The primary contractor for the Savannah River Site near Aiken, South Carolina has agreed to pay the federal government a hefty amount to settle an investigation of the contractor’s alleged violation of the False Claims Act. The Department of Energy had been investigating allegations that Washington Savannah River Company, while in the midst of contract negotiations with the Department over the contractor’s employee pensions, withheld from the government information concerning substantial projected increases in the pension fund that would be required in the future. The contractor initially asked for and was given an “equitable adjustment” of $1.2 million for overages that the Department of Energy believed to be unexpected increases in pension fund costs. But when Washington Savannah River Company requested from the government an additional $35.6 million in pension cost adjustments, the Department of Energy began looking into the matter. According to the government, the contractor knew about the pension cost increases, but failed to disclose the matter before entering into a contract with the Department of Energy. The federal government charges that this was a violation of the False Claims Act.
Washington Savannah River Company has been replaced as the prime contractor for the Savannah River Site by a five-company team led by Fluor Corp. The new contract runs for five years and is valued at $800 million a year.
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