Michigan-based construction firm settles USAID allegations for nearly $2.5 million

by Ben Vernia | July 27th, 2018

On July 26, the Department of Justice announced that Flint, Michigan-based Sorensen Gross Construction Co. and one of its officers had agreed to pay nearly $2.5 million to settle civil allegations that the company wrongfully subcontracted work for USAID in Jordan. According to DOJ’s press release:

The Justice Department announced today that Sorensen Gross Construction Company (Sorensen) and its corporate vice president, Khalil Saab, have agreed to pay $2.481 million to resolve allegations that they submitted false claims for payment under a construction contract funded by the United States Agency for International Development (USAID).

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The settlement announced today resolves allegations related to a contract between Sorensen, a Michigan-based U.S. company, and the Jordan Government’s Ministry of Public Works and Housing (Ministry) for a project to build or renovate 16 schools in Aqaba, Jordan (Aqaba Project) that was financed by USAID.  In addition to funding the Aqaba Project, USAID approved the solicitation for bids, prequalified bidders, and approved the selection of Sorensen as the prime contractor and the terms of its contract with the Ministry.   Pursuant to the contract, Sorensen could not subcontract more than 50 percent of the work on the Aqaba Project, and any subcontract valued at more than $100,000 had to be preapproved by USAID and the Ministry. In addition, the contract limited subcontracts with Jordanian companies to $5 million.

The United States contends that Sorensen subcontracted almost the entirety of the work on the Aqaba Project to a local Jordanian company, Concorde, in violation of the contract terms.  The United States further contends that Sorensen and Mr. Saab falsely certified that Sorensen was performing work under the contract and that Sorensen invoiced USAID for work performed by Concorde.  Sorensen then transferred payments it received from USAID to Concorde for the work that Concorde performed.

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The case apparently arose from a government investigation, and not by the filing of a whistleblower suit.

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