One of the US government’s largest private aid-delivery partners last month agreed to pay damages to more than a hundred African American job applicants for racial discrimination.

Chemonics International, one of the largest private development groups partnering with the US Agency for International Development (USAid), has agreed to pay $482,243 (£389,000) to job applicants who faced discrimination in the company’s hiring process.

A Department of Labor review of the hiring practices of Chemonics in 2011 found that its Regional Business Unit, which supports the company’s development work in Africa, Asia, Europe and Eurasia, Latin American, the Caribbean, and the Middle East, discriminated based on race when hiring for entry-level positions. Of the 124 African Americans who applied for jobs at Chemonics, none were hired.

The company agreed last month to pay back wages, interest and benefits to the applicants, but the terms of the settlement allow Chemonics to deny liability.

Jane Gotiangco, director of communications at Chemonics, attributes the pattern of discrimination to a manual application system that, she says, did not allow the firm to track diversity data. Chemonics has since upgraded the system and renewed its commitment to diversity, Gotiangco says.

Chemonics supports international economic development projects with USAid, including education, healthcare and agriculture programmes. It has been awarded some of largest aid contracts by the US government, from supporting the White Helmets in Syria to supplying medicine and health supplies around the globe.

In 2015, Chemonics received a contract of $9.5bn over eight years from USAid – the largest contract ever from the government agency Devex reports. Only one other contractor receives more USAid awards, the Partnership for Supply Chain Management, which is a conglomerate of 13 companies.

Chemonics has come in for criticism on other issues too. An audit of a $62m project it carried out in 2006 in Afghanistan found that the company “fell considerably short of intended results” and was followed up by the US press. Chemonics said that the reports “provided an incomplete picture”. In 2010, in the wake of the 2010 Haiti earthquake, Chemonics was awarded more than $196m to help rebuild the country, making it the largest recipient of post-earthquake funds from USAid. But just a few months later, auditors discovered [pdf] that the company had hired only one-third the number of Haitians it was supposed to.

“Winning federal contracts, paid for with US taxpayer dollars, is a privilege, not a right,” Patricia A Shiu, director of the Office of Federal Contract Compliance Programs (OFCCP), said in a statement. “With that privilege comes the obligation to practice equal employment opportunity towards all demographic groups of workers in this country.”

Joanna Hawkins, a representative for the Department of Labor, says that each company working with government agencies is evaluated on a neutral case-by-base basis.

“On the other hand,” she tells the Guardian, “the agency does believe this settlement will send a message to other contractors, including those working in the international development arena, that employment discrimination is unacceptable and will not be tolerated.”

The Department of Labor also found that Chemonics violated rules about maintaining required records and conducting internal audits, which the company has now agreed to fix.

In addition to paying the settlement, Chemonics will hire eight of the applicants who previously did not get jobs.