Mercer-Fraser Vice President Justin Zabel said Mercer-Fraser's annual receipts totaled less than $27.5 million, qualifying it as a small business.
maintains that the SBA had already been made aware of the affiliations, and even after submitting the clarification, Mercer-Fraser was approved for HUBZone status.
The complaint also alleges that Mercer-Fraser improperly identified itself under the North American Industry Classification System as "Construction Sand and Gravel Mining," rather than "General and Heavy Construction."
The primary difference between the two is that the industry size standard for "Construction Sand and Gravel Mining" is limited to companies with less than 500 employees, and does not account for revenue.
said the company used that code because the online application process prompted it to do so after a series of questions.
The SBA acceptance letter to Contri Construction and Mercer-Fraser states that the company not only qualifies under "Construction Sand and Gravel Mining," but can also be awarded contracts under other industry classification codes for which it qualifies.
made all these points during mediation, but was told that the company is ultimately responsible for verifying the accuracy of the application.
said the decision to settle was a business decision, weighing the $1.3 million against the potential cost of litigation.
said the settlement agreement was some $20 million less than what was originally sought, and no convictions or penalties to Mercer-Fraser resulted.
cited Mann's personal stake -- 15 percent of the settlement -- in pursuing the lawsuit.