January 06, 2025

DOJ's Procurement Collusion Strike Force—Five Things You Need to Know

5 min

The Department of Justice recently celebrated the fifth anniversary of its Procurement Collusion Strike Force (PCSF), and all signs point to the PCSF continuing to be a Division priority into 2025 and beyond.

The PCSF is an interagency and intergovernmental attempt to uncover and prosecute antitrust and related crimes in government procurement, grant, and program funding at the federal, state, and local levels. It is led by the DOJ's Antitrust Division with dedicated Director-level staffing. The PCSF partners with multiple federal inspectors general (including the Department of Defense and the Department of Transportation), local U.S. Attorneys' offices, and state and local enforcers. Since its inception, the PCSF has opened more than 145 criminal investigations and has obtained over 60 guilty pleas and trial convictions.

Here are five things you need to know heading into 2025 about the PCSF and the DOJ's criminal antitrust program, especially if your company is involved in public procurement contracts:

  1. Antitrust Crimes: The DOJ's Antitrust Division brings criminal charges against individuals and companies for alleged agreements to rig bids, fix prices, or divide markets. Bid rigging can take the form of bid rotations, cover bids, bid suppression, complementary bidding, or the like. Price fixing can also take several forms, including agreeing to price floors, price ranges, list prices, or other components of price or output, as well as wage fixing. Market division allegations can include allocating certain territories or customers, including agreements not to solicit business from current or incumbent customers. The DOJ has alleged that agreements between companies not to hire or solicit each other's employees are also subject to criminal prosecution. All of these alleged agreements are charged as general intent crimes, and the DOJ argues it does not need to prove any intent to harm the competitive process or any anticompetitive effect. For example, in August, the Division indicted a company, an executive, and an employee for rigging bids and fixing prices on the sale of erosion control products for publicly funded infrastructure projects in Oklahoma. The indictment alleges that the defendants and their co-conspirators divided up the projects geographically and submitted intentionally high bids for projects or declined to bid for projects allocated to another company.
  2. Antitrust Penalties: The consequences for antitrust violations can be high. Criminal antitrust allegations are charged as felonies. For individuals, the charges carry a maximum jail term of 10 years and a maximum individual fine of $1 million. For companies, the charges carry a maximum fine of $100 million or twice the gain or loss from the alleged scheme, whichever is greater. In addition to criminal penalties, the DOJ can seek to recover civil damages for any amount a federal agency was overcharged because of the alleged antitrust scheme. Proven overcharge damages are automatically tripled.
  3. Related Crimes: The PCSF has several alternative statutes it may use as a basis to investigate and charge, even if no antitrust agreement is reached. It often employs the mail fraud, wire fraud, and False Claims Act statutes. These could be implicated, for example, if a company represented falsely that its bid was "arrived at independently, without, for the purpose of restricting competition, any consultation, communication, or agreement with any other offeror or competitor," as with Federal Acquisition Regulation 52.203-2. Schemes to obtain confidential bidding information of competitors from a procurement official have also been charged as a conspiracy to violate the Procurement Integrity Act. These related charges, among others depending on the facts, are often investigated and brought together with antitrust charges for the same overall set of conduct. For example, in October, the PCSF charged six defendants for an alleged scheme to rig bids, defraud the government, and pay bribes and kickbacks for the sale of IT products and services to the U.S. government, including the Department of Defense. The DOJ alleges in part that the defendants and co-conspirators obtained confidential procurement budgets, used the information to submit non-competitive bids, and shared and colluded on their submitted bids despite certifying that the bids were arrived at independently.
  4. Leniency Program: The Antitrust Division's unique Leniency Policy offers companies and individuals the possibility of non-prosecution protection in PCSF investigations. Corporations and individuals who are the first to report an antitrust crime, cooperate in the Division's investigation, and meet other program requirements can avoid criminal convictions, fines, and sentences. The Leniency Policy applies to other related offenses where conduct integral to the illegal antitrust activity constitutes another offense, such as mail or wire fraud. One key to the Leniency Policy is the speed with which a person self-reports, as only one person is eligible. As the Division notes, "[o]rganizations have lost the race for leniency by a matter of hours and faced significant fines, and prosecution of their senior executives, as a result." FAQ No. 3.
  5. Compliance Programs: An effective antitrust compliance program can help a company avoid antitrust issues altogether. It can also help a company detect potential antitrust issues and seek leniency if appropriate. The Division also considers a company's antitrust compliance program when making charging decisions and sentencing recommendations. The Antitrust Division recently updated its Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations. The Division's updated compliance guidance retains the focus on a compliance program's effectiveness at preventing and detecting wrongdoing by looking at several detailed factors, including design, leadership, training, auditing, and reporting. Key additions to the new guidance include appropriate oversight of new technologies such as artificial intelligence, guidelines regarding the use of ephemeral messaging, and fostering a culture of compliance at all levels of the company.

The PCSF will continue to work with other federal, state, and local enforcers in 2025 and beyond to investigate and prosecute antitrust crimes. It is important for companies to work with experienced antitrust counsel if faced with a criminal antitrust investigation, to consider applying for leniency under the Antitrust Division's Leniency Program, or to consider developing or evaluating an effective corporate compliance program.

For more information or assistance with any of these issues, contact William Vigen in Venable's Antitrust Practice Group.