Feds: CT companies to pay $5.2M for false small business claim

Firms include company based in Orange

A group of Connecticut companies have agreed to pay $5.2 million after obtaining several contracts reserved for small businesses that it was ineligible to receive, according to federal prosecutors.

The civil settlement agreement resolved allegations that Numet Machining Techniques, LLC; Numet Industries, Inc.; KCO Numet, Inc; and Kidd & Company, LLC violated the false claims act, according to U.S. Attorney Vanessa Roberts Avery.

Numet Machining Techniques, a limited liability company based in Orange, manufactures and provides aerospace engine components for the U.S. military and commercial purchases. The company was acquired by Numet Industries, Inc. in August 2011. Avery’s office said Numet Industries was owned by KCO Numet, which was ultimately owned by individuals associated with Kidd & Company, LLC, a family office investment company in Greenwich.

After Numet’s acquisition, Avery’s office said it ceased to qualify as a small business as it was affiliated through stock ownership with other businesses. This meant that the company could not qualify as a “small business concern” within the Small Business Administration’s regulations relating to government contracts, according to Avery’s office.

Still, between August 2011 and February 2016, Numet falsely claimed that it was a small business and received 22 contracts that were supposed to go to small businesses, Avery’s office said.

Additionally, from September 2013 to February 2016, Numet falsely claimed it was a women-owned small business, according to Avery’s office.

Avery said she will hold government contractors accountable for such claims.

“We thank our investigative partners for their efforts on this case and their ongoing work to protect government programs that exist to assist small or disadvantaged companies,” she said.

Special Agent in Charge William Richards, of the Air Force Office of Special Investigations, said law enforcement and other investigating partners will continue to combat similar fraud.

“Contractor abuse of government set-aside programs not only undermines the federal acquisition process, but also harms the legitimate small businesses these programs are intended to support,” Richards added.

Government contractors are required to disclose to the government whenever they have violated the False Claims Act. On November 4, 2019, in connection with due diligence performed relating to Numet’s sale to another entity, Numet voluntarily disclosed to the government its potential affiliation with other businesses that made it ineligible to be awarded small business contracts. Avery’s office said the Numet companies received credit in the settlement for their voluntary disclosure and cooperation.

Ned Gerard / Hearst Connecticut Media The federal courthouse in Bridgeport. A group of Connecticut companies agreed to pay $5.2 million after obtaining several contracts reserved for small businesses they were not eligible to receive, officials said.