Alabama-based BL Harbert International alleges the government failed to cover pandemic-related costs and abandoned a negotiated settlement
By Midtown Times Staff
October 29, 2026
WASHINGTON (Midtown Times) — A longtime builder of American diplomatic facilities has sued the State Department for more than $461 million, alleging that the federal government refused to reimburse costs incurred while the company continued working on overseas projects during the COVID-19 pandemic.
BL Harbert International filed the complaint Wednesday in the U.S. Court of Federal Claims. The Alabama-based construction company accuses the government of breaching contracts covering 12 embassy and consulate projects on four continents.
The lawsuit includes 13 certified claims totaling at least $461,097,380, plus interest and other relief. The allegations have not been decided by the court, and the claimed amount does not represent a judgment against the government.
Pandemic disruptions increased costs
BL Harbert said it was working on 17 diplomatic construction projects when the pandemic disrupted international travel, labor markets and supply chains in early 2020.
According to the complaint, the company asked whether it should suspend operations and secure the construction sites until conditions improved. The State Department instead directed it to remain prepared, continue purchasing and shipping materials and keep the projects moving wherever possible.
The contractor says those instructions required it to retain workers and equipment, store materials and operate under restrictions that significantly reduced productivity. The company alleges that officials told it to document the additional expenses and submit requests for equitable adjustments under its contracts.
The projects included new embassies in Turkey, Guatemala, Montenegro, Namibia and Honduras, along with consulates in Morocco, Thailand, Iraq and Mexico. The government has taken possession of all 12 facilities involved in the current case, according to the complaint.
Company alleges government abandoned settlement
BL Harbert claims career State Department officials reached a tentative $370 million settlement with the company in September 2025. The government allegedly issued an initial payment of approximately $501,636 but did not complete the remaining payments or contract modifications.
The lawsuit alleges that political appointees later intervened and that the decision to withdraw from the negotiated arrangement came from senior levels of the government. The complaint does not publicly establish that Secretary of State Marco Rubio personally directed the decision.
Contracting officers began rejecting the company’s certified claims in July, and final decisions had been issued on all 13 claims by Oct. 13, according to reporting on the filing.
The current lawsuit seeks damages under the original construction contracts. It does not yet ask the court to enforce the alleged $370 million settlement, which the company says remains part of a separate administrative process.
“We kept our commitment under extraordinarily difficult conditions,” BL Harbert International Group President Charles Bohn said in a statement. “We are asking the government to keep its commitment to us.”
The State Department had not issued a public response to the allegations when the lawsuit was reported.
BL Harbert says it has completed approximately 50 U.S. embassy and consulate projects over two decades, with a combined value exceeding $8 billion. The company argues that the dispute could discourage the limited number of American contractors qualified to build highly secured diplomatic facilities overseas.
