Contrack International Inc., a McLean,Va.-based construction company, has agreed to pay the U.S. government $3.5 million to settle allegations the company submitted false claims related to U.S. Agency for International Development water and wastewater project contracts in Egypt in the 1990s.
The Dept. of Justice, which announced the settlement on July 12, said bidders for the contracts were required to be precertified and, in some cases, prove that they were U.S. companies.
In a lawsuit filed in 2004, the DOJ contended that members of a joint venture that won the USAID contracts—Contrack, Washington Group International Inc. and Misr Sons Development S.A.E., an Egyptian company—“evaded the prequalification requirements by concealing the identity of the joint-venture partners.” (Misr Sons Development is also known as Hassan Allam Sons.)
Thus, the U.S. alleged, Contrack and the other firms in the JV received contracts for which they were not eligible.
The settlement agreement, which DOJ and Contrack officials signed on July 11, states, “Contrack expressly denies the allegations of the United States … and denies that it has engaged in any wrongful conduct in connection with the covered conduct.”
In a statement released July 16, Contrack said that it "continues to deny any wrongdoing or knowledge of illegal conduct. " The company added, "Contrack's management simply concluded that a prolonged legal process would not be in the best interest of the company."
Contrack also said that the $3.5-million payment is less than 1% of the sum that the Justice Dept. sued for in 2004. The company said the lawsuit "did not question Contrack's eligibility or performance of the work."
Contrack is a subsidiary of Cairo-based Orascom Construction Industries. According to Contrack’s website, Orascom acquired a 45% interest in the company in 1998 and added the remaining 55% in 2005. Contrack ranks at No. 102 on ENR’s 2013 Top 400 Contractors list.
The DOJ said, “The government is continuing to pursue its claims against the other two defendants in the  suit.”
Washington Group was acquired by URS Corp. in 2007. URS declined comment, spokeswoman Pamela Blum said.
Story updated on 7/17/13 to include Contrack statement issued late on 7/16.