BATTELLE AGREES TO PAY U.S. $330,000 FOR MISUSING DOE EQUIPMENT The Department of Justice announced WASHINGTON, D.C. today that Battelle Memorial Institute has agreed to pay the United States $330,000 to settle allegations it used governmentowned equipment to service commercial customers in violation of a federal contract. The payment settles claims brought in a qui tam lawsuit by Jagdish C. Laul, a former Battelle scientist at the Department of Energy's Pacific Northwest Laboratory. Battelle, a not-forprofit Ohio corporation, operates the laboratory on behalf of DOE under an approximately $500 million annual contract. DOE, which owns most of the property and equipment at PNL, allows Battelle to use the equipment under certain circumstances for non-government customers. The lawsuit alleged that Battelle knowingly used DOE equipment for commercial purposes without informing DOE and failed to pay DOE for the use of the equipment as required under its operating contract. After the DOE Office of the Inspector General began an investigation in 1992, Battelle reimbursed the government $110,000 for unauthorized use of certain spectrometry equipment from 1988 through 1992. Spectrometers are used for chemical and radiation analysis. Laul brought the suit under the qui tam provisions of the False Claims Act, which allows private individuals to sue on behalf of the government and share in any recovery obtained as a result of their lawsuit. Under the settlement agreement, Laul will receive $60,800 for bringing the action. The False Claims Act provides for the recovery of treble damages suffered by the government and penalties for each false claim submitted. 96-250 ##### TL International Association of Environmental Testing Laboratories 505 Wythe Street • Alexandria, Virginia USA 22314 • Phone (703) 739-2188 • Fax (703) 739-2556 Linda E. Christenson, Esq. Executive Director and General Counsel August 8, 1996 The Honorable Jan Meyers Chairman, House Committee on Small Business U.S. House of Representatives 2361 Rayburn House Office Building Washington, DC 20515-6315 Re: July 16 and July 18, 1996 Small Business Committee Hearings Dear Representative Myers: Privatization is an increasingly important issue for the environmental laboratory industry. The International Association of Environmental Testing Laboratories (IAETL), a trade association representing the interests of the private sector environmental testing industry, applauds The House Committee On Small Business' efforts to reduce government and non-profit competition with private industry, in accordance with federal policy as established by OMB Revised Circular A-76. The most recent White House Conference on Small Business considered the issue of privatization as one of the top priorities for small business. Because government and government sponsored institutions have tax-exempt status, they compete unfairly when they enter into lines of business which are not inherently governmental. This is why Revised Circular A-76 establishes that "the Government shall not start or carry on any activity to provide commercial product or service if the product or service can be produced more economically from a commercial source." Three pending bills are designed to put some teeth in this principle. H.R. 28 and S. 1724, its Senate companion bill, the Freedom from Government Competition Act, establishes a process by which the Office of Management and Budget will identify those government functions which are commercial in nature, and recommend a plan to the Congress which will lead to those functions being contracted out to the private sector over a five-year period. H.R. 2154, a bill to privatize routine environmental testing analysis would require government departments and agencies to use non-governmental testing laboratories in support of monitoring, assessment, or compliance decision making. IAETL urges the members of the House Small Business Committee to support H.R. 28 and H.R. 2154. Most commercial laboratories are small businesses providing independent testing services for environmental compliance, public health, and product safety purposes. Private environmental testing labs are facing increasing competition from government and nonprofit labs that are seeking ways to acquire additional revenue beyond their traditional government funding sources. Many government sponsored labs now provide routine, repetitive, commercial laboratory services to raise revenue for their operations at the expense of small business operations. Numerous private laboratories have gone out of business and many more are struggling to survive. Enclosed is IAETL's recent Data Report on Federal and State Government Environmental Testing Analysis Trends. We request that, in addition to this letter, the report be entered into the record for the House Committee on Small Business July 1996 hearings concerning government and non-profit competition. Sincerely, Linda E. Christenson, Esq. Executive Director and General Counsel |