Fernald inquiry expands

Cleanup manager let unapproved work go on


BY MIKE GALLAGHER
The Cincinnati Enquirer

Subsidiaries of the company managing Fernald violated U.S. Department of Energy rules by performing work at the site without government approval, according to internal company records obtained by The Enquirer.

And Energy Department officials have turned documents about the violations over to federal investigators, said Gary Stegner, the department's Fernald spokesman.

The matter now becomes part of a General Accounting Office (GAO) investigation into allegations of mismanagement and lack of oversight in the cleanup of the former uranium processing plant, 18 miles northwest of Cincinnati.

Performing any work at the 1,050-acre plant without full Energy Department approval could result in the management contract of Fluor Daniel Fernald being canceled, according to the government contract and department regulations.

Evidence of the improper work was contained in company records, including a May 20 e-mail message by Fluor Daniel Fernald Deputy President Charles Little, obtained by The Enquirer.

Mr. Little's e-mail did not specify the unauthorized work performed at Fernald, but conceded it was ''without client (Energy Department) approval.''

The Enquirer, however, has learned through company and Energy Department records, that three Fluor subsidiaries - Fluor Daniel Williams Brothers, Fluor Daniel Canada and Total Recruiting Services (TRS) - performed some unauthorized work at Fernald in areas such as project control administration, engineering and design work and employment services, respectively.

Fluor Daniel Fernald was forced to absorb more than $148,000 of $338,337 in costs connected to the subsidiaries' work because of the lack of authorization, according to a company source.

''This company had to eat that loss because they didn't want the Energy Department to learn they were doing unauthorized work at the site,'' said a Fluor Daniel Fernald senior manager who provided the e-mail documentation to The Enquirer. ''It was a major problem and, if discovered by DOE, could have and should have led to major financial penalties.''

Energy Department officials at Fernald were unaware of the unauthorized work and department records contained no information about the incidents, according to Mr. Stegner. ''We have turned the documents over to GAO to have them investigate this,'' he said.

Local members of Congress called for the GAO probe of Fernald last spring after a series of Enquirer articles detailed mismanagement, safety problems and lax oversight.

J. Phil Hamric, head of the Energy Department's Ohio Field Office and Jack Craig, the Energy Department's Fernald site manager, refused repeated Enquirer requests for interviews. Fluor Daniel Fernald President John Bradburne and Mr. Little also refused to be interviewed for this story.

A written statement prepared by Fluor Daniel Fernald stated: ''All Fluor Daniel subsidiaries performing work at (Fernald) have been approved by the appropriate DOE and Fluor Daniel Fernald contracting officers. All activities completed were consistent with the approved baseline, and the taxpayers were billed only for costs allowed by the applicable contract terms.''

Since Fluor Daniel Fernald received a five-year, $2.5 billion contract to manage Fernald in December 1992, the government precluded Fluor subsidiaries from performing work there to prevent a conflict of interest.

In his May 20 e-mail, Mr. Little talked about preventing recurring problems in which subsidiaries ''thought they could do anything they wanted here without (DOE) approval and we (FERMCO) have ended up eating the non-billable costs associated with 'their' learning curve.)''

Published Nov. 21, 1996.