Legal
Michigan Construction Firm To Pay $2.5M To Settle False-Claims Allegations
A Michigan construction company and a top executive at the firm will pay the federal government nearly $2.5 million to settle allegations of false claims for a federally funded overseas contract, the U.S. Dept. of Justice says.
DOJ said on July 26 that Sorensen Gross Construction Co., Flint, Mich., and Khalil Saab, corporate vice president, reached an agreement with the government to pay $2.481 million in the case, which involves a contract in Jordan financed by the U.S. Agency for International Development (USAID).
The department also noted that the government's claims are allegations and said that there has been no finding of liability for the company and Saab.
The company and Saab did not respond to ENR's July 26 request for comment.
DOJ said the allegations deal with a contract between Jordan's Ministry of Public Works and Housing and Sorensen Gross to build or refurbish 16 schools in Aqaba. The project was financed by USAID.
The agency also approved the bid solicitation, prequalified the bidders and approved selection of Sorensen Gross as prime contractor as well as the contract's terms, according to DOJ.
Under the contract, Sorensen Gross was prohibited from subcontracting more than 50% of the cost of the work, and subcontracts with Jordanian firms were limited to $5 million.
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Moreover, USAID and the Jordanian ministry were required to approve any subcontract that exceeded $100,000.
DOJ alleged that Sorensen Gross subcontracted nearly all of the Aqaba project work to Concorde, a Jordanian firm.
The government also claimed that Sorensen Gross and Saab falsely certified that their company was carrying out work on the schools contract and that Sorensen Gross submitted invoices to USAID for work that Concorde did.
Sorensen Gross then transferred payments it received from USAID to Concorde for the work that the Jordanian firm performed, according to DOJ.
According to Sorensen Gross's web page, the company provides preconstruction, construction management and consulting, on-site supervision, quality control and other services.
Its projects include hospitals; university buildings; office buildings; and mixed-use, airport and water-treatment facilities.
The company says it is best known in the Flint area and elsewhere in southeast Michigan but also notes that it has finished projects in Canada, Mexico and the Middle East.
The company says that John Sorensen and Robert Gross founded the company in 1925 in Grand Rapids and the firm moved to Flint two years later.
