US sues Lockheed, other contractors over Hanford DOE site cleanup contract misconduct

by Ben Vernia | February 18th, 2019

On February 8, the Department of Justice announced that it was filing a civil False Claims Act suit against several contractors at the Department of Energy’s former Hanford nuclear production site in Washington state. According to DOJ’s press release:

The United States has filed suit against Mission Support Alliance LLC (MSA), Lockheed Martin Corporation (LMC), Lockheed Martin Services Inc. (LMSI), and Jorge Francisco Armijo for alleged false claims and kickbacks in connection with a multi-billion dollar contract with the Department of Energy (DOE) to support the environmental cleanup at the Hanford Site near Richland, Washington, the Justice Department announced today.  MSA is a Delaware Limited Liability Corporation that, during the time alleged in the lawsuit, was owned by Lockheed Martin Integrated Technology LLC, Jacobs Engineering Group Inc., and Centerra Group (formerly G4S Government Solutions, and, prior to that, Wackenhut Services Inc.).  Both Lockheed Martin Integrated Technology and LMSI were wholly-owned subsidiaries of LMC.  Mr. Armijo is a Vice President of LMC and also served as a President of MSA during the time period in question.

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The multi-billion dollar MSA Contract with DOE required MSA to provide a number of site-wide services to DOE and to other contractors involved in the clean-up of the Hanford Site.  The allegations in the complaint relate to the management and technology solution services that MSA agreed to provide at Hanford.  In January 2010, without competition, MSA awarded its affiliate, LMSI, a $232 million subcontract to perform that work from Jan. 1, 2010 through June 2016.

The United States’ complaint alleges that the defendants knowingly made or caused false statements to the DOE regarding the amount of profit included in the billing rates for LMSI under the subcontract it was awarded by its affiliate, MSA.  The complaint also alleges that the defendants’ claims for these inflated rates violated the False Claims Act.

In addition, the complaint alleges that LMC made payments of more than $1 million to Armijo and other MSA executives in order to obtain improper favorable treatment from MSA with respect to the award of the LMSI subcontract at the inflated rates.  The complaint further alleges that these payments violated the Anti-Kickback Act.

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The case apparently arose from a governmental investigation, rather than from a whistleblower’s lawsuit.

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