DOJ Procurement Collusion Strike Force: Looking Ahead To 2021 – Government, Public Sector

In 2019, Arnold & Porter wrote about DOJ’s new multi-agency Procurement Collusion Strike Force (PCSF or
Strike Force). Formed in November 2019, this Antitrust Division
initiative focuses on detecting, investigating, prosecuting, and
deterring antitrust crimes such as bid-rigging and related
fraudulent schemes in the grant, government-procurement, and
program-funding areas. At the time of the announcement, over
one-third of the Antitrust Division’s open investigations
related to public procurement or other violations against the
government. During its first year, the PCSF developed resources,
focused on CARES Act spending, and participated in its first public
indictments.

Below are the main developments from 2020 and our analysis for
how they will bear on the Strike Force’s activities in
2021.

New Partners and Leadership. Assistant
Attorney General Makan Delrahim recently explained that the PCSF’s first year was
about “proving the concept.” In that regard, PCSF
continues to grow. Initially a collaboration between DOJ’s
Antitrust Division, 13 US Attorneys’ Offices, FBI
investigators, and four federal Offices of Inspector General, the
Strike Force continues to welcome new partners into the fold.
Delrahim announced that nine additional US Attorneys’ Offices
will join the effort, as will the Department of Homeland
Security’s Office of Inspector General and the Air Force Office
of Special Investigations. In addition to new partners, DOJ
appointed new leadership: Daniel Glad was made PCSF’s first
permanent director. Glad previously served as the Assistant Chief
in the Antitrust Division’s Chicago Office and as a prosecutor
in the US Attorney’s Office for the Northern District of
Illinois.

COVID-19. The global pandemic has
accelerated PCSF’s efforts. In response to the health crisis,
the Strike Force customized its training to meet the needs of the
contract management and procurement professionals responsible for
CARES Act spending at the Center for Disease Control and
Prevention, the Federal Emergency Management Agency, and the United
States Army Corps of Engineers. In addition, PCSF created a
dedicated reporting portal for procurement collusion
tips, referring hundreds of price gouging and hoarding tips to the
COVID-19 task force.

Training. Despite operating in a
virtual environment, PCSF has trained over 8,000 criminal
investigators, certified fraud examiners, auditors, data
scientists, and procurement officials on how to spot evidence of
collusion in public procurement. According to Delrahim, DOJ has
focused on developing analytical models that “proactively
identify red flags of antitrust crimes and related fraud schemes in
bid and award data.” The Strike Force has also expanded to
include an international focus, investigating anti-competitive
behavior involving US government contracts and grants abroad.

Investigations. Delrahim emphasized
that over the past year, PCSF has opened over two dozen grand jury
investigations, related to issues ranging from defense and national
security to public works projects. In October 2020, DOJ referred to
PCSF when announcing the indictment of Contech
Engineered Solutions and its former executive on fraud and
antitrust charges, though the PCSF’s exact role in the
investigation is unclear. The defendants allegedly conspired to rig
bids for aluminum structure projects funded by the United States
and North Carolina Department of Transportation for nearly a
decade.

What to Expect. By appointing a
permanent director and expanding inter-agency partnerships, the
Antitrust Division signals its continued commitment to pursuing
companies and individuals involved in fraudulent schemes, including
bid-rigging in the government procurement sphere. We expect that
this commitment will result in the announcement of additional
prosecutions in 2021.

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