DOJ Announces Procurement Collusion Strike Force

08 November 2019 Legal News: Government Enforcement Defense & Investigations Publication
Authors: Lori A. Rubin Pamela L. Johnston Lisa M. Noller H. Holden Brooks Robert H. Hosay Byron J. McLain David T. Ralston Jr Jennifer Z. Belveal Scott L. Fredericksen Thomas F. Carlucci

On November 5, the Department of Justice (DOJ) Antitrust Division announced the establishment of the Procurement Collusion Strike Force (PCSF). The PCSF aims to deter, detect, investigate, and prosecute antitrust crimes and related criminal schemes that undermine the integrity of the government procurement process.

In remarks announcing the PCSF, Assistant Attorney General Makan Delrahim explained that criminal antitrust violations such as bid-rigging, price-fixing, and market allocation distort the free market and harm customers with high prices and lower quality goods and services. And, greater than one third of the Antitrust Division’s current open investigations relate to public procurement or otherwise involve harm to the government. Antitrust enforcement in the area of government contracting has been a priority of the Antitrust Division under Delrahim. In 2018, the Division resolved criminal charges and civil claims arising from a bid-rigging conspiracy that targeted fuel supply contracts to U.S. military bases in South Korea – the first government contracting-based antitrust enforcement action to be brought in decades.

PCSF will involve interagency cooperation amongst DOJ’s Antitrust Division, multiple U.S. Attorneys’ Offices across the country, the FBI, and four federal Offices of Inspector General. Features of the PCSF will include:

  • Training and education to federal, state, and local government procurement officials regarding how to identify warning signs of collusion, and to assist with structuring their acquisition process to remove vulnerabilities;

     

  • Training and education to government contractors, their trade associations, and public contract lawyers to educate them about criminal antitrust law;

     

  • Improving data analytics to identify red flags of collusion in government procurement data; and

     

  • Joint investigation and prosecution of potential criminal antitrust violations in the procurement area.

The PCSF’s website is already available here. The 13 inaugural partner U.S. Attorneys’ Offices are:

  • California, Central District (Los Angeles)
  • California, Eastern District (Sacramento)
  • Colorado (Denver)
  • District of Columbia (Washington, D.C.)
  • Florida, Southern District (Miami)
  • Georgia, Northern District (Atlanta)
  • Illinois, Northern District (Chicago)
  • Michigan, Eastern District (Detroit)
  • New York, Southern District
  • Ohio, Southern District (Columbus)
  • Pennsylvania, Eastern District (Philadelphia)
  • Texas, Northern District (Dallas)
  • Virginia, Eastern District (Alexandria)

DOJ has had success with other interagency strike forces such as the Health Care Fraud Strike Force, which has been responsible for thousands of charges, guilty pleas, and convictions since it was formed in 2006. The establishment of the PCSF indicates a prioritization of deterring and prosecuting procurement collusion by federal authorities.

While the PCSF is new, the investigation and prosecution of potential criminal antitrust violations, including in the area of procurement, are not. Foley’s antitrust and government enforcement defense experts are ably positioned to advise and defend, and to provide policies and training that can help minimize antitrust risk in this area. For more information about the Antitrust Division’s 2019 policy changes regarding corporate antitrust compliance programs, see Foley’s recent client guidance, “DOJ Antitrust Division Announces New Policy to Incentivize Corporate Compliance,” available here.

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