Novum Structures LLC, a glass space-frame maker in Menomonee Falls, Wisconsin, agreed to plead guilty and pay $3 million for using foreign materials on federally funded construction projects that required materials made in the USA, the Justice Department announced on Jan. 5, 2016.
What the company admitted
According to the criminal charge, Novum repackaged materials and falsified documents on some federally funded projects to hide that it was using foreign materials that did not meet the contracts’ domestic-sourcing rules. The company agreed to plead guilty to one count of concealing a material fact and pay a $500,000 criminal fine.
Civil settlement and debarment
- Novum also agreed to pay $2.5 million to resolve civil allegations under the False Claims Act covering projects from Jan. 1, 2004, through July 11, 2013.
- It agreed not to contest debarment from federally funded projects.
- The civil claims were first brought by whistleblower Brenda King, a former Novum employee, who was set to receive about $400,000. The case is United States ex rel. King v. Novum Structures, LLC, No. 12-cv-860 (E.D. Wis.).
The projects
The contracts covered government buildings and transit projects paid for partly with federal funds, under laws such as the Buy American Act, the Federal Transit Administration’s Buy America rule and the Recovery Act’s domestic-materials section. Reports named the U.S. Courthouse in Rockford, Illinois, a New Orleans streetcar expansion and the Miami Intermodal Center near Miami International Airport, where King’s lawsuit said Novum collected nearly $15 million. King’s attorney said Novum used cheaper goods made in China, and the National Law Review reported that the foreign materials came from China, Germany and Italy.
A Novum vice president said the company accepted “full responsibility,” that the problem related only to country of origin and not quality, and that noncompliant materials were less than 3% of the value of its work on covered projects.
Source & credit
Sources: U.S. Department of Justice, via GSA Office of Inspector General: “Wisconsin Architectural Firm to Plead Guilty and Pay $3 Million to Resolve Criminal and Civil Claims”, Jan. 5, 2016; DOT Office of Inspector General: investigation summary; The Real Deal: “Fake ‘Made in USA’ components used at Miami Intermodal”, Jan. 7, 2016.