Two federal construction contractors and two principals have agreed to a $3.6-million settlement of alleged fraud related to millions of dollars in 8(a) designated small business construction contracts awarded by two U.S. military services and the U.S. Agriculture Dept.

In a Feb. 6 announcement, the U.S. Justice Dept.’s Colorado office said it reached the pact with VMJ Construction LLC, Brighton, Colo., and owner Michael T. Vigil, as well as with Vigil Contracting Inc., Crofton, Md., and John J. Vigil, its operations manager.

VMJ, launched in 2010 according to federal data site open-gov.us, was certified as an 8(a) federal contractor in 2011 and was set to graduate from the program for members of disadvantaged groups in 2020.

The firm specialized in commercial and industrial construction services like “masonry, sewage treatment facilities and carpentry,” says a Bloomberg listing.

Michael Vigil, who is Hispanic, was the 91% owner of VMJ, said the DOJ. John Vigil owned 9%. The agency did not explain the existence or nature of any family ties between the executives.

It said Vigil Contracting graduated from the 8(a) program in 2011 and was not eligible to bid on those designated contracts. Vigil Contracting’s website lists it as a 100% woman-owned firm and small disadvantaged business with 8(a) status. The firm also says it is certified as a minority business in Baltimore and by transportation agencies in Maryland and Virginia.

The U.S. contends that VMJ made false statements to the U.S. Small Business Administration linked to its 8(a) program eligibility. “Specifically, VMJ relied almost exclusively upon Vigil Contracting to bid on and complete” 8(a) work, and used that firm’s bonding, office space, employees and equipment, said the DOJ.

It said John Vigil and Vigil Contracting “made [VMJ’s] high-level business decisions” and that Michael Vigil did not run “day-to-day management.”

According to SBA annual reports to Congress for fiscal 2012 through 2014, obligated contract dollars listed for VMJ totalled about $14.23 million.

Vigil Contracting could not be reached for comment.