A former Hanford contractor has agreed to pay just over $3 million to settle allegations of fraud in its reports to the federal government on its small business subcontracts.

CH2M Hill Plateau Remediation Co. was eligible for incentive pay for awarding subcontracts to small businesses, including those that the Small Business Administration designated as being in Historically Underutilized Business Zones, or HUBZones.

It also faced financial penalties if it fell short of goals, according to the Department of Justice.

“Small-business fraud not only harms the taxpayers and the vital cleanup mission at Hanford, but legitimate small disadvantaged businesses that do not have the opportunity to fairly compete for and perform subcontracts,” said Joseph Harrington, acting U.S. attorney for the Eastern District of Washington.

The investigation into CH2M’s small-business subcontracting was the result of a 2014 lawsuit filed by Savage Logistics, a Hanford-area small business and owner Salina Savage.

Savage and her company will receive nearly $866,000 of the settlement under a federal law that rewards whistle-blowers with a portion of money recovered.

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The Department of Justice joined the case brought by Savage and alleged that CH2M knew that two of its subcontractors were not HUBZone businesses when it issued contracts to them, but falsely reported to the Department of Energy that they were.

The subcontracts were awarded to Indian Eyes of Pasco and Phoenix-ABC, also based in the Tri-Cities area.

CH2M was the Hanford nuclear reservation’s environmental-cleanup contractor for the center of the site, working on projects such as demolition of the Plutonium Finishing Plant, for about 12 years until its contract expired early this year. It employed about 1,700 workers.

In its last annual evaluation CH2M earned $17.2 million in incentive fee. But DOE said it needed to improve subcontract audits, as pointed out in a DOE Office of Inspector General audit report that found that taxpayers may have been overcharged for some work.