Companies Pay $1.3 Million to Resolve Allegations of False Claims Act Violations Concerning Small Business Size Representations

Marc H. Silverman, Acting United States Attorney for the District of Connecticut, today announced that Whitcraft LLC and Berkshire Manufactured Products, Inc. (collectively the “Whitcraft Companies”), have entered into a civil settlement agreement with the United States and have paid $1,317,653.44 to resolve allegations that they violated the False Claims Act when the Whitcraft Companies improperly obtained set-aside contracts reserved for small businesses that they were ineligible to receive.

Whitcraft LLC, a limited liability company located in Eastford, Connecticut, and Berkshire Manufactured Products, Inc., a corporation located in Newburyport, Massachusetts, machine and fabricate sheet metal aerospace parts and components for commercial and military aviation applications.  In April 2017, controlling interests in both companies were acquired by a private equity group.

The government contends that, after they were acquired in April 2017, the Whitcraft Companies ceased to qualify as “small business concerns” within the meaning of the Small Business Administration (“SBA”) regulations relating to government contracts due to the Whitcraft Companies’ affiliation through stock ownership with other businesses.  Between April 2017 and November 2022, the Whitcraft Companies falsely certified that they were “small business concerns” and, as a result, they were awarded 71 small business set-aside contracts that they were ineligible to receive.

Government contractors are required to timely disclose to the government, in writing, whenever they have credible evidence that they have committed a violation of the False Claims Act.  On December 23, 2022, in connection with due diligence performed relating to the Whitcraft Companies’ sale to another entity, the Whitcraft Companies voluntarily disclosed to the government facts concerning their potential affiliation with other businesses that the government contends made them ineligible to be awarded contracts set aside for small businesses. The Whitcraft Companies received credit in the settlement for their voluntary disclosure and cooperation with the government during its investigation.

This investigation was conducted by the Defense Criminal Investigative Service, the Defense Contract Audit Agency Operations Investigative Support Division, the SBA Office of General Counsel, and DLA Aviation Fraud Counsel.  This matter was handled by Assistant U.S. Attorney Sarah Gruber.