A Menomonee Falls-based architectural firm has agreed to enter a guilty plea and pay $3 million to resolve claims it failed to follow “Buy American” requirements on federal projects.
According to court documents, Novum Structures LLC , which specializes in the design and construction of glass space frames used in roofs and atrium enclosures obtained federal contracts on projects with a total value of $30 million between 2007 and 2013. The projects included the Miami Intermodal Center, the Morgan Street Elevated Station in Chicago, the U.S. Capital Visitor Center, the VA Medical Center in Paulo Alto, Calif., and several others.
Court documents indicate the company concealed the fact that it was using materials in projects, including steel and other materials produced in China, by removing labeling that reflected the country of origin from the materials and its packaging.
The company also had foreign materials shipped to its Menomonee Falls headquarters to repackage it and remove the labeling. The court documents say the company created a fictitious designation of “Eastern Idaho” in internal records to refer to non-compliant steel materials intended for projects requiring compliance Buy American provisions.
"As is made clear by the settlement, we take this matter very seriously and accept full responsibility for our actions," Travis Loften, Novum's vice president for global finance and U.S. operations, said in a statement. "We have also improved our internal procedures to ensure Novum will fully comply with contractual requirements going forward."
Loften noted that the noncompliance issues were specifically with the country of origin and the company had taken steps to address the issues, including replacing materials with complaint counterparts.
"At no time was there an issue with the quality of materials used," Loften said.
He added that the Buy American requirement applies to a small part of Novum's business and the non-compliant materials used represented less than 3 percent of the value of work on the projects in question.
As part of the settlement agreement, Novum has agreed not to contest debarment from federally funded projects. The company has also agreed to pay a $500,000 criminal penalty and $2.5 million to resolve a civil suit. The suit was originally brought by Brenda King, a whistleblower. King will receive approximately $400,000 from the civil settlement.
“Domestic preference statutes are designed to promote American businesses and to protect U.S. economic interests,” said acting U.S. Attorney Gregory J. Haanstad for the Eastern District of Wisconsin. “When companies subvert those interests by violating ‘Buy American’ provisions – and when they undertake efforts to conceal that they have done so – all in an effort to improperly advance their own private financial interests, the U.S. Attorney’s Office will pursue all appropriate criminal and civil sanctions.”