Granite Construction Co. has agreed to repay the federal government $367,500 in a settlement with the Justice Dept. regarding alleged overbilling on federal construction projects.

The settlement, which Justice announced on Feb. 8, centers on prices that federal officials claim Granite inflated on projects financed by the Dept. of Transportation and the U.S. Army Corps of Engineers between 2006 and 2008.

The settlement agreement states that Granite disclosed the potential overcharges to the Justice Dept. in October 2009.

A Granite spokeswoman said in an emailed statement, "This was an inadvertent and honest mistake which was confirmed by the [Justice] Department's agreement to a settlement that included no penalties."

The spokeswoman said the billing issue was discovered by Granite's compliance program. She added, "Our voluntary disclosure, followed by our full cooperation with the government and prompt repayment, illustrates Granite's ethical culture and commitment to doing the right thing."

Justice says Granite, based in Watsonville, Calif., sought price increases through change orders and requests for equitable adjustment that used general liability and workers’ compensation insurance rates that had additional financial “cushions” above the amounts Granite actually incurred. Justice says those higher amounts should not have been charged to the federal agencies.

The settlement document states the agreement “is neither an admission of liability by Granite nor a concession by the United States that its claims are not well founded.”

Stuart F. Delery, principal deputy assistant attorney general in the Justice Dept.'s civil division, said in a statement, “This settlement is an example of the department's commitment to ensuring that contractors deal squarely and honestly with the government at all times."

Story updated and revised to include Granite's statement, received on the evening of Feb. 8.


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