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JULY 19, 2023

GRANTED IN PART: June 28, 2023

CBCA 7056

WASHINGTON RIVER PROTECTION SOLUTIONS LLC,

Appellant,

DEPARTMENT OF ENERGY,

Respondent.

Scott Arnold, Luke W. Meier, Robyn N. Burrows, and Amanda C. DeLaPerriere of

Blank Rome LLP, Washington, DC; and Michael J. Montalbano of Blank Rome LLP,

Philadelphia, PA, counsel for Appellant.

Andrew J. Unsicker and Paul R. Davis, Office of Chief Counsel, Department of

Energy, Richland, WA, counsel for Respondent.

Before Board Judges KULLBERG, ZISCHKAU, and SULLIVAN.

SULLIVAN, Board Judge.

Washington River Protection Solutions LLC (WRPS) appealed the decision of the

Department of Energy (DOE) contracting officer that asserted a demand for repayment of

purported unreasonable staff augmentation expenses incurred between 2009 and 2018.

We find most of the challenged costs reasonable and grant the appeal in part.

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Findings of Fact

In May 2008, DOE Office of River Protection awarded to WRPS the Tank Operations

Contract (TOC). Exhibit 1 at 1.1 Located at DOE’s Hanford Site, there are 177 tanks

containing approximately fifty-three million gallons of radioactive and chemical hazardous

waste. Id. at 27. Pursuant to the TOC, WRPS was to conduct “operations and construction

activities necessary to store, retrieve and treat Hanford tank waste, store and dispose of

treated waste, and begin to close the Tank Farm waste management areas to protect the

Columbia River.” Id. at 28. This cleanup of the Hanford Site was part of what DOE

described as “the world’s largest environmental cleanup project.” Id. at 27. The contract

was a cost-plus-award-fee contract, and the expected contract price was more than $7 billion

over ten years of performance, which included a base period of five years and a total of five

additional option years. Id. at 5, 10. WRPS was obligated to “provide the personnel,

equipment, materials, supplies, and services, and do all things necessary for, or incident to,

providing its best efforts to perform all requirements of” the contract. Id. at 5.

The focus of this dispute is WRPS’s use of contracted labor resources (CLRs) in its

performance of the contract. CLRs are individuals hired through staff augmentation

subcontractors to perform a specific scope of work or to fill in for missing personnel on a

temporary basis under the direct supervision of a WRPS employee. Transcript, Vol. 1 at 30.

WRPS competes different labor categories among staff augmentation contractors and enters

into blanket master agreements (BMAs) that contain labor categories and rates.2 Id. at 79-80.

Once BMAs are established, CLRs can be hired quickly, and WRPS does not incur the

training or separation costs that it would for a full-time employee, costs estimated to be

between $28,000 and $38,000. Id. at 78, 80, 188. CLRs also allow WRPS to accomplish

tasks when budget funds are available and to downsize quickly without additional cost when

budget funds are not available. Id. at 186. It also allowed WRPS to obtain the services of

contractors who would not take a full-time position. Exhibit 37 at 20; see also Transcript,

Vol. 1 at 189-90. WRPS hired 1224 CLRs in the first ten years of the contract, as compared

to the average 4300 full-time WRPS employees. Exhibit 37 at 19; Transcript, Vol. 1 at 183.

Very few of these CLRs worked full-time during any given year, and few worked more than

five years as a CLR. Exhibit 37 at 16. WRPS spent nine percent of its staffing dollars

paying for CLRs. Transcript, Vol. 1 at 183-84. WRPS planned on an annual basis its use

of full-time WRPS employees versus CLRs—plans that were shared with DOE. Id. at 186.

All exhibits are found in the appeal file, unless otherwise noted.

WRPS also used blanket ordering agreements (BOAs), in which individual

CLR positions were competed. Transcript, Vol 1 at 256-57.

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Chronology of Dispute

In February 2020, DOE issued a notice of intent to disallow costs “related to

subcontractor backlog audits” through fiscal year 2018. Exhibit 32. DOE intended to

disallow $6 million for “contracted labor time recording (CLTR)” resources. Id. at 2. DOE

was “particularly concerned about the contractual compliance issues and cost impact due to

WRPS’s use of preferred candidates to acquire staff augmentation resources” because

“WRPS did not perform thorough technical reviews on preferred candidates or incumbents

and it has been found that some of these candidates were paid at inappropriately high rates.”

Id. at 4. The amount to be disallowed for these issues was based upon an audit report

prepared by the DOE Richland Finance organization (DOE Finance). Id.

In the audit, DOE Finance examined the compensation records for forty-one

individuals hired as CLRs by WRPS that it had “judgmentally selected,” seeking CLRs that

had worked for WRPS for three or more years consecutively. Exhibit 32 at 17; Transcript,

Vol. 3 at 37-38. DOE Finance identified numerous concerns with the employment and

compensation for thirteen of these individuals, including concerns that WRPS did not have

effective controls to ensure that CLRs met minimum qualifications and that several CLRs

were paid rates higher than the rates agreed to on the subcontract through which they were

hired. Exhibit 32 at 32-33. DOE Finance was also concerned that none of the forty-one

CLRs had been subject to a “make versus buy” analysis to determine whether it was less

expensive to hire a new WRPS employee rather than filling the requirement with a CLR. Id.

DOE Finance did not provide a dollar figure that matched the $6 million amount in the notice

of disallowance; instead, DOE Finance recommended a settlement range between $5.75

million and $8 million. Id. at 8.

In August 2020, WRPS provided a response to both the audit report and an

explanation of the reasonableness of the dollars expended for the thirteen individuals that

were the focus of the DOE audit. Exhibit 37.

On December 10, 2020, DOE issued a contracting officer’s decision in which DOE

disallowed $6,025,069 because the costs were unreasonable. Exhibit 45.3 DOE calculated

this amount by identifying specific costs to be disallowed for thirteen individuals for four

different reasons. Id. For five individuals, DOE identified a “high” and “low” amount that

were disallowed and averaged the figures. Id. at 8. The sum of the amounts calculated for

DOE demanded payment within thirty days from the date of the December 10

letter. The contract incorporated by reference the Interest clause, 48 CFR 52.232-17 (2020)

(Federal Acquisition Regulation (FAR) 52.232-17). Exhibits 1 at 158, 46 at 196.

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the thirteen individuals was $3,012,534. Id. DOE multiplied this figure by two to derive the

final amount disallowed. DOE applied this so-called “2x” factor because DOE, in its review,

found other instances of the same issues identified for the thirteen individuals, and the factor

would account for what DOE believed was “excessive pass-through” of subcontracting costs

related to CLRs. Id. at 7.

Costs That DOE Sought to Disallow

DOE brought challenges to specific costs that can be grouped into four categories:

The hourly rates paid to seven individuals exceeded the hourly rates that they

would have received purportedly as WRPS full-time equivalents (FTE).

The hourly rates paid to three individuals exceeded the rates set forth in the

BMAs competed among the staff augmentation subcontractors.

Seven individuals purportedly did not meet the qualification requirements set

forth in the BMA for their positions.

The hourly rate paid to two individuals was increased “overnight” with

purportedly no reason for the increase.

The Board’s specific findings regarding the reasonableness of the dollars paid to each of

these individuals are detailed in appendix A to this opinion. The Board sets forth below its

findings regarding these categories of deductions and some pertinent findings regarding

individuals.4

CLR Rates Above WRPS FTE Rates

In 2019, the WRPS internal audit (WRPS-IA) organization performed an audit in

which the hourly rates of CLRs were compared to the hourly rates they would have been paid

as WRPS employees based upon their years of experience. The auditor did not compare the

rates of specific positions or job classifications; instead, the auditor used the seniority-based

WRPS pay bands. Transcript, Vol. 1 at 132. While the rates paid to CLRs were both greater

and less than the rates paid to WRPS employees for years of experience, the auditor found

that, on average, the rates paid to CLRs were approximately three percent higher than the

The Board expects that appendix A will require extensive redaction before this

decision is released to the public. Individuals are identified below by a “sample” number

assigned by DOE Finance. The sample numbers are matched with the individual’s name in

appendix A.

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rates paid to WRPS employees. Id. at 134. The auditor examined only rates paid in 2018.

Id. at 139.

Ten of the rates paid to CLRs exceeded the WRPS rates because the WRPS rates were

capped at twelve years of experience, and some CLRs had more than thirty years of

experience. Transcript, Vol. 1 at 132. The auditor compared these rates to comparable rates,

determined by years of experience and job title, in a database maintained by the General

Services Administration (GSA) and found the rates to be very similar and, therefore,

reasonable. Id. at 136-37; Exhibit 721.

For seven individuals, DOE Finance purportedly used WRPS-IA’s analysis to

calculate the “excess” that these six individuals were paid between 2009 and 2018 on their

contracts. However, the percentages that DOE-Finance used are not found on the WRPS-IA

auditor’s worksheet. Compare Exhibit 45 with Exhibit 721. The percentages used by DOE

Finance are lower in four instances and higher in two. Id. The seventh individual does not

appear on the WRPS-IA worksheet (sample 27). Id. In addition, DOE Finance used the

percentages across the eleven years of the contract, although WRPS-IA only examined the

rates in 2018. Id. Using these percentages purportedly derived by WRPS-IA, DOE Finance

totaled the costs paid to these individuals in the period 2009-2018 and then multiplied the

percentage “excess” to derive the difference between what the individual was paid and the

amount that supposedly would have been paid to a full-time WRPS employee.

DOE’s challenge to these costs appears to be rooted in the overarching concern that

WRPS was not conducting a “make versus buy” analysis for CLRs, meaning that it was not

looking at whether it was more cost effective to hire these individuals as full-time WRPS

employees or to contract with them as CLRs. The DOE auditor conceded that he could not

quantify that concern directly. Transcript, Vol. 3 at 249-50. This calculation of the “excess”

cost does not compare the number of hours worked by the individuals to the number of hours

that a full-time employee would work. None of these individuals worked more than 2000

hours per year consistently across the years. Exhibit 45 at 10-21.

WRPS put forth evidence to demonstrate how the rates paid to each of the seven

individuals was reasonable. Six of the seven individuals possessed specific technical skills

and experience with the tank farm operations that WRPS needed for performance of the

contract. For example, two of the seven were work planners, a skill that was in short supply

and necessary for the planning of all work conducted on the contract. See, e.g., Exhibit 627;

Transcript, Vol. 1 at 142. Five of the seven were paid at the BMA rates, which are rates that

are determined by competition (samples 5, 6, 13, 24, and 29).

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CBCA 7056

Rates That Exceeded BMA Caps

For three individuals, DOE seeks repayment of amounts paid at labor rates that

exceeded the contract rates in the negotiated BMAs on which the individuals were hired.

DOE Finance did not consider the roles these individuals were hired to fill when challenging

these rates.

All three individuals were preferred candidates, requested by name by the WRPS

personnel performing the contract work (“the field”) because the individuals possessed

needed experience or skills to accomplish the scope of work. Sample 4 was a subject matter

expert in computer applications needed for tank farm operations. Transcript, Vol. 1 at

177-78. Sample 27 was hired to assist WRPS because of his knowledge of the waste

treatment facility and its construction. Id., Vol. 2 at 32; Exhibit 707. Sample 30 had more

than thirty years of experience and specific Hanford experience sought by WRPS. Exhibits

123, 125.

WRPS established that the rates paid to these individuals were reasonable through

comparison to historical prices or comparison to list prices, such as the GSA rates. The rate

paid to sample 4 initially was compared to GSA rates for electrical engineers with both a

bachelors and masters degree in engineering and ten-to-fifteen years of experience. The

subsequent rates were deemed reasonable because they were in line with the rates paid on

previous contracts. The rates paid to sample 27 were determined to be reasonable because

they were in line with rates paid to the individual on prior contracts. The rate on the first

contract with sample 27 was determined through competition and found to be reasonable

through comparison to other similar positions at Hanford. The rates paid to sample 30 were

deemed reasonable based upon a comparison of his rate to two different GSA rates for

comparable engineers and another contract at WRPS. Exhibit 693. A WRPS executive

testified that WRPS could not have obtained the services of these individuals at the BMA

rates. Transcript, Vol. 1 at 246, Vol. 2 at 47.

Purportedly Unqualified CLRs

DOE deemed amounts paid to seven individuals to be unreasonable because the

individual did not meet the degree requirements set forth in the BMA statement of work on

which they were hired. DOE reasoned that, if the individual is not qualified for a position

with a corresponding rate, he or she is not worth that rate. See Transcript, Vol. 3 at 17.

Several of the individuals were “preferred candidates,” sought by WRPS managers

doing the work in the field because of their specific expertise or knowledge of the scope of

work. Transcript, Vol. 1 at 199-200. Four of these individuals were subject matter experts

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CBCA 7056

in their respective fields with numerous years of experience at Hanford or dealing with

DOE-specific procedures or issues (samples 4, 5, 12, and 23). Sample 4 wrote the DOE

guidance on safety system software reports, and sample 5 developed DOE nuclear waste

surveillance programs. Id. at 237-38, 253. Sample 12 was an expert in safety analysis, and

sample 23 had extensive experience in instrument and control engineering and was qualified

to work in the area where the tanks were located. Id. at 14, 284-85. Samples 6 and 18 were

work planners, a specialty that was in short supply and critical to the safe execution of the

contract work. Id. at 236. Both of these individuals had extensive experience, including

specific experience at Hanford. Id. at 326, 330; Exhibit 467. While the BMA statement of

work may have required a college degree, in most cases the specific position description

against which the individuals were hired either stated that no degree was required or provided

an equivalent number of years of experience to satisfy the degree requirement. See, e.g.,

Exhibit 519 (sample 12).

One individual challenged by DOE does not fit this mold. DOE challenged the

qualifications of sample 29, an individual who was hired to work as a computer-aided design

(CAD) drafter. The first contract required one year of experience and a technical school

certificate or degree. The second contract did not specify required years of experience but

required a certificate or degree. The third contract required certifications in AutoCAD and

3-D modeling packages and five to nine years of related experience. A WRPS executive

testified that WRPS determined that sample 29 did have a technical degree after his

qualifications were challenged by DOE, Transcript, Vol. 2 at 50, but it is not clear when that

degree was awarded or that he was qualified at the time he was given the three contracts.

Overnight Rate Increases

DOE deemed costs for two individuals unreasonable because the hourly rates for the

individuals increased from one contract to another without an explanation as to why the rates

increased.

WRPS explained the reasons for the rate increases. For sample 4, the rate increase

was $8.51 per hour in fiscal year 2018. Exhibit 45 at 9. The individual’s job responsibilities

increased in fiscal year 2018 and included management duties, thereby justifying the

increase. Exhibit 365; Transcript, Vol. 1 at 248-49. The rate for sample 21 increased by

$61.50 in fiscal year 2018, from $101.47 to $162.97 per hour, although the individual was

performing the same function and responsibilities. Exhibit 45 at 15. Sample 21 had been the

owner of her own company and was able to provide her services with very little overhead.

Transcript, Vol. 2 at 8; Exhibit 37 at 99. In fiscal year 2018, the individual disbanded her

company, and WRPS hired her through another staff augmentation subcontractor.

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CBCA 7056

Transcript, Vol. 2 at 8; Exhibit 685. Both individuals were paid at the BMA rates that were

established through competition during the periods challenged by DOE. Exhibits 363, 685.

DOE’s 2x Factor

The specific amounts that DOE challenged for the thirteen individuals totaled

$3 million. Because DOE had identified other individuals with qualifications or other issues,

DOE doubled the amount sought to capture them. DOE sought to be conservative in

applying this 2x factor. Exhibit 45 at 7. As the DOE auditor explained, it was not proper to

extrapolate because DOE had selected the original forty-one individuals to be audited based

upon tenure rather than sampling the entire pool. Transcript, Vol. 3 at 74, 248. DOE sought

to capture other issues, like excessive pass-through, which the DOE auditor acknowledged

had not been quantified. Id. at 247.

Discussion

DOE challenges WRPS’s staff augmentation costs as unreasonable. Regulation

assigns the burden to WRPS to prove the reasonableness of the costs. “If an initial review

of the facts results in a challenge to the specific cost by the contracting officer or the

contracting officer’s representative, the burden of proof shall be upon the contractor to

establish that such cost is reasonable.” FAR 31.201-3(a). “Cost reasonableness is a question

of fact.” Kellogg Brown & Root Services, Inc. v. United States, 742 F.3d 967, 970 (Fed. Cir.

2014). Costs must be reasonable to be allowable. FAR 31.201-2(a)(1).

Cost reasonableness is determined by considering “if, in its nature and amount, [a

cost] does not exceed that which would be incurred by a prudent person in the conduct of

competitive business.” FAR 31.201-3(a). Whether a cost “is reasonable depends upon a

variety of considerations and circumstances.” FAR 31.201-3 (b); see Kellogg Brown & Root

Services, Inc. v. United States, 728 F.3d 1348, 1360 (Fed. Cir. 2013), opinion corrected on

denial of reh’g, 563 F. App’x 769 (Fed. Cir. 2014) (“The standard for assessing

reasonableness is flexible, allowing [consideration of] . . . many fact-intensive and

context-specific factors.”). The regulation identifies four factors to be considered:

(1)

Whether it is the type of cost generally recognized as ordinary and

necessary for the conduct of the contractor’s business or the contract

performance;

(2)

Generally accepted sound business practices, arm’s-length bargaining,

and Federal and State laws and regulations;

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CBCA 7056

(3)

The contractor’s responsibilities to the Government, other customers,

the owners of the business, employees, and the public at large; and

(4)

Any significant deviations from the contractor’s established practices.

FAR 31.201-3(b).

When reviewing for reasonableness, the Board is not “limited to considering the audit

findings on which [the government] based its . . . claim . . . . A contractor may bolster its

case at the Board with ‘evidence to show that it acted reasonably’ in incurring costs, even if

such evidence is adduced only in or for the litigation.” Mission Support Alliance, LLC v.

Department of Energy, CBCA 6477, 22-1 BCA ¶ 38,181, at 185,432 (citing Fluor

Intercontinental Inc., ASBCA 62550, 22-1 BCA ¶ 38,105, at 185,101), clarified and motion

for reconsideration denied, 22-1 BCA ¶ 38,210. However, because it bears the burden of

proof for reasonableness, the contractor must provide something in the record about the

reasonableness of the challenged costs. Mission Support Alliance, LLC, 22-1 BCA at

185,432. Weak or circumstantial evidence that a contractor acted reasonably will not be

enough for the contractor to meet its burden of proof. Mission Support Alliance, LLC, 22-1

BCA at 185,561.

The parties agree that the standard in FAR 15.404-1, which prescribes the proposal

analysis techniques for contracting officers to evaluate the reasonableness of offered price

proposals in negotiated procurements, also provides guidance for assessing the

reasonableness of the challenged costs. Pursuant to FAR 15.404-1(b)(2), “[t]he Government

may use various price analysis techniques and procedures to ensure a fair and reasonable

price,” including: (i) price competition; (ii) historical prices; (iii) parametric estimating

methods; (iv) competitive published price lists; (v) independent Government cost estimates;

(vi) prices obtained through market research of same or similar items; and (vii) other data

other than certified cost or pricing data provided by the offeror. According to regulation, the

first two methods at FAR 15.404-1(b)(2) are the “preferred techniques. However, . . . the

contracting officer may use any of the remaining techniques appropriate to the circumstances

applicable to the acquisition.” FAR 15.404-1(b)(3). The designation of “preferred

techniques” has been interpreted to be “a suggestion, not a strict hierarchy.” DynCorp

International, LLC v. United States, 10 F.4th 1300, 1311 (Fed. Cir. 2021). “The yardstick

by which sufficiency is measured here is not some specific rule, formula, calculation, or

detailed fact-finding. Rather, it is the reasonable-discretion-informed appropriateness of the

technique under the circumstances.” Id. at 1312.

WRPS has established that the costs challenged by DOE were reasonable. WRPS

sought to fill specialized requirements with individuals with extensive experience in the

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CBCA 7056

difficult world of nuclear waste management. In the periods challenged by DOE, WRPS

paid ten of the thirteen individuals at the rates set in the BMAs, rates that are established

through competition, a proper method to determine reasonable prices.

See

FAR 15.404-1(b)(2)(i). For the three individuals that were paid above the BMA rate, those

costs were incurred to obtain experts in areas that WRPS needed to perform the contract, a

cost that would be incurred by a prudent person in the conduct of this challenging contract.

FAR 31.201-3(a). WRPS established that the higher rates that it incurred were reasonable

through comparison to historical pricing and competitive price lists (GSA rates), again

accepted methods to prove reasonableness. FAR 15.404-1(b)(2)(ii), (iv).

We find no merit in DOE’s challenge based upon what the individuals would have

been paid if hired as full-time WRPS employees. The problems with DOE’s analysis on this

point are myriad—the analysis fails to account for the hours these individuals worked, is

based upon an analysis of 2018 rates, but applied across all years of the contract, and fails

to account for the years of experience that many of these individuals possessed. To address

DOE’s larger concern about the need for a “make versus buy” analysis, WRPS has

established that these individuals were hired on an as-needed basis and that it would have

incurred additional costs if these individuals had been hired as full-time employees.

We find the overnight rate increases reasonable. For one, the rate increase was tied

to an increase in responsibility. For the other, although the functions were the same, the rate

paid was the BMA rate obtained through competition.

We find that all but one of the individuals was qualified for the position and rates at

which they were paid based upon the years of experience that they possessed. The exception

is sample 29. We agree that the costs identified by DOE based upon sample 29’s lack of

qualifications were unreasonable. While we found that sample 29 did earn a degree, the

record is silent as to when that degree was earned, so we do not know whether sample 29 was

qualified at the time of his first contract. Also, the third contract required five-to-nine years

of experience and a more specialized degree. WRPS has not shown that sample 29 met these

qualifications. Accordingly, WRPS has not shown that the costs incurred for sample 29 in

the amount of $80,275, are reasonable.

Although we find that WRPS has failed to establish the reasonableness for the costs

of sample 29 due to a lack of qualifications, we decline to apply DOE’s “2x factor” to this

amount. While we appreciate that DOE was attempting to approximate the costs of other

problems it identified with its application of the “2x factor,” this approach does not comport

with the FAR requirement that the contracting officer identify a “specific cost” that was

challenged on reasonableness. FAR 31.201-3.

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Decision

The appeal is GRANTED IN PART. WRPS shall repay DOE $80,275, plus interest

calculated in accordance with FAR 52.232-17.

Marian E. Sullivan

MARIAN E. SULLIVAN

Board Judge

We concur:

H. Chuck Kullberg

H. CHUCK KULLBERG

Board Judge

Jonathan D. Zischkau

JONATHAN D. ZISCHKAU

Board Judge

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Appendix A - Findings Regarding Thirteen Individuals

DOE’s challenge to reasonableness of the contract labor resource (CLR) costs for

thirteen individuals is grouped into four categories: (1) CLR rate that exceeded the blanket

master agreement (BMA) rate; (2) CLR rate which exceeded the full-time-equivalent (FTE)

rate of a WRPS employee; (3) CLRs who lacked the qualifications for the contracted rate;

and (4) overnight rate increases, two instances in which a CLR’s rate increased from one

contract to the next. Exhibit 45 at 6-21. Set forth below are the Board’s findings regarding

the thirteen individuals.

(Sample 4)

DOE disallowed $213,325.79 paid to

in fiscal years 2013–2018;

$177,438.52 in fiscal years 2013–2015 because

rate exceeded the rate on the

BMA on which he was hired; $19,103 in fiscal years 2016 and 2017 because

did not have a computer science degree and purportedly did not meet the qualification

requirements for the BMA; and $16,784.27 in fiscal year 2018 because

rate

increased purportedly without a change in responsibilities. Exhibit 45 at 9.

was an electrical engineer with a Bachelor of Science (B.S.) and a Master

of Science (M.S.) degree in electrical engineering. Exhibit 167 at 3.

had over

twenty years of experience as an electrical engineer, including Hanford-specific experience.

Exhibit 167 at 3-6. Doug Siron, who worked for WRPS as the assistant business manager

to the CFO and business manager, testified that

was someone with “extensive

experience and was regarded [as] a subject matter expert as it related to computer

applications for the tank farms and for the DOE complex for the tank farm operations.”

Transcript, Vol. 1 at 177-78.

also held several patents in techniques for

monitoring tank farms and was a participating author of DOE guidance on safety system

software reports. Id. at 237-38. During the period at issue,

was hired on four

CLR subcontract releases: 49910-15, 49909-55, 59057, and 61834-6.

The first release (49910-15) had a period of performance from November 26, 2012,

to May 31, 2013. Exhibit 343. DOE disallowed costs because

rate exceeded

the BMA rates. Under the statement of work,

was to revise, enhance, and

support software used in plant safety. Exhibit 333.

was noncompetitively

at 38.

CLRs were hired on “releases” issued under the BMAs. Transcript, Vol. 1

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procured as the “preferred candidate”6 for a principal electrical engineer position. Id.

was subcontracted through

Exhibit 342.

BMA rate for a principal engineer in fiscal year 2013 was

Exhibit 315 at 121, while the rates for the other BMA contract holders were

. Exhibits 84 at 12, 85 at 1. For

proposed a rate of

. Exhibit 342.

To determine the reasonableness of the proposed rate, WRPS examined two published

price lists through GSA Advantage, which is an online shopping and ordering system with

numerous GSA schedule contracts. Exhibit 342. Contract GS-23F-0345K listed a rate of

$137.95/hour for an Electrical Engineer IV, which had qualifications of a B.S. and M.S. in

electrical engineering and 10–15 years of minimum experience. Exhibit 340. Contract

GS-10F-0281K listed a rate of $133.16/hour for a Principal Engineer. Exhibit 341. Based

upon

resume, experience, and comparative price lists, WRPS found

labor rate to be fair and reasonable at the time of award. Exhibit 342. After

receiving DOE’s notice of disallowance, WRPS’s further analysis confirmed that

was a fair and reasonable rate. Exhibit 37 at 47.7

For the second release (49909-55),8 covering October 1 to December 31, 2015, DOE

disallowed costs because, in addition to his rate exceeding the BMA rate,

did

not meet the BMA requirement that the hired individual possess a computer-related degree.

was contracted through

at a rate of

to be a principal electrical engineer. Exhibit 37 at 47. The labor rates for fiscal

year 2016 are not included in the rate sheet that is in the record, but the

rate for a

Preferred candidates were individuals who were requested by “the field,” or

the WRPS personnel who were working to clear the tanks. Transcript, Vol. 1 at 13, 89-90,

199-200.

Exhibit 37 is WRPS’s response to the notice to disallow costs and was created

on August 6, 2020, after all of the contested CLR releases. Throughout this appendix,

Exhibit 37 is often cited because either there is no contemporaneous documentation, or

Exhibit 37 contains information that is not in the contemporaneous documentation.

The procurement files for this release (49909-55) were not included in the

appeal file. According to WRPS, the procurement files for this release and other releases

(38979-001, 38979-026, 38794-114, 49583-17, 37650-3, 39682-37, 39665-15, 49909-56, and

58818-23) were not included in the appeal file because DOE did not challenge them in the

final decision. Demonstrative 2 at 1 n.1. The information regarding these releases is gleaned

from WRPS’s August 6, 2020, letter to the contracting officer. See Exhibit 37.

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standard principal electrical engineer in fiscal year 2015 under the BMA was

Exhibit 92. Although the rate of

was above the BMA rate for a standard

principal electrical engineer, WRPS concluded that it was fair and reasonable because it was

consistent with

historical rates. Exhibit 37 at 47.

For the third release (59057), covering a period of performance from February 1,

2016, through the end of fiscal year 2016, DOE disallowed costs because

did

not possess a computer-related degree. Exhibit 45 at 9.

was noncompetitively

procured to be a Program Support, Project Lead, and Computer System Analyst to provide

project lead and software quality services to support the software engineering process at a

rate of

. Exhibits 349, 356.

was procured through

. Exhibit 356.

, although

that fact was not known to WRPS until DOE pointed it out to WRPS. Exhibit 32 at 24. At

the time of procurement, WRPS did not request a conflict of interest disclosure statement

because “

is providing software-related services only.” Exhibit 356 at 4. WRPS

determined at the time of award that

rate was fair and reasonable because it

was consistent with the rate paid for

work historically. Id. at 3.

For the fourth release (61834-6), covering fiscal year 2017, DOE disallowed costs

because

received an overnight labor rate increase from

Exhibit 45 at 9.

was hired to serve as senior software project manager with

responsibility for oversight and manager responsibilities to reduce the backlog of required

software change requests, an increase in responsibility from his previous position. Exhibit

365 at 1; Transcript, Vol. 1 at 248-49; Exhibits 37 at 48, 364.

was the preferred

candidate on a request that required four years or greater in “Computer Science, Computer

Engineering, Software Engineering, Electrical Engineering, or related technical field or

discipline.” Exhibit 362. The request also required software and nuclear safety skills and

that the individual be qualified as “engineering technical staff for [the] tank farms” and as

a “software technical support analyst.” Id. Because

was paid at the BMA rate

(

), WRPS determined at the time of award that his rate was fair and reasonable.

Exhibit 363.

(Sample 5)

For five CLRs, DOE calculated two different estimated disallowance amounts based

upon different challenges and averaged those estimates to determine the amount to be

disallowed. See, e.g., Exhibit 45 at 8 (contracting officer disallowance of

costs). For

, DOE calculated the low amount to be $179,625.05 for fiscal years

2013–2018, and the high amount to be $284,796.06 for fiscal years 2009–2018, which

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CBCA 7056

averaged to $232,210.50. Id.9 DOE disallowed the low amount because it believed

was not qualified for the rates he received. Id. DOE calculated the high amount

based upon its interpretation of WRPS’s rate testing, which DOE believed showed that

was procured at a cost seventeen percent greater than an equivalent WRPS FTE

employee. Id.; contra see Exhibit 721 (spreadsheet of WRPS’s rate testing results).

began working as an engineer in quality assurance and quality control

in 1973, and had worked as both a consultant and an engineer in quality assurance and

quality control from 1988–2016, with most of that time at Hanford for different contractors.

Exhibit 433 at 3-7; see Exhibit 37 at 52.

resume did not indicate he held a

degree, but WRPS reported that he had a Bachelor of Arts (B.A.) in education. Compare

Exhibit 433 at 3-7 (

resume) with Exhibit 37 at 52 (WRPS’s response). Mr.

Siron called

a “subject-matter expert” because

was used by DOE

as a consultant for the development of DOE nuclear waste surveillance programs.

Transcript, Vol. 1 at 253.

had four CLR subcontract releases for the period at

issue: 38979-001, 38979-026, 49908-6, and 58819-3.

Release 38979-001, for the period of performance from “date of award” through the

end of fiscal year 2010, was for a quality assurance engineer.10 Exhibit 37 at 51. WRPS

contracted for

services through

, which held a basic

ordering agreement (BOA) for staff augmentation services. WRPS competed the

requirement for six quality assurance engineers among three BOA holders. Exhibit 37 at 51.

was procured at a rate of

, which was “the second lowest overall

cost.” Id. The position required a B.S. or B.A. in engineering or a related field, five or more

years of related experience, or an equivalent combination of experience and education. Id.

WRPS determined

met the technical qualifications based on his over thirty years

of experience in quality assurance. Id. WRPS determined the rate was fair and reasonable

because

rate was established through adequate price competition. Id.

DOE did not calculate average disallowance amounts for individuals. Across

the five contested CLRs with two different amounts of costs disallowed, DOE produced a

low and high disallowance amount for the entire group, added these amounts together, and

divided by two to obtain an average. The math is the same whether the average is applied

at the group or individual level.

It is unclear when this release was awarded, but it could not have been earlier

than fiscal year 2009, because DOE only challenged costs from fiscal years 2009–2018. See

Exhibit 45 at 8.

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CBCA 7056

The first release was extended another year, through the end of fiscal year 2012, at a

rate of

, which is a 2.8% increase from the prior year’s labor rate. Id. The

second release (38979-026) was originally a two-week extension of

first

release from October 1 to October 16, 2011, at a rate of

. Id. This release was

extended to September 30, 2012, at a rate of

, which is a 1.8% increase.

Exhibit 37 at 51.

DOE argues

was not qualified was for the positions he held from fiscal

years 2013–2018. With release 49908-6, covering fiscal years 2013–2015,

was

procured as a principal quality assistance engineer. The solicitation was confusing; on it was

checked the box for principal engineer, which is a BMA labor and rate category that the

solicitation corresponded to a “BS Plus 15 Yrs Nuclear Exp.” Exhibits 97, 428; see Exhibit

37 at 51.12 However, the release also stated the skills required were “10 years [quality

assistance] experience, 5 years [quality assistance] experience within tank farms. Must have

welding and project management experience.”13 Although

did not have the B.S.

component for the general position,

was requested as the preferred candidate.

Exhibit 97. At the time of procurement, WRPS believed

rate was fair and

reasonable because

was procured through

BMA holder, at the BMA rate (

). Exhibit 428.

Under release 58819-3, which covered January 1, 2016, through March 19, 2018,

was procured as a “subject matter expert” quality assistance engineer.14 Exhibit

Even though the first release had previously been extended, a second release

was created because “the prior Release was funded by the Recovery Act and separate

accounting was needed for reporting purposes.” Exhibit 37 at 51.

Although the staff augmentation and file summary memorandum show the

period of performance ending in fiscal year 2013, WRPS’s response indicates this release

was extended through fiscal year 2015. Compare Exhibit 97 (staff augmentation document)

and Exhibit 428 (file summary memorandum) with Exhibit 37 at 51 (WRPS’s response).

This method of checking a box that corresponded to a BMA rate and

generalized degree and experience requirements but then further writing requirements in the

comments, some of which contradicted the generalized degree and experience requirements,

was how WRPS would write specialized job requirements for specific releases.

The subcontract release and file summary memorandum, which WRPS failed

to document at the time of contract agreement and was documented two months after the

beginning of performance, puts

period of performance through the end of

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CBCA 7056

434.

services were procured through

, a BMA holder, at the

in fiscal year 2016,

in fiscal year 2017, and

BMA rate of

in fiscal year 2018. Exhibits 37 at 52, 434. WRPS believed

rate

to be fair and reasonable at the time of award because he was paid at the BMA rate. Exhibit

434.

DOE calculated a deduction for the amount DOE believed

was paid

above the FTE rate for fiscal years 2009–2018. This amount was based upon DOE’s

interpretation of WRPS’s rate analysis, which was done to determine if CLR rates were

substantially higher than equivalent WRPS FTE rates. See Exhibit 721 (WRPS-IA rate

analysis). DOE believes this rate analysis showed

rate was seventeen percent

greater than an equivalent WRPS FTE. Exhibit 45 at 10.

rate for fiscal year

2018 was

. Id. According to DOE’s reasoning,

should have been

paid no more than

that year.

also worked more than 2000 hours

in only two of those ten years. Id.

(Sample 6)

For

, DOE disallowed $78,565.81, which was the average of the low amount

of $76,222.71, based on a challenge of amounts paid to

in fiscal years 2010–2018

in excess of an equivalent WRPS FTE, and the high amount of $80,908.81, based on a

challenge of amounts paid to

in fiscal years 2010–2012, during which DOE argues

he was not qualified for the rate he received. Exhibit 45 at 8.

was a work planner with more than seventeen years of experience and had

worked at the Hanford site since 1999. Exhibit 467.

possessed a B.A. in criminal

law and justice. Id. As a work planner,

was responsible for planning how the

projects to clean up the tank farm would proceed and was “instrumental” in ensuring work

would actually be performed. Transcript, Vol. 1 at 267; Exhibit 467. Five subcontract

releases are at issue: 38794-87, 38794-129, 49583-16, 49583-125, and 62218-09.

Release one (38794-87), for a performance period of June 7, 2010, through the end

of fiscal year 2010, was for a senior production control and work planner. Exhibits 69, 442.

An option to extend the release for an additional year, through fiscal year 2011 at a three

percent escalation, was exercised. Exhibits 69, 442.

was paid at a rate of

in fiscal year 2010 and

in fiscal year 2011. Exhibit 45 at 11. The

fiscal year 2016. Exhibits 434, 435. WRPS’s response indicates the contract was extended

into fiscal years 2017 and 2018. Exhibit 37 at 52.

REDACTED VERSION

CBCA 7056

position required a “Bachelors Degree in Engineering, Business, or related field, and ten or

more years of experience Hanford Project work planning.” Exhibit 436 at 3. WRPS

solicited candidates from five BOA holders, Exhibit 442 at 2-3, and

was procured

through a BOA with

. Exhibit 37 at 65.

rate was lower

than his previous rate of

on a release as a senior work planner with

.15

Exhibits 68, 442. WRPS determined at the time of award that

rate was fair and

reasonable because the BOA was competed among five BOA holders and his labor rate was

comparable to his previous labor rate. Exhibit 442 at 2.

Release two (37894-129), for performance in fiscal year 2012, was issued under the

same BOA with

for a senior mechanical production control and work planner.

Exhibits 37 at 66, 450. This procurement was not competed; instead,

was preferred

by the project. Exhibit 450.

labor rate was

, which was a 1.7%

increase from his labor rate in fiscal year 2011 under the first release. Id. at 2. This release

had the same education and experience requirements. Exhibit 72; see also Exhibit 37. Based

on his historical prices, WRPS determined at the time of award that

rate was fair

and reasonable. Exhibit 450 at 2.

Release three (49583-16), for performance in fiscal year 2013, was for a senior

production control and work planner. Exhibit 454.

was paid

, the rate

agreed upon in the BMA between

and WRPS on which

was hired. Id. This

release was extended through fiscal year 2014 at the BMA rate (

), Exhibit 117,

and again through fiscal year 2015 at the BMA rate (

). Exhibits 131, 132.

WRPS determined at the time of award that

rates were fair and reasonable

because he was paid at the BMA rates. Exhibits 117, 131, 454.

Release four (49583-125), for performance from November 30, 2015, through the end

of fiscal year 2016, was for a senior mechanical production control and work planner.

Exhibits 457, 459. WRPS requested

as a preferred candidate for the position of

preparing, coordinating, and facilitating work packages to support the tank farms and

supporting structures. Exhibit 457 at 2. As “Minimum Qualifications,” the position listed

“[a] Bachelor’s Degree in Engineering, Business or related field and eight or more years

related experience or a combination of education and experience.” Id.

was paid

the BMA rate (

). Exhibit 459. Because

was paid at the BMA rate,

WRPS concluded at the time of award that his rate was fair and reasonable. Id.

was the contractor before WRPS.

REDACTED VERSION

CBCA 7056

Release five (62218-9), with a period of performance of April 1, 2017, through the

end of fiscal year 2017, was for a senior work control planner. Exhibit 182.

was

paid the BMA rate (

). Exhibits 483, 484. The release was extended through fiscal

year 2018, and

was paid the BMA rate (

). Exhibits 37 at 66, 176 at

4. Because

was paid at the BMA rate, WRPS concluded at the time of award that

his rate was fair and reasonable. Exhibit 483.

DOE calculated a deduction for the amount

was paid above the FTE rate for

fiscal years 2010–2018. This amount was based upon DOE’s interpretation of WRPS’s rate

analysis, which was done to determine if CLR rates were substantially higher than equivalent

WRPS FTE rates. See Exhibit 721 (WRPS-IA rate analysis). DOE believes this analysis

shows

was paid six percent in excess of an equivalent WRPS FTE. Exhibit 45 at 8.

rate for 2018 was

. Id. According to DOE’s reasoning,

should have been paid no more than

that year. In addition,

never

worked more than 2000 hours in any of those nine years. Id.

(Sample 12)

DOE disallowed $59,829 paid to

because he did not meet the

qualifications on three of his releases (39681-92, 49910-02, and 49909-59) for fiscal years

2012–2016. Exhibit 45 at 12.

worked as a principal engineer, with thirty years of experience that

included Hanford-specific experience. Exhibit 76.

did not possess a B.S. or

B.A. Exhibit 37 at 69. Mr. Siron described

as “an expert” in safety analysis and

deemed

to be “integral” to the project by ensuring “the workers, the public and

the environment are protected.” Transcript, Vol. 1 at 284-85.

first release (39681-92), for the performance period of February 1 to

June 6, 2012, required him to work as a principal engineer with the skills to independently

solve engineering problems and lead other engineers. Exhibits 66 at 15, 509.

was specifically requested as a preferred candidate because of his “extensive experience.”

Exhibit 507 at 3. The position required a “minimum [of a] BS degree in Engineering

discipline PLUS 15 or more years engineering experience at a nuclear facility of Navy

Nuclear power.” Exhibit 66 at 15. According to WRPS, there is no record of

release-specific statement of work (SOW) or requirements. Exhibit 37 at 69. The WRPS file

summary memorandum documenting

hire does not indicate that

lacked a degree or that the degree requirement had been waived. Exhibit 509.

was paid the BMA rate of

, and based upon this fact, WRPS concluded, at the

time of award, that his rate was fair and reasonable. Id.

REDACTED VERSION

CBCA 7056

second release (49910-02), for fiscal year 2013, also had

was the preferred candidate and

working as a principal engineer. Exhibit 100.

the release had the box for principal engineer checked, which required a B.S. and fifteen

years of experience. Exhibit 519. However, the release also specified that “[t]he successful

candidate need not have a BS degree, but should have applicable work experience to function

as a Principal Engineer. . . . [and] should have demonstrated Hanford work experience.” Id.

at 1.

was procured through

and paid at a rate of

, which was

above the BMA rate of

with

and higher than any of the other BMA rates.16

Exhibits 86, 100. At the time of award, WRPS determined that

rate was fair

and reasonable because

rate was lower than his historical rate. Exhibit 525

at 2. The release was extended through fiscal years 2014 and 2015 at rates of

and

, respectively.

third release (49909-59), from October 1 to December 31, 2015, was

for a principal engineer. Exhibit 515.

was procured as a preferred candidate on

a BMA with

. Id.

was paid at a rate of

, which WRPS

determined, at the time of award, to be fair and reasonable based on his historical rates

because the rate was only a two percent increase from the rate from fiscal year 2015.

Exhibits 144, 515.

(Sample 13)

DOE disallowed $477,968.04 paid to

in fiscal years 2010–2018 because

DOE believed WRPS’s rate testing showed that

rate was twenty-nine percent

greater than an equivalent WRPS employee. Exhibit 45 at 13 (contracting officer

disallowance of

cost); contra see Exhibit 721 (spreadsheet of WRPS’s rate

testing results).

was a chemical engineer who had worked at the Hanford site since 1962.

Exhibit 557 at 6-9.

possessed a B.S. in chemical engineering. Exhibit 557 at 6;

see also Exhibit 37 at 87. Mr. Siron testified that “

was known for his

experience, 40 years of experience, of identifying the construction of waste tanks located out

at Hanford, and he had intimate knowledge about the formal leak assessment process.”

Transcript, Vol. 1 at 314. Because of his experience and WRPS’s need,

rates

were consistently high and ranged from

. Exhibit 37 at 87-88.

These rates were higher than comparable BMA rates. For example, in fiscal year 2013, the

The other two BMA holders had rates at

principal electrical engineer. Exhibits 84 at 12, 85 at 1.

for a

REDACTED VERSION

CBCA 7056

BMA rates for a principal engineer were

Exhibits 84 at 12, 85 at 1, 96 at 1, while

Exhibit 37 at 87.

was paid at the rate of

DOE calculated a deduction for the amount

was paid above the FTE rate

for fiscal years 2010–2015 and 2017–2018. This amount was based upon DOE’s

interpretation of WRPS’s rate analysis, which was done to determine if CLR rates were

substantially higher than equivalent WRPS FTE rates. See Exhibit 721 (WRPS-IA rate

analysis). DOE believes this analysis shows

rate in 2018 was twenty-nine

percent greater than an equivalent WRPS FTE. Exhibit 45 at 13.

rate for fiscal

year 2018 was

. Id. According to DOE’s reasoning,

should have

been paid no more than

that year.

never worked more than 2000

hours in a fiscal year. Id.

(Sample 18)

DOE sought to disallow $71,338, paid to

in fiscal years 2010 and 2011,

because

did not possess the B.S. degree required in the position description.

Exhibit 45 at 14.

had “substantial work experience” as a senior work control planner, a

position that develops the work packages that other employees follow to ensure that the work

is accomplished safely and efficiently. Transcript, Vol. 1 at 326, 330.

was “the

only electrical work control planner for the [Tank] Farm.” Id. at 326.

was the incumbent senior work control planner prior to fiscal year 2010.

Exhibit 641 at 1. Due to his past performance and the fact that he was “the only individual

qualified to perform the required electrical planning services,”

was

noncompetitively procured for fiscal year 2010 to maintain his current position at a rate of

. Exhibits 637 at 1, 641, 642. WRPS extended the release for fiscal year 2011

at a rate of

. Exhibit 37 at 96. WRPS compared

proposed rate to

other rates for work package planners and found that the lowest of the historical rates was

. Exhibit 641 at 2. Based upon this analysis, WRPS concluded, at the time of award,

that

rate was fair and reasonable. Id.

(Sample 21)

DOE sought to disallow $84,470 paid to

in fiscal year 2018 because of

what DOE perceived to be an “overnight rate increase.” Exhibit 45 at 15. DOE asserted that

REDACTED VERSION

CBCA 7056

it was unreasonable that

rate went from

on one contract(56825)

on the next contract (61834-05), without any change in scope of work.

was contracted (56825) through her own firm,

In fiscal year 2015,

, on a non-competitive basis to work as a principal software quality consulting

engineer at the rate of

. Exhibits 37 at 99, 680. The BMA rates for a principal

quality assurance engineer in fiscal year 2015 were

. Exhibits 84 at 12, 85 at 1, 96 at 1.

was described by Mr. Siron

as “pretty much a one-man operation, so less overhead, less rate of charge,” so she was able

to price herself below the market rate. Transcript, Vol. 2 at 8.

contract was

extended for fiscal years 2016 and 2017 at a rate of

. Exhibit 37 at 99. For

fiscal year 2018,

decided against contracting herself through her own business

and, instead, contracted through

. Exhibit 685. She was hired as a

software quality assurance specialist at a rate of

, which was the BMA rate. Id. at 2.

Because the rate was in line with the BMA rate, WRPS determined, at the time of award, that

labor rate was fair and reasonable. Exhibit 685.

(Sample 23)

DOE sought to disallow $76,515 paid to

in fiscal years 2011–2016 across

three releases. DOE calculated the amount based upon the difference in rates between a

principal electrical engineer, a position for which DOE believed

was not qualified,

and an operations engineer, a difference of $8.25/hour. Exhibit 45 at 16.

worked as a principal electrical engineer.

did not possess a B.S.

or B.A. degree. Exhibit 37 at 102; see also Exhibit 650 at 5-6.

possessed

significant work experience in instrument and control engineering, including

Hanford-specific experience. Exhibit 650 at 5-6. Mr. Siron described

as “a very

experienced and knowledgeable individual that has worked out on the site for over 25 years

and has immense knowledge as it relates to instrument and control engineering.” Transcript,

Vol. 2 at 13. In particular,

was trained and capable of entering the restricted zones

of the tank farms, which allowed him to “go in and troubleshoot areas that most engineers

that are not trained cannot.” Id. at 14; Exhibit 37 at 102.

first release (39682-24), for work performed from January 3 to August 1,

2011, was as a principal electrical engineer tasked with monitoring the tank farm and

upgrading the control system. Exhibits 644 at 1, 647 at 1; see Exhibit 646.

was

the preferred candidate for the position. Exhibit 644 at 1. The release checked the box for

a principal engineer that required a B.S. and fifteen years of nuclear experience, but the

written description of the minimum qualifications stated “[e]lectrical, mechanical, or

REDACTED VERSION

CBCA 7056

chemical engineer with an accredited degree and 2–5 years relative experience (15 years

relative without degree).” Exhibit 644 at 1.

was paid at the BMA rate

(

). Exhibit 646 at 2. At the time of award, WRPS determined that

rate was fair and reasonable because he was a preferred candidate who was paid at the BMA

rate. Exhibit 646.

second release (39682-39), for performance from October 11, 2011,

through the end of fiscal year 2012, was as a principal electrical engineer.17 Exhibits 652,

653.

was paid at the BMA rate (

). Exhibit 652 at 2. Because of

support on the previous release and his payment at the BMA rate, WRPS

determined at the time of award that

rate was fair and reasonable. Exhibit 652.

third release (49910-3), for performance during fiscal year 2013, was as

a principal electrical engineer. Again, the qualifications for the position were confusing.

While the box that required a B.S. degree and fifteen years of nuclear experience was

checked, the position description also stated that

was the preferred candidate

requested and that the position “[r]equires knowledge of WRPS Engineering procedures

including software quality assurance requirements for document preparation and change

control,” which

possessed. Exhibit 658 at 1.

was paid at a rate of

, which was higher than the established BMA but less than

was paid

on his previous release. Exhibit 662. WRPS obtained

services through

which had a BMA with WRPS at a rate of

for a principal electrical engineer.

Exhibit 96. The other two BMA holders had rates of

for a

principal electrical engineer. Exhibits 84 at 12, 85 at 1. WRPS determined

rate

was fair and reasonable, at the time of award, because the rate was less than his historical

rates on the previous BMA. Exhibit 662 at 2.

(Sample 24)

DOE disallowed $356,435, paid to

in fiscal years 2014–2018, because

DOE believed WRPS’s rate testing showed that

rate was thirty-two percent

greater than an equivalent WRPS employee. Exhibit 45 at 17 (contracting officer

disallowance of

costs); contra see Exhibit 721 (spreadsheet of WRPS’s rate

testing results).

This release was awarded non-competitively because it continued

services from the prior fiscal year but required a new release due to a different funding

mechanism. Exhibit 652 at 1.

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CBCA 7056

was a radiation control health physicist who provided independent internal

audits of the Radiological Control Program (RadCon program) as prescribed under 10 CFR

835.102. The RadCon program tracked and monitored the amount of radiation at the site to

ensure the safety of the people working out in the field. Transcript, Vol. 2 at 27.

had a M.S. in environmental sciences (risk assessment/toxicology) and a B.S. in nuclear

was “uniquely qualified” for

engineering. Exhibit 37 at 114; also Exhibit 369.

the position because he had extensive experience at Hanford, other DOE nuclear sites, and

ten years of experience at the waste treatment plant. Exhibit 369.

services were

procured on two releases (54719 and 60173), on which he was paid rates of

and

. Exhibit 381, 419. WRPS did not compete

releases; instead,

his rates were deemed reasonable based upon comparisons to a GSA schedule contract and

the prices he previously charged to another contractor. Exhibits 381, 419.

DOE calculated a deduction for the amount

was paid above the FTE rate

for fiscal years 2014–2018. This amount was based upon DOE’s interpretation of WRPS’s

rate analysis, which was done to determine if CLR rates were substantially higher than

equivalent WRPS FTE rates. See Exhibit 721 (WRPS rate analysis). DOE believes this

analysis showed

rate in fiscal year 2018 was thirty-two percent greater than an

equivalent WRPS FTE. Exhibit 45 at 17.

rate for fiscal year 2018 was

. Id. According to DOE’s reasoning,

rate should have been

that fiscal year.

never worked more than 1700 hours in a fiscal year.

Id.

10.

(Sample 27)

For

, DOE calculated the low amount to be disallowed as $454,244.89 paid

in fiscal years 2013–2015, and the high amount to be disallowed as $595,457.40, paid in

fiscal years 2009–2018, which averaged to $524,851.15. Exhibit 45 at 18. DOE sought to

disallow the low amount because

was paid a rate above the BMA rate. Id. DOE

calculated the high amount based upon DOE’s belief that WRPS’s rate testing showed that

was procured at a rate twenty-two percent higher than an equivalent WRPS FTE.

Id.; contra see Exhibit 721 (spreadsheet of WRPS’s rate testing results).

had four releases (37650-3, 39682-1, 39682-37, and 49910-1) over fiscal

years 2009–2015, and an additional subcontract (58995) from fiscal years 2016–2018.

Exhibit 37 at 120-21. DOE sought to disallow $454,244.89 from one of these releases

(49910-1) because the rate paid to

exceeded the BMA rate.

On release 49910-1, WRPS contracted with

for

year 2013 as a principal process/chemical engineer at a rate of

services for fiscal

. Exhibit 102.

REDACTED VERSION

CBCA 7056

was the preferred candidate for the position. Exhibit 706 at 1. The position was

to assist in the process of moving tank waste materials to the waste treatment facility and

“provide[] management, technical, and administrative functions only. No hands-on field

work activities will be performed.” Id. at 2. Knowledge of the testing, commissioning, and

pre-operations activities involved was required. Exhibit 707 at 1. Mr. Siron testified that

“was very knowledgeable of the waste treatment plant facility and construction

that has to be integrated with the tank farms.” Transcript, Vol. 2 at 32.

rates on the previous releases were

(first release),

(second release), and

(third release). Exhibit 37 at 120-21. The

rates for the second and third releases were deemed reasonable based upon

rate

for the first release. Exhibits 37 at 121, 65 at 2. WRPS also compared

rate to

the rate of a different subcontractor who worked as a “senior technical specialist” at a rate

. Exhibits 37 at 121, 65 at 2.

first release was placed under a

BOA with

. Exhibit 730. WRPS conducted

two price analyses to determine if

rate was reasonable prior to issuing the BOA:

(1) WRPS found GSA rates for similar labor categories; and (2) WRPS examined and found

price data to be reasonable. Exhibit 731 at 2; see also Exhibit 37 at 125. Mr. Siron

testified that this price data analysis was an example of “analyzing data other than certified

cost or pricing data provided by the offeror for FAR [15.404-1(b)(2)(vii)].” Transcript,

Vol. 2 at 42. Based on these price analyses, WRPS found

rate fair and

reasonable at the time of award.

For fiscal year 2013, the year for which

rate was challenged,

BMA rate for a principal process engineer was

. Exhibit 96. The other two

BMA holders had rates of

. Exhibits 84 at 12, 85 at 1.

Although

rate was more than

BMA rate, WRPS concluded, at

the time of award, that the rate was fair and reasonable because the rate was less than

was paid under his third release (39682-37). Exhibit 103 at 2.

DOE calculated a deduction for the amount DOE believed

was paid above

the FTE rate for fiscal years 2009–2018. This amount was based upon DOE’s interpretation

of WRPS’s price analysis, which was done to determine if CLR rates were substantially

higher than equivalent WRPS FTE rates. See Exhibit 721 (WRPS-IA rate analysis). DOE

believed this rate analysis showed

rate in fiscal year 2018 was twenty-two

percent greater than an equivalent WRPS FTE. Exhibit 45 at 18.

rate for fiscal

year 2018 was

. Id. According to DOE’s reasoning,

should have

been paid no more than

also never worked more than 2000 hours

in a fiscal year. Id.

REDACTED VERSION

CBCA 7056

11.

(Sample 29)

, which was an

DOE sought to disallow $204,401.66 in costs paid to

average of a low amount of $80,275.99 that DOE calculated because

was not

qualified for the rates that he was paid in fiscal years 2012–2018, and a high amount of

$328,527.32 that DOE calculated based upon DOE’s belief that WRPS’s rate testing showed

that

rate was thirty-two percent greater than an equivalent WRPS FTE for

fiscal years 2010–2018. Exhibit 45 at 19; contra see Exhibit 721 (spreadsheet of WRPS’s

rate testing results).

DOE challenged

qualifications for three releases, asserting that

did not have the educational degree required for those positions. In the appeal

file, there are two resumes for

, one from 2012 and one from 2015. Exhibits

487, 496. Both show that he attended ITT Technical Institute for Computer Aided Drafting

and Design in Spokane, Washington, but neither indicates whether or when he graduated.

Id. Also, both resumes list his experience working as a CAD drafter at Hanford as his only

work experience. Id. At the hearing, Mr. Siron testified that WRPS looked into the

discrepancies in

resume by having their subcontractor,

, conduct a

background check on

. Transcript, Vol. 2 at 50. According to Mr. Siron, that

background check “confirmed that

obtained a degree and graduated with

honors.” Id. However, Mr. Siron did not testify as to when

obtained his degree.

Id.

On release 39681-99, for performance from June 13, 2012, through the end of fiscal

year 2012,

was hired as a senior CAD drafter to prepare CAD drawings for the

radiation tanks. Exhibits 486, 488 at 1; see Exhibit 37 at 131. WRPS sought

as the preferred candidate. Exhibit 486. The position required an individual with “1+ years’

of engineering & facility drafting experience,” and that the person “must be a graduate of a

recognized Jr. College or technical school with a certificate or degree in computer-aided

drafting.” Id.

was paid the BMA rate (

), which WRPS deemed

reasonable at the time of contracting. Exhibits 487 at 2, 488, 489.

On release 49909-5, for fiscal year 2013,

worked as a senior CAD

drafter.

again was procured as a preferred candidate and the position required

releases there is inconsistency in the documentation about

his exact job titles. For example, the release specific SOW, Exhibit 495 at 1, put his job title

as “Senior CAD Drafter Engineering,” but checked a box labeled “Senior Drafter” while the

subcontract release, Exhibit 498, put his title as “CAD Designer,” and the file summary

REDACTED VERSION

CBCA 7056

“a degree or certificate in computer-aided drafting.” Exhibit 495 at 2.

was paid

, which was below the BMA rate (

). Exhibits 37 at 132,

at a rate of

498. This release was extended through fiscal year 2014 at

, and from October 1

to December 31, 2015, at

, rates which were below the BMA rate. Exhibit 37

at 132. At the time of award, WRPS found

rate to be fair and reasonable

because it was lower than the BMA rate. Id.

On release (58817-10), for a performance period of January 1, 2016, to the end of

fiscal year 2016,

was again hired as a CAD designer. Exhibit 506. For this

release, in addition to challenging his qualifications based on his resume, DOE also asserted

that

did not have the required number of years of experience for the position.

The SOW for

incorporated the June 5, 2023, qualification requirements from

the applicable BMA, which included “certifications in AutoCAD and a 3-D modeling

package . . . and 5–9 years of related experience.” Exhibit 501 at 2.

was

identified as the preferred candidate. Id. at 1.

was paid at a rate of

which was the BMA rate. Exhibits 37 at 132, 505 at 2. At the time of award, this rate was

determined to be fair and reasonable because

was paid at the BMA rate.

Exhibit 505. This release was extended for fiscal year 2017 at

and for fiscal

year 2018 at

, both of which were at the BMA rate. Exhibit 37 at 122.

DOE calculated a deduction for the amount DOE believed

was paid

above the FTE rate for fiscal years 2010–2018. This amount was based upon DOE’s

interpretation of WRPS’s price analysis, which was done to determine if CLR rates were

substantially higher than equivalent WRPS FTE rates. See Exhibit 721 (WRPS-IA rate

analysis). DOE believed this rate analysis showed

rate in 2018 was thirty-two

percent greater than an equivalent WRPS FTE. Exhibit 45 at 19.

rate for

fiscal year 2018 was

. Id. According to DOE’s reasoning,

should have

been paid no more than

for fiscal year 2018.

also worked more

than 2000 hours during only two of those nine fiscal years. Id.

memorandum, Exhibit 497, also lists the title as “CAD Designer.”

a rate that would indicate he was a senior CAD drafter.

was paid at

Both the BMA rate and

rate for 2018 were revised to

to accommodate a new state law requiring paid sick leave for non-exempt employees.

Exhibit 37 at 132.

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CBCA 7056

12.

(Sample 30)

DOE sought to disallow $198,565, for amounts paid to

applicable BMA rates in fiscal years 2014 and 2015.

above the

earned a B.S. in chemistry and an M.S. in chemical engineering. Exhibit

123.

possessed over thirty years of experience, including Hanford-specific

experience, and held three separate patents relating to nuclear safety processes. Id. WRPS

procured

because he had “specialized skills needed by the field . . . [and] no

other candidates were determined technically acceptable.” Exhibit 125 at 2.

For release 49910-30, covering April 7, 2014, through the end of fiscal year 2014,

was procured through

as a principal process engineer at a rate of

Exhibit 125. It appears that this release was extended, and

was paid the same

rate in 2015. Exhibit 45 at 20. The qualifications for the position were a B.S. degree and

fifteen years of nuclear experience. Exhibit 687. The specific statement of work required

someone with experience in software design, development, and testing to support the process

control system simulator model. Id.

was the preferred candidate. Exhibit 693.

At the time of

release,

BMA rate was

; the other

two BMA holders had rates of

. Exhibits 84 at 12, 85 at 1, 96.

When

proposed to provide

services, but at higher rates than the BMA

rates, WRPS procurement requested offers from all of the engineering staff augmentation

subcontractors. Exhibit 693. The field determined that none of the responding candidates

would meet its requirements. Id.

was again requested as a preferred candidate

because of the need for his specialized skills. Id. At hearing, Mr. Siron confirmed that

WRPS “resorted” to

and his higher rate because amongst the BMA holders at

the BMA rate “[t]here was [sic] no technically qualified individuals.” Transcript, Vol. 2

at 60.

Because

rate was above the BMA rate, WRPS conducted a price

analysis in which it compared

rate to four different rates, two different GSA

Schedule contracts, and the rates of two different WRPS subcontracts. Exhibit 693 at 2. The

GSA Schedule contracts that were compared are contract GS-10F-0370T for a principal

process engineer at

and contract GS-35F-0092U for a senior principal process

engineer at

. Id. The two WRPS subcontracts are

49910-1 release

for his work as a principal process chemical engineer at a rate of

and “definitized

rates” from

for principal process

chemical engineer at

. Id. Based upon this analysis, WRPS found

rate to be fair and reasonable at the award of the release. Exhibit 125.

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CBCA 7056

13.

(Sample 32)

, the low amount of $336,865, the

DOE produced two amounts for

amount disallowed because

lacked the qualifications for the position in fiscal

year 2013; the high amount of $531,255.05, calculated based upon DOE’s belief that

WRPS’s rate testing showed that

hourly rate was thirty-four percent greater

than an equivalent WRPS FTE employee for fiscal years 2013–2018. Exhibit 45 at 21

(contracting officer disallowance of

costs); contra see Exhibit 721

(spreadsheet of WRPS’s rate testing results). In November 2019, WRPS agreed to pay back

$336,865 because

did not have the qualifications to be billed at the rate of a

project manager rather than a principal process engineer. Exhibits 37 at 148, 45 at 21.

DOE calculated a deduction for the amount

was paid above the FTE

rate for fiscal years 2013–2018. Exhibit 45 at 10. This amount was based upon DOE’s

interpretation of WRPS’s rate analysis, which was done to determine if CLR rates were

substantially higher than equivalent WRPS FTE rates. See Exhibit 721 (WRPS’s rate

analysis). DOE believes this analysis showed

rate in 2018 was thirty-four

percent greater than an equivalent WRPS FTE. Exhibit 45 at 21.

rate for

fiscal year 2018 was

. Id. According to DOE’s reasoning,

rate

should have been

that year.

never worked more than 2000 hours

in any of those six fiscal years. Id.

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