On January 12, 2022, the U.S. Attorney’s Office for the District of Colorado announced a $1.15 million civil settlement in a case implicating misuse of the Small Business Administration’s (SBA) Mentor-Protégé Program. The settlement is to be partially paid by both the SBA-approved mentor and protégé relating to conduct associated with winning and performing two set-aside awards.
Native American Services Corp. (NASCO) was the mentor to Mirador Enterprises, Inc. (Mirador), a small business and participant in the SBA’s 8(a) Program. The contracts at issue in this settlement were two Army set-asides for construction projects at Fort Carson—one set-aside for small businesses and one for 8(a) participants. At the time that Mirador submitted offers as a prime contractor for each of these procurements, Mirador qualified both as a small business and as an 8(a).
The problem, as alleged by DOJ, was that NASCO prepared the bids with the intent that NASCO would primarily perform the contracts. DOJ further alleged that, after the Army made award to Mirador, NASCO took the lead in the performance of these two contracts and provided assistance that far exceeded what was permitted under the Mentor-Protégé relationship.
Once the government raised concerns about NASCO’s “improper level of involvement,” the parties purportedly doubled down and took steps to conceal how they were actually performing. As laid out in DOJ’s press release:
- The parties tried to make it appear that NASCO was transferring employees to Mirador, but these employees remained under NASCO’s control;
- NASCO provided information to Mirador employees to make them appear more involved or knowledgeable about the contracts than they actually were; and
- NASCO drafted correspondence for Mirador’s signature, to be submitted to the government.
Of the $1.15 million civil settlement, NASCO will pay $750,000 and Mirador $400,000.
There are two takeaways from this settlement.