On November 5, 2019 the Antitrust Division of the Department of Justice announced the formation of a new Procurement Collusion Strike Force (PCSF) aimed at deterring, investigating and prosecuting antitrust crimes that undermine competition in government procurement, grant and program funding. The PCSF is an interagency partnership consisting of prosecutors from the Antitrust Division and 13 U.S. Attorney’s Offices, including the United States Attorneys’ Office for the Eastern District of Michigan.
In addition to identifying, investigating and prosecuting incidents of antitrust crimes, such as bid-rigging conspiracies and related fraudulent schemes, the PCSF will conduct outreach and training for federal, state and local procurement officials to recognize and report suspicious conduct in the procurement, grant and program funding processes.
The creation of the PCSF is further evidence of the Trump administration’s focus on targeting fraud and abuse of the procurement process. In November 2018, the Antitrust Division announced that it would use the antitrust laws to seek civil damages where the federal government is overcharged as a result of anticompetitive conduct. Since that announcement, five South Korean oil companies have agreed to plead guilty to their involvement in a decades-long bid-rigging conspiracy related to contracts to supply fuel to U.S. military bases in South Korea. In addition, they have agreed to pay $156 million in criminal fines and over $205 million in separate civil settlements. In establishing the PCSF, the Antitrust Division seeks to increase awareness of the antitrust risks inherent in the procurement process among other federal, state and local officials that is likely to result in increased investigations and prosecutions of government contractors and vendors at all levels of government.
The creation of the PCSF highlights the need for companies that serve or are interested in serving as government contractors or vendors at the federal, state and local level to review their antitrust compliance programs to ensure they will stand up to this increased scrutiny and to DOJ guidelines for effective antitrust compliance programs. With the U.S. Attorney’s Office for the Eastern District of Michigan’s participation in the PCSF, Michigan-based businesses will likely be subject to more scrutiny as part of this campaign.
Varnum has significant experience in counseling and defending companies in bid-rigging and collusion matters and can provide guidance to companies seeking to review, update or create antitrust compliance programs.