PCSF: A Five-Year Evolution
The PCSF harnesses the combined capacity and expertise of prosecutors from the DOJ’s Antitrust Division’s criminal offices and US Attorneys’ Offices, along with investigators from the Federal Bureau of Investigation (FBI) and various Offices of the Inspector General (OIGs), to combat antitrust crimes and related schemes affecting procurement at all levels of government. Each district team, which includes national partners and in-district partners, uses its collective resources and skills to fulfill the PCSF’s mission of deterring, detecting, and prosecuting crimes that undermine competition in government procurement, grant, and program funding. Over the last five years, the PCSF’s fundamental mission has remained the same. However, as government spending risks have crystalized and developed, the PCSF has embraced a broader mandate to more effectively and holistically address these evolving risk areas
In 2019, the PCSF began with a coordinated launch across 13 judicial districts involving five national investigative partners: the FBI and the OIGs for the Department of Defense (DoD), the DOJ, the General Services Administration (GSA), and the US Postal Service. In 2020, PCSF broadened its efforts, launching two new initiatives: (1) the PCSF Data Analytics Project, an effort to “proactively identify red flags of antitrust crimes and related fraud schemes in bid and award data,” and (2) PCSF: Global, which is designed to deter, detect, investigate, and prosecute collusive schemes that target government spending outside the United States. PCSF also expanded to nine additional districts in “areas of strategic importance with critical spending,” adding national law enforcement partners, the Air Force Office of Special Investigations, and the OIG for the Department of Homeland Security (DHS). At the same time, the Antitrust Division announced a permanent PCSF Director and the PCSF’s first-ever Assistant Director.
The change in administrations from President Trump to President Biden did not alter the PCSF’s existence or objectives. In fact, new mandates from the White House reinforced and strengthened existing PCSF efforts. In July 2021, President Biden issued an Executive Order that called for a whole-of-government approach to address various aspects of unfair competition in the economy, which was reinforced by a memorandum drafted by Associate Attorney General Vanita Gupta to the Antitrust Division. In this memorandum, the Associate Attorney General specifically named the PCSF, highlighted its role in promoting and protecting the competitive process for public procurement, and directed the Antitrust Division to draft internal policies, educate procurement officials on antitrust crimes, work with federal partners to create best practices for data collection and analytics that can help detect collusion, and work with law enforcement partners to prosecute actionable misconduct. These directives validated PCSF’s existing mission of working cooperatively with other agencies, simultaneously setting a model for whole-of-government efficiencies in aggressively protecting competition. In October 2021, while speaking at an ABA event for the Public Contract Law Section, PCSF Director Daniel Glad drew from recent examples and cases, highlighting two of PCSF’s priority areas: (1) “set-aside fraud,” that is, collusion and fraud in government programs that are designed to facilitate the participation of underserved communities and individuals, and (2) infrastructure spending.
In 2022, the PCSF made substantial gains in its charging and disposition outcomes. Criminal charges were filed and resolved against defendants in various industries and geographies, including transportation improvement and repair contracts in California; aluminum structure projects in North Carolina; highway crack-sealing maintenance projects in Wyoming and surrounding states; insulation contracts in Connecticut; and US military contracts for projects in Alaska, Georgia, Michigan, Texas, and South Korea. Following the passage of the Infrastructure Investment and Jobs Act (IIJA) in November 2021, and solidifying the Strike Force’s commitment to infrastructure spending oversight, the PCSF once again expanded in November 2022 to include four new national law enforcement partners: the OIGs for the Department of Energy (DOE), Department of the Interior (DOI), Department of Transportation (DOT), and Environmental Protection Agency (EPA). Notably, these offices are responsible for overseeing hundreds of billions of dollars in authorized funding that will be distributed to federal, state, and local government agencies through the IIJA, the Inflation Reduction Act (IRA) of 2022, and the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022.
PCSF charges and dispositions continued throughout 2023, and the year wrapped up with the announced addition of PCSF staff resources, including resources for federal spending and global initiatives, and the PCSF’s first summit, which convened PCSF’s law enforcement partners from across the country to discuss emerging threats and strategies to confront them. Increased district collaboration and activity were marked by local summits, including those in Los Angeles and Atlanta. In April 2024, the PCSF once again expanded to include three new districts with “diverse government spending oversight priorities” and the Department of Commerce (DOC) OIG, whose oversight of billions of dollars authorized under the IIJA and CHIPS and Science Act “closely aligns with PCSF priorities.”
As demonstrated by its robust track record and commitment to strategic expansion, the PCSF is here to stay. And given increased government spending, agency risks, and recent fraud cost estimates, the Strike Force’s existence is more important now than it has ever been.
Criminal Violations in Public Procurement
To counsel clients, public contract lawyers should understand what crimes and conduct are within the PCSF’s enforcement purview.
Price-fixing, bid rigging, market allocation, and monopolization, including conspiracies and attempts to monopolize, are all prosecuted under Sections 1 and Section 2 of the Sherman Act (15 U.S.C. §§ 1, 2). As a federal crime, Sherman Act violations require interstate or foreign commerce. Additional elements of a Section 1 offense are (1) a conspiracy between two or more competitors to fix prices, rig bids, or allocate markets and (2) a defendant knowingly joining the conspiracy. Additional elements of a charge regarding Section 2 conspiracy to monopolize are (1) a conspiracy to monopolize a market and (2) a defendant joining the conspiracy, knowing its object and intending to help accomplish the conspiracy. For attempted monopolization, a defendant must have (1) had a specific intent to monopolize the market and (2) engaged in anticompetitive conduct in furtherance of that intent, and (3) there was a dangerous probability that the defendant would sooner or later achieve monopoly power. For monopolization, the defendant must have (1) had monopoly power in the market and (2) willfully acquired or maintained that monopoly power through anticompetitive conduct.
PCSF teams will investigate and prosecute other fraud and related offenses where the evidence supports it, such as mail or wire fraud, and conspiracy to commit either; conspiracy to defraud the United States; major fraud against the United States; criminal false claims; bribery of a federal, state, or local official; kickbacks by private contractors; money laundering; false statements; and violations of the Procurement Integrity Act. Deliberately falsifying a certificate of independent price determination required by Federal Acquisition Regulation (FAR) 52.203-2, which is typically included in a vendor’s standard representations and certifications when a vendor registers through the Systems for Award Management (SAM), or other misstatements to the government also can lead to allegations of fraud or false statements.
PCSF teams regularly investigate and prosecute bid rigging in federal, state, and local government procurements. In this context, bid rigging occurs when competitors agree in advance who will submit the winning bid during a competitive bidding process (formal or informal) for a government contract award. Bid rigging takes several forms, including bid rotation, where competitors agree to take turns winning bids; complementary or “cover” bidding, where competitors agree to submit intentionally high, or otherwise unacceptable, bids; and bid suppression, where competitors agree to refrain from bidding, giving a competitor a deliberate advantage. Competitors engaged in bid rigging could also conspire to split up public contracts through a market allocation conspiracy or agree to divide contracts in certain geographic areas or for certain customers and products.
Government procurements are especially vulnerable to bid rigging and related crimes. To begin, the sheer dollar amount of public money spent on contracts is immense. In fiscal year 2023, the US government alone spent over $750 billion on procurement contracts. According to one estimate, many countries spend approximately 13 percent of their gross domestic product (GDP) on public procurement. And as government spending increases, so too do incentives for greed and criminal opportunity. As articulated by Judge Edward Carnes from the US Court of Appeals for the Eleventh Circuit, “Like bears to honey, white collar criminals are drawn to billion-dollar government programs.”
For certain public projects, there may be relatively few eligible bidders and it may be difficult for new competitors to enter the market. For many public projects, repetitive and regularly scheduled purchases, as well as the regular public solicitation announcements, can make upcoming government procurement needs fairly predictable. When competitors can predict roughly how much and how often contracts are coming, it may be easier for them to conspire. Rush or emergency projects such as disaster relief efforts are also at higher risk for criminal collusion. For example, in 2009, a sand-and-gravel subcontractor was convicted of conspiracy and bribery in connection with a $16 million protection project for the reconstruction of a New Orleans levee following the devastation caused by Hurricane Katrina in 2005. The defendant offered to pay former contract employees of the US Army Corps of Engineers (USACE) in exchange for their attempt to steer a dirt, sand, and gravel subcontract on the levee project to her, planning to use proceeds from the subcontract to pay the bribes.
Certain red flags could signal potential bid rigging or other collusion and fraud in public procurements. Such red flags include the same companies winning and losing awards over time; companies only submitting bids in certain geographic areas or for certain projects despite being qualified and able to bid on others; company bids that are much higher than government estimates; sudden increases in bid prices that cannot be explained by increased costs; large price differences between the winning and losing bids; or winning companies subcontracting to losing bidders. But this list is not exhaustive. The FAR and other public resources outline several patterns and schemes that remain suspicious, such as the existence of a “collusive price estimating system” and the filing of a “joint bid by . . . competitors when at least one of the competitors has sufficient technical capability and productive capacity for contract performance.”
Consequences of Antitrust Crimes
Violating the Sherman Act is a federal felony. Individuals face a prison term of up to 10 years, criminal fines of up to $1 million, and the consequences of a felony conviction. Corporate defendants face a fine of up to $100 million, civil damages, and possible debarment. Under some circumstances, the maximum potential fine may be increased above the Sherman Act maximums to twice the gain or loss involved. A convicted defendant may be ordered to make restitution to the victims for all overcharges. When the federal government is a victim of antitrust violations, the DOJ can obtain triple damages under Section 4A of the Clayton Act, as can state and local governments and other private plaintiffs. The federal government also can recover civil penalties and triple damages under the False Claims Act.Conviction for antitrust offenses can result in debarment under FAR 9.406-2, which provides for debarment from federal contracting for convictions of federal antitrust statutes “relating to the submission of offers.”
A Closer Look at Criminal Collusion and PCSF Enforcement
Recent PCSF cases and dispositions illustrate how bid-rigging “red flags” can signal conduct within the PCSF’s enforcement mandate. The cases discussed below provide examples of prosecutions from which public contract lawyers can glean insights to advise clients on what not to do. Numerous cases involving government contractors have resulted in convictions, fines, and restitution for government agencies—vindicating the rights of taxpayers.
Oklahoma Transportation Construction Contracts
As a result of a PCSF investigation into bid rigging in the government transportation contracts space, four erosion control company owners or managers pleaded guilty to engaging in an anticompetitive conspiracy involving over $100 million in publicly funded transportation construction contracts across Oklahoma. According to court documents filed in the US District Court for the Western District of Oklahoma, these four defendants conspired, along with others, to rig bids, fix prices, and allocate contracts for erosion control products and services (including solid slab sodding) from 2017 through 2023. Many of the contracts involved were funded by the DOT. As part of the criminal conspiracy, the defendants often sent intentionally high-priced bids or outright refused to bid on the erosion control contracts. The defendants and their co-conspirators carried out the conspiracy by agreeing to allocate bids for the contracts based on geographic delineations within Oklahoma, agreeing not to compete for the contracts, agreeing to raise and maintain prices for solid slab sodding and other line items within the contracts, and discussing and exchanging prices submitted to prime contractors for the contracts so as not to undercut one another’s prices. Some defendants also took steps to conceal co-conspirator communications in furtherance of the conspiracy. The prosecution of this case is ongoing. In August 2024, a federal grand jury returned an indictment against one company, its vice president, and an employee, alleging that these defendants were part of a criminal conspiracy with the four defendants who had already pleaded guilty.
Forest Firefighting Services Contracts
A federal wiretap investigation led to the discovery of a nearly decade-long conspiracy to rig bids and allocate US Forest Service contracts, according to a seven-count indictment brought by a grand jury against two defendants in December 2023. As alleged in the indictment, from about February 2014 to about March 2023, the defendants, both company executives, coordinated their bids on US Forest Service fuel truck and water truck contracts for forest-firefighting services to “squeeze,” “drown,” “punch,” “low ball,” and otherwise exclude and attempt to exclude competitors from the market. One of the defendants admitted to his role in the conspiracy and pleaded guilty to violating both Sections 1 and 2 of the Sherman Act. The defendant admitted that he participated in a conspiracy to monopolize wildfire fuel truck services for certain areas within the US Forest Service’s Great Basin wildfire dispatch region. The plea agreement detailed the methods and means that this defendant used to accomplish the crimes, including rigging bids and allocating territories with a co-conspirator. Despite bid rigging that included submitting intentionally high bids and abstaining from bidding on certain projects, the defendant falsely certified to the federal government that his prices were independently determined and that he did not share his bids with other people, nor did he induce any person to bid in a way that restricted competition. Evidence obtained in the form of text messages and certain phone records provided proof of the defendant’s role in the conspiracy.
South Korea US Military Installation Contracts
An investigation revealed a scheme to rig bids and defraud the US military of millions of dollars on repair and maintenance work for military facilities around the world, including military hospitals in South Korea. In September 2023, a South Korean company was sentenced for its role in a bid-rigging and fraud scheme involving repair and maintenance subcontract work at US military hospitals in South Korea. The subcontract work related in part to a USACE contract providing for operation and maintenance support services at US military facilities around the world. The contract required the prime contractor to use a competitive bidding process when awarding subcontract work under the contract. But the defendant and its co-conspirator, another South Korean company, agreed to submit rigged bids to ensure that the defendant won most of the subcontract work in South Korea under the USACE contract. The scheme caused the DoD to overpay for the defendant’s services in the amount of approximately $3.6 million. The sentencing followed a May 2023 guilty plea to one count of wire fraud and one conspiracy to restrain trade. The defendant company was ordered to pay a criminal fine of $5 million and $3.6 million in restitution.
In March 2024, another government subcontractor company and its chief executive officer were indicted by a federal grand jury of the US District Court for the Western District of Texas as part of the same underlying investigation. The superseding indictment added these two defendants to the March 2022 charges pending against two South Korean nationals and added one count of conspiracy to commit wire fraud. According to the superseding indictment, from 2018 through 2021, the defendants and their co-conspirators entered into and engaged in a conspiracy to suppress and eliminate competition by rigging bids and fixing prices for subcontract work and defrauded the DoD to obtain millions of dollars in repair and maintenance work. The two companies were competitors for subcontract work on the Defense Logistics Agency (DLA) and USACE contracts. Allegedly, the defendants, along with their co-conspirators, caused the submission of rigged bids and fixed prices for subcontract work such that one company would win subcontract work under the USACE contracts and the other company would win subcontract work under the DLA contracts. Because both the USACE and DLA contracts required a competitive process for awarding subcontract work, the indictment alleges that the objects of the wire fraud and conspiracy to commit wire fraud counts were for the defendants and their co-schemers to unlawfully enrich themselves and others by obtaining money from the United States by fraudulently submitting rigged bids and fixing prices for subcontract work that ostensibly satisfied the competitive process requirement.
Corporate Liability and Novel Solutions
PCSF’s widespread reach covers both localized and international conduct across markets and sectors, and companies doing business with the government in any sized geography or market should learn from past examples. For instance, a North Carolina engineering firm was sentenced in June 2021 to a $7 million criminal fine and more than $1.5 million in restitution to the North Carolina Department of Transportation (NCDOT) after pleading guilty to long-lasting conspiracies to rig bids for infrastructure projects solicited by the NCDOT and conspiring to commit mail or wire fraud. Weeks later, a Belgian-based security services company agreed to plead guilty and pay a $15million criminal fine for its role in a conspiracy to rig bids, allocate customers, and fix prices for defense-related security services contracts in Belgium. Those contracts included a multimillion-dollar contract with DoD military bases and installations and those with the North Atlantic Treaty Organization Communications and Information Agency, which is funded in part by the United States.
Fines and restitution are not the only penalties companies should contemplate when assessing the cost of criminal collusion. When confronting criminal conduct in an industry that is highly regulated, or, as relevant to the PCSF, where much of a business’s activities are selling to the government, PCSF attorneys often will consider creative remedies that have been used successfully in non-PCSF Antitrust Division resolutions. For example, in August 2023, for the first time in a criminal case, the Antitrust Division required two corporate defendants to divest a certain drug line that was a core part of a price-fixing conspiracy. This conspiracy raised prices of essential medicines and deprived Americans of affordable access to prescription drugs. Seven generic pharmaceutical companies faced criminal charges for their participation in the schemes and collectively agreed to pay more than $681 million in criminal penalties. The PCSF will use novel resolutions, particularly when there may be significant collateral consequences from a criminal conviction, when seeking to hold a corporate defendant accountable and truly restore competition.
Enhanced Incentives to Report, Self-Disclose, Cooperate, Remediate, and Invest in Compliance
Several legislative, policy, and program developments over the last five years, which affect the Antitrust Division and the DOJ generally, have the potential to increase PCSF investigations and shape the future of PCSF law enforcement efforts. Such developments share the common theme of creating incentives to report and expedite the reporting of antitrust and other corporate crimes.
Nonretaliation Legislation
The Criminal Antitrust Anti-Retaliation Act of 2019 (CAARA) was enacted in December 2020. CAARA encourages witnesses to criminal antitrust conduct to come forward and report antitrust crimes without fear of reprisal from their employer. Under CAARA, employers are prohibited from taking punitive action against an employee, contractor, subcontractor, or other agent who (1) internally reports potential criminal antitrust or related violations, (2) externally reports employers to the federal government, or (3) assists the federal government in an investigation or proceeding related to the potential criminal conduct. CAARA provides avenues of relief for a whistleblower in the event an employer retaliates. If the whistleblower prevails, such relief can include reinstatement with the same level of seniority, back pay with interest, and compensation for any special damages, including litigation costs. However, CAARA does not apply to employees who “planned and initiated” the antitrust violation or related crimes, or obstructed, or attempted to obstruct, the investigation.
Leniency
Recent changes in the Antitrust Division’s Leniency Policy similarly encourage self-reporting of antitrust crimes and raise the bar for companies to qualify for nonprosecution protection. The Division’s Leniency Policy, which was adopted nearly 30 years ago, remains a pillar of the Division’s enforcement effort. Leniency incentivizes corporations and individuals involved in wrongdoing to self-report participation in an anticompetitive criminal conspiracy in violation of Section 1 or Section 3(a) of the Sherman Act. Under the Antitrust Division’s Leniency Policy, corporations and individuals who are the first to self-report, with “candor and completeness,” their participation in an antitrust conspiracy; who provide “timely, truthful, continuing, and complete” cooperation in the Antitrust Division’s investigation of that conspiracy; and who otherwise meet the program’s requirements can avoid criminal conviction, fines, and prison sentences.
In April 2022, the Antitrust Division announced significant updates to the Leniency Policy to further promote accountability. First, under the revised Leniency Policy, to qualify for leniency, a company must promptly self-report after discovering its wrongful conduct. Although no specific timeframe is provided, the Antitrust Division makes a “prompt” reporting assessment based on the facts and circumstances of the illegal activity and the size and complexity of a corporate applicant’s operations. The applicant bears the burden of proving that its self-reporting was “prompt.” Applicants that are uncertain whether particular conduct is criminal should err on the side of seeking a marker for disclosing sooner rather than later, as one’s failure to appreciate that certain conduct could be criminal does not absolve them of the “prompt” self-reporting requirement.
The second major update announced in April 2022 is that a company must now undertake remedial measures to redress the harm it caused and improve its compliance program to qualify for leniency. Remedial measures beyond improving a company’s compliance plan and paying restitution may be required to ensure the applicant fully remedies the harm caused by the offense and eliminates or reduces the risk of recidivism. Whether and what remediation is appropriate depends on the nature of the illegal activity, the nature of any harm caused, and the applicant’s role in it. Necessary remediation may include steps demonstrating recognition of the seriousness of the illegal activity, accepting responsibility for it, implementing measures to reduce the risk of the illegal activity repeating itself (including measures to identify future risks), and taking efforts to discipline or remove culpable, noncooperating personnel.
Voluntary Self-Disclosures and Whistleblower Policies
At the DOJ level, substantial policy changes have been announced and implemented over the last several years, with the ultimate goal of encouraging both companies and individuals to report what they know as soon as they know it. In September 2022, Deputy Attorney General Lisa Monaco directed all DOJ components that prosecute corporate crime to develop a formal voluntary self-disclosure (VSD) policy. Although policies may be unique to each component, a core principle is shared by all: “Absent aggravating factors, the Department will not seek a guilty plea when a company has voluntarily self-disclosed, cooperated, and remediated misconduct.” As of March 2023, for the first time, every US Attorney’s Office and component that prosecutes corporate crime had in place an “operative, predictable and transparent” VSD program. VSD policy, expectations, and directives were subsequently formalized in the Justice Manual.
In October 2023, the new Safe Harbor Policy for VSD in Mergers and Acquisitions (M&A) was announced. This DOJ-wide policy established a Safe Harbor period for acquiring companies to disclose criminal misconduct promptly and voluntarily. If the acquiring company cooperates with any ensuing criminal investigation and engages in timely, requisite, and appropriate remediation and/or restitution, the acquiring company will receive the presumption of a prosecution declination. The Safe Harbor period is defined as six months, or 180 days, from the date of closing an acquisition. Acquiring companies will then have a baseline of one year from the date of closing to fully remediate the misconduct and must pay any disgorgement, forfeiture, and/or restitution arising from the misconduct at issue in accordance with the applicable VSD policy. The Antitrust Division’s operative VSD policy—the Leniency Policy—governs such qualifying requirements for acquiring companies seeking nonprosecution protection for an acquired entity’s participation in a criminal antitrust conspiracy. Importantly, the M&A Safe Harbor Policy applies only to “lawful, bona fide” acquisitions.
Finally, in March 2024, a DOJ-run whistleblower rewards pilot program was announced, one of which was formally launched for certain corporate crimes in August 2024. As is the case in corporate VSD programs, to qualify for the whistleblower rewards program, a whistleblower must report on conduct unknown to the DOJ. The new incentives for corporations and individuals reinforce each other and “create a multiplier effect that encourages both companies and individuals to tell [DOJ] what they know . . . as soon as they know it.”
Focus on Compliance Programs
Compliance program guidance has similarly undergone important developments over the last five years. In July 2019, the Antitrust Division announced a policy change to incentivize and potentially reward investment in corporate compliance, where the effectiveness of a company’s compliance program would be evaluated when making charging decisions and during the sentencing stage. The “Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations” guidance directs prosecutors to ask three preliminary questions about the company’s compliance efforts at the outset of a compliance program inquiry:
- Does the company’s compliance program address and prohibit criminal antitrust violations?
- Did the antitrust compliance program detect and facilitate prompt reporting of the violation?
- To what extent was a company’s senior management involved in the violation?
Antitrust Division prosecutors are further directed to consider the following factors when evaluating the effectiveness of an antitrust compliance program: “(1) the design and comprehensiveness of the program; (2) the culture of compliance within the company; (3) responsibility for, and resources dedicated to, antitrust compliance; (4) antitrust risk assessment techniques; (5) compliance training and communication to employees; (6) monitoring and auditing techniques, including continued review, evaluation, and revision of the antitrust compliance program; (7) reporting mechanisms; (8) compliance incentives and discipline; and (9) remediation methods.”
The 2022 updates to the Antitrust Division’s Leniency Policy require improvements to a company’s compliance program to qualify for leniency. The 2022 revised FAQs establish that corporate compliance should be appropriately tailored to the applicant’s size and line of business. A corporate leniency applicant’s antitrust compliance, including its culture of compliance and risk assessment, will be evaluated. The evaluation is a fact-specific inquiry and there is no specific checklist or formula for determining whether a compliance policy or program is effective. A compliance program will be evaluated at the time of the antitrust violation, at the time of any subsequent improvements, and after the antitrust violation is reported to ensure similar illegal activity does not recur. Applicants of all sizes must demonstrate that they have taken reasonable steps to address and remediate the applicant’s criminal conduct and prevent future antitrust violations. Even when a company does not qualify for leniency, a disposition short of a criminal conviction may still be appropriate if the company has invested in an effective compliance program that allowed it to identify the misconduct and promptly self-report. Importantly, a company has an obligation to self-report when a compliance officer becomes aware of the criminal conduct.
Staying abreast of recent DOJ and Antitrust Division developments will better enable public contract lawyers to guide clients through the pros and cons of reporting suspected criminal conduct. As demonstrated above, over the last five years, much emphasis has been placed on encouraging good corporate culture and governance. Robust corporate compliance programs remain at the forefront of the DOJ’s efforts to combat corporate crime. Recent public statements and policy changes have made known that the DOJ seeks to empower companies to do the right thing, rewarding investments in compliance and “good corporate citizenship.” Such investments mitigate a company’s financial risks. With these increased incentives, companies should follow suit and invest in compliance programs now to prepare for the future.
Looking Toward the Future
With the promise of a paid whistleblower program and enhanced corporate compliance and voluntary self-disclosure incentives, rooting out corporate crime remains a high priority for the DOJ and PCSF. In the years to come, these policy enhancements will likely increase viable case leads and, hopefully, further incentivize corporate compliance. But these are not the only efforts PCSF is taking to deter and detect anticompetitive criminal conduct in government procurements.
Training and education remain foundational to the PCSF’s success. Robust outreach to procurement officials, government contractors, investigators, auditors, and data scientists so they can recognize and report antitrust risks and potential wrongdoing in the procurement process is still a primary focus of PCSF. But as the PCSF has expanded, its responsibilities have expanded as well. Incorporating strategies to offset the risks of increased government spending under the IIJA, the IRA, and the CHIPS and Science Act will require robust state and local collaboration because much of the money will be distributed as federal grants to nonfederal government entities. Supplemental funding in response to the war in Ukraine and other international events, including the 2026 FIFA World Cup, underscore the importance of international collaboration to ensure US dollars are not the subject of procurement collusion abroad.
Beyond traditional outreach and training, the PCSF continues to foster government-wide awareness and capacity with its Data Analytics Project. Formed to facilitate collaboration across the US law enforcement community in developing and using data analytics to identify signs of potential criminal anticompetitive collusion in government procurement data, the PCSF trains government employees, advises data scientists, advocates for collection and retention of “pre-award data,” and collaborates with international competition authorities. This proactive work has the potential to protect and save US taxpayer dollars, as bid rigging raises prices for public purchasers and reduces quality to the detriment of taxpayers and users of the public good or service. By one estimate, the US government loses an estimated $233 billion to $521 billion annually to fraud.
The PCSF is not alone in its approach. The Organisation for Economic Co-operation and Development (OECD) recommends and encourages the development of reliable and comprehensive procurement databases and the use of digital screens to detect bid-rigging cartels. Notably, multiple foreign jurisdictions have successfully applied data tools to detect anticompetitive conduct in their country’s procurements. Although progress has been made since 2020, not all US government agencies can leverage procurement collusion analytics because they may lack the systematic collection and retention of the necessary procurement data. In contrast, OECD recommends the use of electronic procurement systems for all stages of the procurement process, as well as maintaining databases that include data about bids, contracts, and key variables that facilitate evaluating whether bid rigging might have occurred. Additionally, the OECD recommends that such databases be accessible to public procurement officials and relevant law enforcement authorities.
Efforts within the US government continue to address this deficiency and more closely align with OECD’s recommendations. For instance, in March 2024, the EPA OIG issued a public report, “The EPA Has Insufficient Internal Controls for Detection and Prevention of Procurement Collusion.” As noted in the report, the EPA’s automated contract writing and management system “does not store and organize all of its procurement data in a manner that allows for proactive oversight and program management that could detect and prevent fraudulent, collusive behavior, such as bid rigging, price fixing, or other anticompetitive practices.” Noting the significance of this risk, the report states, “since fiscal year 2017, the [acquisition office] has awarded over 3,500 competitively bid, negotiated contracts worth over $2 billion for goods and services,” which may be “susceptible to procurement collusion due to the EPA’s lack of internal controls….” Warning that the lack of internal controls “may lead to increased prices of goods and services that the [EPA] needs to complete its mission,” the report makes a series of recommendations aimed at mitigating the risk of potentially fraudulent, collusive behavior. Recognizing these potential risks, the report states that “more efficient use of taxpayer dollars requires the development of automated, proactive fraud detection practices, such as data analytics, that could potentially prevent or detect the collusive behavior before a contract is awarded and money is dispersed to vendors.”
A second federal agency echoed these sentiments. In April 2024, the AMTRAK OIG issued a report, “Additional Insights on Fraud Risks as the Company Increases Its Contracts and Procurements.” This report, which is especially timely given that AMTRAK is likely to receive approximately $66 billion from the IIJA, highlights the need to centralize procurement data, collect procurement data elements, and actively analyze data to identify contract and procurement fraud schemes. The report calls out core Sherman Act conduct and highlights the necessity of collecting pre-award procurement data to track potential fraud.
Beyond the federal government, but with an eye toward corporate compliance programs, companies are encouraged to use the data to which they have access to identify potential anticompetitive conduct. The Antitrust Division’s Compliance Program guidance suggests the use of screens, communications monitoring tools, and statistical testing designed to identify potential antitrust violations could be an effective corporate monitoring or auditing mechanism.
Conclusion
Five years in and dozens of convictions later, the PCSF has proven itself an effective interagency model that is holistically and strategically leveraging the expertise and available resources of its prosecutors and agents. Recent legislation, updates to DOJ and Antitrust Division policies, public outreach, education, and advocacy efforts are sure to enhance the PCSF’s capacity and reach in years to come. In raising awareness of procurement collusion indicators and investing in robust and comprehensive compliance programs, government contractors stand to mitigate the risk of criminal exposure, costly penalties and restitution, and the loss of revenue through debarment or divestiture, by learning from the mistakes of others and ensuring that antitrust compliance is at the center of their corporate compliance programs. Most importantly, companies can do their part in ensuring the US government and its taxpayers receive all the benefits of competition.
