Contractor settles with feds in case of defective rebar, lax QC

Source: U.S. Department of Justice (DOJ); CP staff

DOJ recently announced an agreement whereby Energy & Process Corp. (E&P) will pay $4.6 million to resolve a lawsuit alleging the Tucker, Ga., contractor knowingly failed to perform required quality assurance procedures and supplied defective steel reinforcing bars in connection with a Department of Energy (DOE) nuclear waste treatment facility contract.

“Compliance with contract requirements is expected by all who contract with the U.S. government, but is especially critical in connection with the construction of a nuclear facility,” said Justice Civil Division Acting Assistant Attorney General Chad Readler.

The lawsuit alleged that E&P, while paid a premium to supply rebar that met stringent regulatory standards for the Mixed Oxide Fuel Fabrication and Reactor Irradiation Services facility in the agency’s Savannah River site near Aiken, S.C., failed to perform most quality assurance measures and falsely certified they had been met. It further alleged that one-third of the rebar E&P supplied was found to be defective. The $4.6 million payment resolving the government’s False Claims Act lawsuit is in addition to rebar replacement costs the contractor incurred.

“Our complaint alleges that after actively touting its experience with nuclear construction and quality assurance, and then being hired to perform such work in connection with an important project, E&P chose to forego the agreed to quality assurance work, and then compounded this failure by falsely certifying to the government that it had performed the quality assurance work,” said U.S. Attorney John Horn for the Northern District of Georgia. “This settlement recovers substantial losses caused by E&P’s decision to cavalierly place its own profits above its commitment to adhere to important nuclear safety and quality control requirements.”

Allegations resolved by the settlement arose in part from a whistleblower lawsuit filed under the False Claims Act by Deborah Cook, a former employee of the prime DOE contractor that subcontracted with E&P. Under the law, private citizens can sue for false claims on behalf of the government and share in any recovery. The act permits the government to intervene and file its own complaint in such lawsuits, as it did in this case. Cook’s share of the settlement has not been determined. The case was handled by Justice Civil Division’s Commercial Litigation Branch, U.S. Attorney’s Offices for the Northern District of Georgia and District of South Carolina, plus the DOE’s Office of Inspector General.