New DOJ Strike Force Aimed at Contractors is Likely Overhyped

The Department of Justice recently announced the new Procurement Collusion Strike Force (“PCSF”), an inter-agency partnership that includes prosecutors from DOJ’s Antitrust Division and 13 U.S. attorneys’ offices, FBI investigators, and several agency Inspectors General offices. The stated goal of this partnership is “deterring, detecting, investigating and prosecuting antitrust crimes” in the government contracting world. The new PCSF website also streamlines and clarifies the process for agency whistleblowers.

The announcement comes just a year after DOJ recovered $230 million from an anti-trust investigation of South Korean companies providing fuel to American military bases in South Korea. This was by far the largest civil recovery under Section 4A of the Clayton Act, the tool that allows the government to recover civil penalties from contractors engaged in anti-competitive practices.

Innocent contractors have little reason to sound the alarm though. Anti-trust violations in the government procurement world are particularly rare. Of course, many contractors don’t trust their competitors enough to collude with them. In fact, since 1990, only five civil anti-trust cases have been brought against government contractors.

The PCSF’s red flags, listed here, reflect how odd it would be to collude with a competitor by warning agencies what to look for if “the document properties of two or more electronic proposals show that the proposals were created or edited by one vendor.” Not all the PCSF’s warning signs are so obvious though. In some fields knowledge of a competitor’s prices can easily be deduced without wrongdoing. Even if you have done nothing wrong to obtain that information, to avoid unnecessary scrutiny, refrain from violating one of the listed red flags such as making “statements on the phone or by e-mail indicating advance knowledge of a competitor’s prices.”