. In cost billing, a certificate can make a representation about the expenses included in the contractor’s proposed rates.

The federal acquisition rules’ final indirect-cost certification clause addresses allowable and expressly unallowable costs. The certificate attaches to the final rate proposal. It requires a signer at least as senior as a vice president or chief financial officer of the business segment submitting the proposal.

For an insider concerned about a lobbying expense, that creates a specific comparison: the activity behind the cost against the representation made about it. The person who knows the activity and the person who sees the certified proposal may hold different pieces of the same story. We examine those pieces together, including who understood the expense’s purpose when it went into the claim.

What Evidence Is Needed to Prove Fraud?

The useful billing evidence connects the contract’s cost restriction, the work actually performed, the account charged and the request for government payment. For lobbying, the purpose of the work belongs beside the accounting entry.

If your concern involves a consultant’s invoice, we examine the services behind its description and how the expense reached the government. If it involves employee time, we compare the activity with the time charged. If the expense entered an indirect rate, the rate proposal and certification connect that cost to the billing.

A Scripps Research Institute whistleblower alleged that existing research grants paid for time spent preparing new applications and doing other work. The complaint shows how account codes could obscure what the hours bought:

Scripps agreed to a $10 million settlement in 2020 over allegations of mischarging NIH-sponsored research grants. The parallel is the gap between the work an insider knows and the account number on the form.

What a Contractor Insider Can Bring to a Whistleblower Case

The Fluor and Bechtel lobbying cases both began with employees who brought whistleblower suits. Knowledge of the work behind a charge can reach beyond what the invoice tells the government.

A whistleblower case under the False Claims Act can pay a reward of 15% to 30% of what the government recovers. We work with you on the connection between the expense and the claim, whether your view comes from the project, the cost accounts or the certification. Your understanding of what the charge actually bought is where that conversation begins.

You Know What the Charge Bought

If you know federal contract money paid for a lobbying effort, speak to one of our Whistleblower Experts about what that charge bought. We work beside you to build your strongest government contracting whistleblower case and bring in government contracting fraud whistleblower lawyers who understand cost reimbursement and lobbying restrictions. From the first conversation through the case, we stay on your side of the table.