A senior official at the U.S. Department of Justice (“DOJ”) recently confirmed that the Antitrust Division has opened multiple grand jury investigations in connection with the Procurement Collusion Strike Force (“Strike Force”) formed in November of last year. Speaking at a conference on February 19, 2020, Deputy Assistant Attorney General (“DAAG”) Richard Powers said the Antitrust Division’s investment in the Strike Force “is already bearing fruit.”
On November 5, 2019, DOJ announced the establishment of a Strike Force designed to combat antitrust criminal violations—bid rigging, price fixing, and territory allocation—in the public procurement space. The Strike Force is a joint effort by the Antitrust Division, 13 U.S. Attorneys’ Offices, the Federal Bureau of Investigation, and Offices of Inspectors General from partner agencies and reflects DOJ’s increased scrutiny on government contractors in recent years. Earlier this month, DOJ announced the indictment of a Missouri man – the third individual to be charged – for participation in a conspiracy to rig bids submitted to the General Services Administration at online auctions for surplus government equipment. More than one third of the Antitrust Division’s open investigations relate to government procurement or other criminal conduct harming the government, and the Division cited to the activities of the Strike Force in its request for increased funding and additional attorneys for Fiscal Year 2021, which begins in October 2020.
DAAG Powers said DOJ’s focus on the public procurement space is driven by its importance to the U.S. economy. “When U.S. federal government discretionary spending (of taxpayer dollars) is in the neighborhood of $500 billion annually, we must make this a priority area on par with other large scale domestic and international cartel enforcement efforts focused on private sector spending,” he stated as part of his prepared remarks.
He also emphasized the deterrence mission of the Strike Force, saying, “The reality is that small and medium-sized businesses that are tempted to collude on government contracts or subcontracts are more likely to be deterred by wide-spread awareness of the illegality of bid rigging and active enforcement, which is why the Justice Department established the [Strike Force].”
DOJ’s increased focus on public procurement should serve as a reminder for all companies that supply goods or services to the government to assess their current antitrust training and compliance efforts as soon as possible. We recommend that all vendors to any federal, state, or local government agency ensure that their antitrust compliance programs are up-to-date and effective, a step which can prevent and lessen the impact of serious antitrust problems that arise. The risks of not doing so are significant: past companies who pleaded guilty to big rigging schemes harming the U.S. government paid hundreds of millions dollars in criminal fines and separate civil settlements with the DOJ.
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