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A business deal brokered more than 10 years ago during a clandestine meeting at an Italian restaurant in Hawaii Kai has set the stage for a bitter legal dispute that today embroils a Honolulu rail contractor in allegations of fraud, deception and profiteering.
The legal skirmish centers on a disintegrating business partnership between Su-Mo Builders, an obscure construction company located in Kalihi with about 20 employees, and Nan Inc., a well-known Hawaii corporation recently awarded its second multimillion-dollar contract for work along the city’s 20-mile elevated commuter rail line.
It’s a messy confrontation being played out in two different courtrooms with the warring parties accusing each other of lying, cheating, self-dealing, cooking the books, shortchanging subcontractors and attempting to deceive the federal government in obtaining millions of dollars in contracts.
The accusations have illuminated the often murky, complex and profitable world of the U.S. Small Business Administration’s 8(a) Business Development Program for small, economically disadvantaged companies predominantly owned by women and minorities.
The program allows for the awarding of no-bid federal contracts and other preferential treatment and enables small firms to form joint ventures with bigger, more established companies to bid on even larger contracts.
Nan became a construction giant through participation in the 8(a) and other SBA programs. Although it ended its participation — or “graduated” — as an 8(a) contractor in 2004, the company continued to reap 8(a) benefits through a mentoring agreement and several joint ventures with Su-Mo Builders. How this relationship allegedly was manipulated is a central element of the state litigation.
Since Nan began its contracting business as Ocean House Builders more than 20 years ago, the company, its owner Patrick Shin, his relatives and affiliated corporations have received at least $636 million in military contracts. Nan collected $144.8 million of that while it was an 8(a) participant itself and another $262 million was raked in through partnerships with Su-Mo, a company owned by former Nan employee Su Yong Yi.
But Nan’s contracting activity hasn’t been limited to military work. The company has become a player in the construction of Honolulu’s rail system, at $6 billion the largest public works project in state history.
Last month the company was awarded a $56 million contract from the Honolulu Authority for Rapid Transportation to build three west Oahu rail stations. Nan won the contract with a bid $10 million less than that of its nearest competitor and almost $25 million below what HART had estimated the cost would be.
“This case involves a large company abusing a smaller company for financial gain. It is a story about greed.”
A year ago Nan received a $27.3 million contract for rail-related airport utilities construction work. And in March the company unsuccessfully bid on a contract to build three other stations, ultimately losing a protest of that contract award to Hawaiian Dredging Construction Co.
But documents filed as part of the ongoing litigation provide the public with an inside look at the convoluted legal wrangling simultaneously playing out in both state and federal courts. As Su-Mo’s attorneys put it: “This case involves a large company abusing a smaller company for financial gain. It is a story about greed.”
The unfolding drama that began more than a decade ago has been captured in volumes of court records accumulated since protagonists Yi and Shin began their legal theatrics last year. Civil Beat reviewed hundreds of documents to tell this story of shattered friendships and a business partnership gone bad, where millions of dollars and reputations are at stake.
The curtain rises on a table at the popular Assaggio restaurant on the waterfront of Koko Marina in Hawaii Kai. At the time, in 2004, Su Yong Yi was the president of Su-Mo Builders. He was an up-and-coming contractor when he says he met Nan’s Patrick Shin for an Italian dinner.
The two contractors were there to discuss a possible business partnership, but Shin, also known as Nan Chul Shin, asked Yi to keep quiet and not tell anybody about the meeting, Yi says.
Shin was a convicted felon. He had recently been caught manipulating government bid documents, and as part of his plea deal had been banned from conducting any business on behalf of his company.
Yi says Shin told him of a plan that, if executed properly, could reap millions of dollars in federal contracts for the both of them.
Not long before, Yi had been working odd jobs that paid him anywhere from $500 to $10,000. He’d also had a regular gig with the Hyatt Regency Resort and Spa in Waikiki in which he painted and fixed broken ceramic tiles.
A partnership with Nan, Yi believed, would bolster his bottom line and grow his young business into a highly profitable venture.
They signed a deal in 2006 that Nan’s president, Fooney Freestone, helped make possible. Freestone, a childhood acquaintance of Yi, had taken over for Shin after his conviction, and was a driving force behind the joint venture between Nan and Su-Mo Builders.
Shin declined to comment to Civil Beat about the case when contacted by phone, and abruptly hung up. Freestone also did not respond to repeated requests for comment.
Their attorney, Samuel King, denied that the meeting — described in Yi’s sworn court statement — ever took place. He also said Su-Mo’s allegations in the lawsuit are “ridiculous.”
“That whole counterclaim they filed is a bunch of nonsense,” King said. “None of it’s true.”
But whatever occurred, over the next several years the joint ventures created by Nan and Su-Mo pulled in nearly $263 million in military contracts.
That gravy train derailed almost three years ago when internal bickering over financial matters ended the 8(a) relationship, but not the quarreling over money generated by nine contracts encompassing about 200 separate projects at military installations in Hawaii.
The continuing dispute finally ended up in state court and soon spilled over into federal court where Nan and Su-Mo were sued by Liberty Mutual Insurance Co., one of the nation’s largest insurers, seeking reimbursement of payments made to subcontractors for work at Tripler Army Medical Center, a project at the heart of both state and federal lawsuits.
Those subcontractors said they had been stiffed by the joint venture and sought compensation under an insurance policy guaranteeing all project costs would be paid.
From 2006 to 2012 Nan and Su-Mo were parties to an SBA-approved mentor-protégé agreement that establishes ground rules by which larger, successful firms provide technical, financial and management support to disadvantaged companies participating in the 8(a) program. The goal is for the smaller companies to eventually become self-sustaining major contractors.
One critical form of assistance provided to a small contractor is the benefit of its “mentor” company’s much greater bonding capacity – the ability to obtain financial guarantees that contractors will perform the work they are required to do.
These guarantees are essential to obtaining contracts. With a bonding capacity estimated at $200 million, Nan’s participation in Su-Mo contracts was crucial and gave Nan considerable leverage over its smaller partner.
As the contracts and work orders poured in, court documents indicate the business relationship soon began to fray and bitter internal bickering ensued.
As part of the mentoring arrangement the companies formed several joint ventures that obtained dozens of military contracts, the most recent in 2011 for construction work at Tripler.
Under terms of the joint ventures, Su-Mo would hold a 51 percent controlling interest, as required by the SBA, and manage the partnerships subject to decisions made by a committee composed of representatives from both partner companies.
Su-Mo would collect 51 percent of the profits and be responsible for that same percentage of expenses and losses. SBA rules required Su-Mo or its subcontractors to perform at least 51 percent of the actual work on any contract.
Federal regulations limit participation in the 8(a) program to a maximum period of nine years, and SBA records show Su-Mo “graduated” in May 2013, a year after its mentor agreement with Nan was terminated. However, the dispute over money continued to simmer for two years before the companies ended up in court.
Nan threw the first legal punch last September when it sued in state court seeking a corporate divorce — or “dissociation,” in legalese — from Su-Mo.
Nan asked the court to officially sever its relationship with Su-Mo and the joint ventures in which the two firms were involved, alleging among other things that Su-Mo had engaged in “reckless or intentional misconduct” by failing to pay subcontractors and suppliers and by fraudulently transferring assets from at least one of the partnerships.
Court documents suggest Nan’s action may have been a preemptive move in anticipation of the Liberty Mutual lawsuit over subcontractor payments in federal court.
Nan complained that in 2013 Su-Mo failed to pay subcontractors on the Tripler project, requiring Nan to come up with nearly $1 million for those bills and other Su-Mo debts, payments Nan said were necessary to avoid cancellation of performance bonds.
Nan said the money was a loan which has not been repaid. Not only had Su-Mo welched on the obligation, but during 2014 Nan claimed Su-Mo secretly wrote $1.68 million in checks to itself from the partnership’s special account.
Su-Mo denied the allegations, saying it was the victim and portraying itself as a small, naive contractor seduced into becoming a front man by Shin and Freestone as part of a scheme permitting Nan’s continued participation in profitable 8(a) contracts that Nan would have been prohibited from obtaining on its own.
In fact, Su-Mo claimed, while it might have appeared on paper to be managing the joint ventures to satisfy SBA regulations, Shin was actually calling the shots and had been from the beginning.
The SBA rejected the initial application for a mentoring agreement. But following a phone call from Yi, the agency reconsidered and approved the Nan/Su-Mo relationship in September 2006. Within two weeks the companies had formed the first of three joint ventures that received more than nine prime military contracts for hundreds of small projects over the next six years.
Yet, as the contracts and work orders poured in, court documents indicate the business relationship soon began to fray and bitter internal bickering ensued.
However, Nan’s 2012 correspondence to the SBA abruptly terminating the mentor-protege agreement seemed to belie the simmering internal problems between the two companies. The issues virtually all boiled down to money and how it was divvied up.
Those problems were outlined in detail last October in a lengthy letter Yi sent to the SBA a month after Nan’s lawsuit was filed.
The letter itself and the allegations it contained prompted an immediate and vehement response from Nan attorneys who attempted to have the document removed from court files, arguing that it was inflammatory, prejudicial and had been submitted to the court solely to “confuse the issues.”
Writing to an official in the SBA Honolulu office, Yi said statements in the mentor-protege termination letter were false — that Nan did not provide necessary training and refused to provide performance bonds unless Su-Mo agreed to changes in the joint venture agreements that enriched Nan.
But Yi didn’t stop there, laying out a litany of allegations he claimed were clear indications that his company had been a patsy, enticed into a relationship which Nan used “for the sole purpose of taking advantage of Sumo and allowing Nan to participate on a continuing and fictitious basis in SBA 8(a) projects.”
According to the letter:
One of those methods, Yi said, was Nan’s creation of a category of payments Su-Mo was required to make toward Nan’s overhead costs based upon a percentage of gross contract revenues. Those expenses included advertising, auto expenses, meals and entertainment, travel, utilities, rent, property taxes and even the state general excise tax.
Yi claimed the joint venture agreements did not provide for such expense payments nor were such payments ever approved by the SBA. Nevertheless, he said, Su-Mo was forced to pay Nan more than $2.8 million in reimbursements.
Another technique Shin used to exploit the program at Su-Mo’s expense, according to Yi, was the way Nan parceled out contracts – keeping the most lucrative for itself and subcontracting some of the work to Su-Mo, something Yi claimed violated both the partnership agreements and SBA regulations.
“That whole counterclaim they filed is a bunch of nonsense. None of it’s true.” — Samuel King, attorney for Nan
For example, Yi said one joint venture receiving three contracts involving 131 individual projects was manipulated in a way that Nan kept projects valued at $42.5 million for itself and gave Su-Mo contracts worth $22.4 million. This, Yi claimed, violated the 51-49 percent split required by SBA regulations. When Yi complained, he said Shin told him “he would take care of the SBA and that Su-Mo was not under any circumstances” to tell the SBA anything.
On another occasion involving $45.6 million in contracts, Yi said Nan at first demanded a 60 percent share of the action until it decided the contracts would be unprofitable. Suddenly, Yi said, Shin changed his mind, insisting on the 51-49 percent split contained in the partnership agreement.
But Nan’s alleged manipulation wasn’t limited to the Nan/Su-Mo joint venture contracts, Yi said.
In 2009 Su-Mo was awarded a contract for work on a Child Development Center at Schofield Barracks. The project was a set-aside solely for 8(a) participants that Nan could not have bid on itself. So, Yi said, Nan drafted a contract proposal that was submitted in Su-Mo’s name.
According to Yi, after Su-Mo received the $10.3 million contract, Shin told him that Nan wanted to do all of the work and would pay Su-Mo $250,000 for the privilege. Yi said Nan structured the deal so Su-Mo would remain the prime contractor on documents submitted to the government, but actually subcontract all of the work to Nan for $10 million, collecting its money from the difference between what the military paid Su-Mo and what Su-Mo paid Nan as the subcontractor.
Yi characterized Nan’s legal action as a vindictive attempt to destroy Su-Mo, telling the SBA: “After taking the cream of the projects and the lion’s share of the profits contrary to the terms of the joint venture agreements, Nan now seeks to wipe out Sumo by filing a lawsuit.”
Shin’s lawyers asked Circuit Court Judge Virginia Crandall to remove the letter from court files.
“The statements contained in (the letter) regarding Nan and Patrick Shin are false and libelous,” submitted “for the sole purpose of embarrassing and harassing” Shin and his company “and exposing them to public ridicule and scorn,” Shin’s attorney argued, accusing Su-Mo attorneys of abusing a long-held legal doctrine of judicial immunity for anything said in court proceedings and saying the letter was not evidence.
Yet at the same time Shin’s attorneys were seeking to discredit the letter, they used parts of it to turn the tables in support of Nan’s lawsuit, saying the letter was a public confession by Yi and Su-Mo executive Sam Ho — whose name also appeared on the letter — of their “guilt for making criminal misrepresentations and to defrauding the SBA.”
To avoid repaying the money Nan claims it was owed, Shin’s attorney said lawyers for “two publicly self-confessed liars” are seeking damages from Nan by alleging Shin and his company were the ones who violated SBA rules.
The letter remains in both the state and federal court files.
Meanwhile, Su-Mo has hired criminal defense attorney Richard Sing, who did not return multiple phone calls seeking comment.
A spokeswoman at SBA headquarters in Washington, D.C., confirmed Su-Mo’s letter had been received and forwarded to the agency’s Inspector General, who is responsible for investigating wrongdoing in SBA programs. However, a spokesman for the Inspector General told Civil Beat in an email that he could not discuss the matter or even confirm Yi’s letter had been forwarded to his office.
Last week, Nan’s attorneys again asked Judge Crandall to dismiss the bulk of Su-Mo’s claims in its countersuit, arguing that the state court did not have jurisdiction over matters involving a federal agency, and specifically challenging Su-Mo claims that Nan had skimmed more than its fair share of profits. Nan contended that changes in SBA regulations and amendments to the joint venture agreements invalidated the original percentages of profit-sharing.
A hearing on Nan’s request is scheduled for Sept. 2.
Last November, just as the legal bickering was heating up in state court, insurance giant Liberty Mutual sued Nan, Su-Mo, and one of their joint ventures, along with several individuals, including Shin and Yi, in U.S. District Court alleging they breached an agreement to reimburse the insurance company for more than $1.6 million it paid to 13 subcontractors submitting claims for unpaid work on the Tripler project.
At the core of the suit is a “general agreement of indemnity,” a contract between insurance companies and contractors required before an insurance company will issue performance bonds for specific construction projects.
The bonds are insurance policies of sorts in which an insurance company – or surety in industry parlance – guarantees a prime contractor will complete the required work and pay for all materials and subcontracted labor. The indemnity agreement requires prime contractors and any others signing the agreement to reimburse the insurance company for any claims it pays.
Surety bonds are a lucrative business: Liberty Mutual is the second largest surety bond underwriter in the U.S., generating more than $800 million in premiums last year. The premium for the $16 million Su-Mo/Nan Tripler project bond was $85,000.
Liberty Mutual claimed all of the defendants were collectively liable for repaying the $1.6 million disbursed to Tripler subcontractors under provisions of an agreement signed by Nan in 2003 and amended over the years to add or remove companies and individuals for specific projects.
|O&E Matias Electrical Service LLC||$647,705|
|Allied Pacific Builders||$323,859|
|Tu’s Plumbing & Contracting||$153,530|
|Tab Engineering LLC||$93,500|
|Hirota Painting Co.||$65,429|
|Air Balance Hawaii Inc.||$45,283|
|Aloha Steel Corp.||$31,680|
|Pacific SBS LLC||$28,455|
|Mason Architects Inc.||$14,960|
|JBL Hawaii LTD||$7,230|
|Martin & Chock Inc.||$7,198|
|Shigemur, Lau, Sakanashi, Higuchi & Associates||$7,031|
The insurance company also sought an injunction prohibiting any of the defendants from attempting to move assets, saying it believed the Su-Mo/Nan joint venture and the others would try to dodge their obligations by “transferring or liquidating assets.”
Nan responded to the lawsuit saying it had agreed to pay the performance bond premium on behalf of the Su-Mo/Nan partnership but did so only on the condition Su-Mo and its officers would be parties to the agreement, something Nan claimed had not occurred.
Nan countersued, accusing Liberty Mutual of misrepresenting Nan’s responsibility under the agreement and seeking damages. Nan countersued Su-Mo at the same time, asking that it be required to pay the bulk of any amount Liberty Mutual might ultimately receive if it won the case.
Su-Mo argued it had no responsibility to pay anything because it had no direct dealings with the insurer, claiming the indemnity agreement and amendments were negotiated solely between Nan and the insurance company. Su-Mo also countersued Liberty Mutual alleging the insurance giant was attempting to hobble Su-Mo assets and jeopardize the construction company’s “ability to continue its business.”
Although most of the claims made by Nan and Su-Mo were dismissed, federal Judge Derrick Watson gave the companies additional time to submit amended allegations against Liberty Mutual. Those documents were filed last month and the federal court trial is scheduled for next February.
Before he ever partnered with Su-Mo, Shin’s attraction to the profit potential of 8(a) contracting had landed him in jail – all because he used a bottle of white-out to alter numbers on a subcontractor’s bid during negotiations for a Navy contract to repair dry dock equipment at the Pearl Harbor Naval Shipyard.
In 2004, Shin pleaded guilty to a federal felony charge of making false statements to the Navy. His co-defendant, JHL Construction, a firm owned by his nephew, James H. Lee, pleaded guilty as a corporation to knowing documents submitted to the Navy were false.
It is just another example of how 8(a) contract bidding can be manipulated – and in this case falsified – to increase profits for companies obtaining special treatment in obtaining contracts, yet farming out much of the actual work to others and making money on the spread between what they pay subcontractors and what they charge the government.
The criminal charges stemmed from what federal prosecutors described as a “crime of elaborate deceit” designed to boost JHL profits and conceal from the Navy manipulations of a previous contract for virtually identical work.
When the offense occurred in 2003, JHL had an agreement with the Navy permitting direct negotiations for certain types of contracts exempt from normal government bidding requirements. At the time JHL was bidding on the Navy contracts Nan and JHL were parties to an SBA mentor-protege agreement and Shin, according to federal prosecutors, was intimately involved with JHL operations.
The criminal charges stemmed from what federal prosecutors described as a “crime of elaborate deceit” designed to boost JHL profits and conceal from the Navy manipulations of a previous contract for virtually identical work.
In 2002 JHL received a $2.35 million no-bid contract to repair a pump in one of the Navy’s Pearl Harbor dry docks. The contract amount was based on initial subcontractor pricing used to support the JHL proposal. However, after the contract was awarded, JHL negotiated a much lower price with another company and switched subcontractors, substantially reducing costs and increasing its profit.
A year later JHL was asked to submit a second proposal for identical pump repair work at an adjacent dry dock. This time the company submitted a $2.36 million bid. After naval officials questioned the bid amount and asked for documents supporting the second bid, JHL quickly lowered its price to $2.2 million but didn’t provide the requested paperwork.
When the Navy continued to insist on documentation for the second bid, prosecutors said, Shin convinced two subcontractors to provide inflated bids. One subcontractor went along; the second apparently didn’t move fast enough for Shin, who then whited-out numbers on documents from a previous bid, altering the amounts to increase the total contract price by $380,000.
Prosecutors said JHL then submitted the documents doctored by Shin, knowing they contained false information.
One of the subcontractors called the FBI.
According to the FBI report of an interview with Shin on Sept. 7, 2003 — the day agents raided Nan’s office — Shin admitted he’d falsified bid documents, saying he felt it was necessary because the first bid in 2002 had been substantially inflated and if the second bid had been accurately priced the Navy would have seen how low his true costs were on both contracts and questioned the profit margin.
Federal agents said Shin told them he falsified documents because in his opinion the Navy used a flawed contracting process that made it impossible to make a profit without lying.
When Shin pleaded guilty in 2004 he was barred from involvement with Nan for three years, and pursuant to an agreement with the Department to Defense was prohibited from any connection with military contracting whatsoever for five years from the date of his sentencing.
But full sentencing in the case dragged out for two years, until March 2006, when Shin was sentenced to 12 days in jail served on weekends, fined $100,000 and placed on probation for three years – a term ultimately reduced to 31 months. JHL was fined $3,000.
Asking for a lenient sentence, Shin’s attorney argued that Shin never intended to “defraud” the government, that his actions were simply “bad practice.” Shin’s actions, his attorney said, were merely a “good intentioned intent to deceive” and didn’t involve an intent to defraud. In fact, Shin’s attorney claimed that the Navy’s engineer involved in the negotiations “made up a story which has no basis in fact to try to make (Shin’s) actions appear fraudulent.
Shin, his attorney said, was the epitome of the American Dream — born in a one-bedroom mud hut in Buyea, South Korea, and raised in the “grinding poverty of peasant farm life” until his family was able to move to the United States, where he graduated from Bowling Green University and worked in his brother’s New York fish business before launching his own Hawaii construction company.
Shin “spent 15 years of his business and professional life serving the government, not defrauding” it, said his attorney. He described Shin as no “easy chair” contractor but a person actively involved in all of his company’s operations, including actually going out to job sites.
Moreover, Shin’s attorney argued that JHL was doing the government “a favor by taking on a risky job at the last minute” so the Navy wouldn’t lose allocated funding because the federal fiscal year was coming to an end.
Successfully arguing for early release from probation in 2008, Shin’s attorney said his client had complied with all conditions of his plea agreement and probation up to that point, including placing his Nan stock in a trust and avoiding all contact with his company for three years.
The company could be heavily penalized should a judge or the SBA believe the allegations made by Su-Mo’s attorneys, and not just by the federal government.
Although Shin had resumed active involvement with Nan by 2007, Shin’s attorney told a federal judge his client was “scrupulously honoring” the continuing prohibition of being connected to any Defense Department contracts until March 2011, reiterating that Shin’s conviction resulted from his acting “only in the face of inappropriate activity by the government contracting officers (that) denied JHL its profit and overhead.”
In fact, according to Shin’s attorney, the federal probation division had concluded the proposed Navy contract price was “fair and reasonable.” Shin requested that his probation report be made public, but both his plea agreement and the report remain sealed.
Meanwhile, Nan has continued to profit handsomely off of government contracts. The company is one of the largest general contractors in the state. Honolulu’s rail project has only added to the revenue stream.
Officials from the Honolulu Authority for Rapid Transportation refused to answer questions about Nan’s ongoing litigation or past problems despite having more than $83 million worth of taxpayer-funded contracts for work on the $6 billion commuter rail line.
The agency did not make anyone available for an interview with Civil Beat to discuss the lawsuits or how they might influence the company’s relationship with HART.
Instead, HART representatives sent an email saying the agency is required to check whether companies have been suspended or banned from conducting business with the state or federal government and that it also verifies that contractors vying for rail work meet minimum insurance and business registration requirements.
The agency also says that it has asked certain bidders to provide more information about various legal claims and contract disputes. But HART’s email also said the agency “cannot disqualify a potential bidder or offeror outside the checks allowed under the Hawaii Procurement Code and under federal law without justification.”
That doesn’t mean Nan is in the clear, however. The company could be heavily penalized should a judge or the SBA believe the allegations made by Su-Mo’s attorneys, and not just by the federal government.
Sarah Allen, the top administrator for the Hawaii Procurement Office, says that companies caught defrauding the government or otherwise manipulating the bidding process to get taxpayer-backed contracts can be suspended and even barred from conducting future business in the state for up to three years under current statutes. Embezzlement, theft, forgery and other criminal convictions can also lead to debarment.
The law says that these sanctions should only be imposed to protect the government in the public’s interest and not as a form of punishment.
Today there’s only one company, Pacific Landmark Group, that’s on the state procurement office’s debarment list. Several other contractors have been suspended for incidents such as failing to pay back wages, falsifying records and delaying investigations.
Allen says a lawsuit alone isn’t enough to meet the threshold for suspension or debarment under state laws. Once a case is settled, however, the state can make a determination on possible sanctions.
“If there’s a court case ensuing and there’s no judgment there’s nothing we can do,” Allen said. “Once a judgment is entered it certainly could add to the evidentiary documentation that (a contractor) is a bad apple or bad actor.”
She added that most government procurement officers try to do a reasonable amount of background research on companies before awarding contracts. Agencies can even require bidders to provide information about past and ongoing legal disputes to get a better view of possible red flags.
But she said there’s no “magic database” that will catch everything.
“There’s just no way to find out all of this information with the limited resources that we have,” Allen said.
And despite courtroom combat over the failed relationship with Su-Mo, the problems with Liberty Mutual and Shin’s past felony conviction, Nan seemingly can’t stay away from the 8(a) program.
At the same time Nan was preparing bids for Honolulu rail station contracts in January, the SBA approved a new mentor-protégé agreement between Nan and Aulii Construction Inc. of Kaneohe.
In March the companies formed Hawaii Pacific JV LLC, a joint venture to pursue unspecified contracts. The SBA says terms of the mentoring agreement are confidential.