In a case that began with information provided by a former employee turned whistleblower, two Utah construction companies have agreed to pay the federal government $1.2 million to resolve allegations they violated the terms of a program designed to help small, disadvantaged businesses.

Big-D Construction Corp., which is based in Salt Lake City, has already paid $1,062,900, and Creative Times Dayschool Inc. will pay $150,000 within the next few months, for a total of $1,212,900, the U.S. Attorney’s Office in Utah announced this week. Both companies have denied wrongdoing.

Whistleblower Bart Andersen — who worked at the two companies at different times and has admitted to stealing from Big-D while employed there — will get 15 to 25 percent of the recovery as a reward for uncovering the alleged violations. The percentage that Andersen, 48, will receive was not specified in publicly available records.

In 2010, Andersen pleaded guilty in Ogden’s 2nd District Court to two counts of communications fraud and one count of theft by deception, all second-degree felonies. He was ordered to pay approximately $145,000 plus interest in restitution to Big-D, where he had worked as a project manager, and he served about 14 months of a three-year jail sentence that included work release.

Charging documents to do not give details on how Andersen stole the money.

Under their settlement with the federal government, Big-D and Creative Times do not admit liability. Both companies maintained in separate news releases that they followed all requirements of a Small Business Administration (SBA) program and said they settled to avoid the cost of protracted litigation.

Big-D, which has more than 1,000 employees and describes itself as one of the largest construction organizations in the country, said the company is proud of its work helping small businesses to prosper and grow.

“We take our responsibilities as a corporate citizen and contractor very seriously and perform our work following complex guidelines with complete transparency,” the Big-D news release says. “We are proud to follow our core values every day we are in business.”

Creative Times said it has followed all laws and regulations “without deviation or alteration of any requirements.” The company has been in a disagreement for years with the federal government over the interpretation of Federal Acquisition Regulations System (FARS) rules regarding government procurement, its news release says.

“We are appalled by the wide divide in the interpretation of the guidelines and that they could be so far from the directional instructions provided in the FARS and by our legal counsel,” the release says.

The settlement stemmed from a 2011 whistleblower suit filed in U.S. District Court in Salt Lake City by Andersen, who was employed by Big-D as a project manager from 1999 to 2002 and again from 2006 to 2008, and by Creative Times from 2008 to 2010.

Andersen filed suit under provisions of the False Claims Act that lets citizens bring claims on behalf of themselves and the government and receive part of the recovery. The federal government decided to intervene in the case and, after the settlement was reached, the suit was dismissed by U.S. District Judge Clark Waddoups.

Big-D and Creative Times — which is based in Ogden and does business under multiple names, including Creative Times Inc. and CTI Construction — have been partners on construction projects for federal agencies, according to the suit.

Under a program managed by the U.S. Small Business Administration, some contracts for projects in distressed areas are set aside for “small business concerns” that meet certain size and other requirements. Creative Times qualifies for the program but Big-D does not, according to the suit.

The suit alleged that under an arrangement between the two businesses, Big-D “leased” its employees to Creative Times and did virtually all of the work to prepare a bid for a project. And when Creative Times was awarded a contract, Big-D allegedly did the work and the smaller company acted as a conduit, turning over funds to the bigger company once it was paid.

In announcing the settlement, the government said that under an agreement between the two companies, Big-D provided personnel who performed or substantially performed the work on a number of contracts for work in Utah, Kansas, Colorado and New Mexico between July 2009 and June 2013. Because of that arrangement, the government said, Creative Times failed to meet the SBA’s requirement that it do a certain percentage of the work — which, in turn, resulted in the submission of false or fraudulent claims for payments.

“These programs exist to help small business, often minority owned, to receive federal contracts,” U.S. Attorney for Utah John Huber said in a statement. “Those who apply for them must be honest and forthright in their dealings with the United States.”

Many of the documents in the case have been sealed based on a government request that says the papers contain “sensitive information about the United States’ investigation that was not intended to be publically disclosed.”