Embassy builder sues State Department for $461 million in COVID-19 claims

FIRST ON FOX — The latest lawsuit launched against the Trump administration seeks to recover more than $461 million after the State Department ordered a longtime embassy builder to continue construction projects around the world during the COVID-19 pandemic.

BL Harbert International, which has built dozens of U.S. embassies and consulates for more than two decades, reached a $370 million settlement with the State Department to handle resulting claims — but the company says the deal was canceled after intervention by current political leaders.

The builders are now seeking to recoup lost funds by suing the Trump administration and filed suit Wednesday in the U.S. Court of Federal Claims, Fox News Digital first learned. The complaint covers 12 diplomatic construction projects on four continents, including facilities in Türkiye, Iraq, Thailand, Morocco, Mexico and Central America.

The company says career State Department officials closed the $370 million deal in September 2025, but the government paid only $501,636 before pulling out. Harbert claims that political leaders “inserted themselves into the process after a settlement was reached” and that the decision to abandon it “came from above.”

“We did not want to take this step. The U.S. government is an important partner and we are proud of the work we do together to advance U.S. interests and protect Americans serving overseas,” Charles Bohn, president of BL Harbert’s International Group, said in a statement.

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“But we have a responsibility to our employees and to the future of this mission. We kept our commitment under extraordinarily difficult conditions. We ask the government to keep its commitment to us.”

Six U.S. diplomatic complexes built by BL Harbert International and included among the projects at issue in the company’s lawsuit against the federal government. (United States Court of Federal Claims/BL Harbert International)

Harbert is part of a small group of U.S. contractors capable of building highly secure diplomatic facilities overseas – work that requires specialized security clearances, a vetted workforce and the ability to manage complex overseas construction and supply chains. According to the company, some State Department embassy projects now attract only two or three qualified bidders.

The dispute spans three presidential administrations, beginning with State Department directives issued during Trump’s first term in 2020, continuing as Harbert sought compensation under the Biden administration and culminating with the so-called settlement and its collapse during Trump’s second term.

At the start of the Covid-19 pandemic, Harbert was working on 17 embassy and consulate construction projects around the world, which at the time represented nearly two-thirds of the state’s embassy construction program, according to the lawsuit.

As countries shut down and global supply chains paralyzed in early 2020, Harbert says he sought advice from the state on whether to pause construction. The company says the pandemic constituted an “excusable delay” in its contracts that would have allowed it to send staff home, secure construction sites and return to work once conditions stabilized.

Instead, Harbert says the state decided to maintain its overseas construction program.

The company says the state has asked it to remain prepared to mobilize, continue to purchase and ship equipment and navigate disruptions, while requiring Harbert to document resulting costs and submit reimbursement requests.

In a March 2020 communication cited in the complaint, Harbert warned the state that it could not afford to continue paying workers to stay on hold without assurance of reimbursement. Labor costs for the new U.S. embassy in Guatemala City alone were about $1.3 million per month, according to the filing.

Former military personnel demonstrate in front of the American embassy in Guatemala City, June 26, 2024. (JOHAN ORDEREZ/AFP via Getty Images)

A few weeks later, the state ordered Harbert to “continue to procure and ship materials” so that projects would not end up “at the back of the line” when global construction activity resumed, the complaint claims. The state acknowledged that this could generate additional storage, shipping and other costs and ordered the company to submit requests for equitable adjustments as those costs arose, according to the filing.

The projects ultimately moved forward amid pandemic restrictions that Harbert said increased costs and reduced productivity as the company faced labor limitations, supply chain disruptions and new operational requirements.

The government has since taken ownership of the 12 diplomatic facilities at issue in the lawsuit and has been using some of them for more than three years, according to Harbert.

Harbert ultimately submitted more than $500 million in requests for equitable adjustments and other claims arising from pandemic-related directives and separate disputes related to the project, including alleged design changes and government-caused delays.

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Harbert claims that members of the State Department’s political leadership “inserted themselves into the process after a settlement was reached” and that, “based on information and belief,” the decision to abandon the agreement “came from above.”

Fox News Digital has contacted the State Department for comment.

With deadlines approaching to preserve its claims, Harbert says it officially certified them in March 2026. The complaint alleges that the state’s chief of staff encouraged the company to do so, saying certification would make it easier for the government to implement the settlement.

Instead, procurement officials began denying the allegations in July. As of October 13, 2026, the 13 certified claims currently at issue in the lawsuit had received a final decision.

This photo taken on May 21, 2026 shows a general view of the U.S. Embassy building in Ankara. (Getty Images)

Harbert is now seeking at least $461,097,380 in damages, as well as interest and other relief.

The lawsuit does not currently ask the court to enforce the purported $370 million settlement itself. Harbert says her settlement claims remain in the administrative process and she reserves the right to add them to the lawsuit at a later date.

The dispute could have consequences beyond the hundreds of millions of dollars at stake.

Harbert has been awarded about 60 U.S. embassy and consulate construction projects since 1999. The company says the number of U.S. contractors willing and qualified to take on such work has declined significantly, in some cases leaving only two or three qualified bidders for projects.

Embassy construction requires contractors to meet strict security and labor screening requirements while managing highly specialized construction, secure facilities and international logistics, creating significant hurdles for companies seeking to enter the field.

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Harbert says that if contractors lose confidence in the state’s ability to meet its obligations, fewer of them may be willing to take on the work, further reducing the government’s options for building secure diplomatic facilities abroad.