On November 29, 2023, in the Eastern District of Virginia, Pavion Company (Pavion) agreed to pay $1.75 million to settle civil fraud allegations that it and its subsidiaries improperly obtained government contracts that were set-aside for small businesses.  

According to a Department of Justice press release, the United States alleged that Pavion ceased to qualify as a small business concern after its predecessor company was acquired in 2016 by the private equity firm Tower Arch Capital. The United States further alleged that, after its acquisition, Pavion, including two of its subsequently acquired subsidiaries, falsely certified themselves as qualified small businesses in the System for Award Management. Following its acquisition by Tower Arch Capital, Pavion and its subsidiaries were awarded 117 set-aside small business contracts across twenty different Federal agencies that they were ineligible to receive. 

Pavion’s management submitted a written contractor disclosure to the Department of Defense Office of Inspector General in August 2023. The disclosure explained that Pavion discovered its conduct during post-acquisition integration and consolidation activities and described the corrective actions that Pavion has taken to prevent future misrepresentations concerning its size. The resolution obtained in this matter was the result of a coordinated effort between several Federal agencies including TIGTA.

Source: The facts in this case narrative come from the following publicly available document: DOJ press release dated Dec. 7, 2023.