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One Year In, DOJ’s Procurement Collusion Strike Force Picks Up Steam

AOL - Antitrust

Exactly one year ago, the Antitrust Division of the Department of Justice (“DOJ”) unveiled its Procurement Collusion Strike Force – an interagency partnership created to target collusion in public procurement and government contracting. As we reported at the time, the Strike Force married Antitrust Division enforcers, prosecutors from thirteen U.S. Attorney Offices around the country, and investigators from the Pentagon, General Services Administration, U.S. Postal Service, and FBI to work together to identify and combat antitrust and related fraudulent schemes that undermine competition in government procurement, grant, and program funding. One year in, our assessment is that the Strike Force’s increasing prominence will likely continue to grow, particularly as public procurements related to the COVID-19 pandemic attract heightened scrutiny.

Highlights from the Strike Force’s First Year

The Strike Force’s inaugural year has been a busy one:

  • The Strike Force has opened at least two dozen active grand jury investigations into potential criminal conduct.1
  • More than one-third of the Antitrust Division’s current investigations case load relates to public procurement.
  • In October 2020, the Strike Force’s work resulted in its first indictment, charging collusion in the bidding process for construction projects funded by the United States and the North Carolina Department of Transportation.
  • After several months of interim leadership, Daniel Glad, who also serves as the Assistant Chief of the Antitrust Division’s Chicago Field Office, reportedly has been appointed the permanent Director of the Strike Force. A search to add a permanent Assistant Director is rumored to be underway.
  • More than 50 federal, state, and local government agencies reached out to the partner with the Strike Force on investigations and/or to request training for procurement officials on how to detect collusion in the procurement process.2
  • Strike Force personnel have led trainings for more than 5,500 criminal investigators, data scientists, and procurement officials from approximately 500 agencies. The trainings are intended to teach government officials how to detect signs of anticompetitive conduct and to help create a pipeline of referrals for the Strike Force to investigate.3
  • The Strike Force is also assisting agencies to develop or revise outdated procurement processes with the goal of preventing and deterring collusion.

Strike Force Announces First Indictment

On October 23, DOJ announced a six-count indictment, charging North Carolina-based engineering firm Contech Engineered Solutions LLC (“Contech”) and a former Contech executive with participating in “long-standing conspiracies to rig bids and defraud the North Carolina Department of Transportation.” The indictment alleges collusion in the bidding process for aluminum structure projects funded by North Carolina and the United States, including headwalls and other structures that facilitate drainage for roads, overpasses, and bridges. In addition to antitrust crimes, the defendants also were charged with fraud for allegedly submitting bids that falsely certified they were competitive and free of collusion.

The defendants allegedly obtained pricing information from a competitor company and then intentionally submitted bids with pricing above the other company’s prices. The indictment identifies the competitor company and at least two of its employees as co-conspirators and cooperating witnesses, but does not name them as defendants. Similarly, an employee of defendant Contech is identified as a co-conspirator and cooperating witness. The co-conspirator company and witnesses most likely are cooperating with the DOJ investigation in exchange for leniency through the Antitrust Division’s Corporate Leniency program.

The specific crimes alleged include criminal antitrust violations under Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, mail fraud in violation of 18 U.S.C. § 1341, and wire fraud in violation of 18 U.S.C. § 1343. Possible penalties for the antitrust offenses include incarceration up to ten years and a fine up to $1 million for the individual defendant, and a criminal fine of up to $100 million for Contech, or twice the gain or loss derived from the crime, whichever is greater. The fraud offenses each carry the possibility of up to 20 years in prison and $250,000 in criminal fines for the individual defendant, and up to $500,000 in criminal fines for Contech.  Over the past decade, prison sentences for antitrust crimes have averaged about 18 months. This prosecution is a good example of the government prosecuting both a culpable company and its executive for antitrust crimes.

DOJ’s investigation into the aluminum structures industry reportedly is ongoing and is being jointly conducted by the Antitrust Division, the U.S. Postal Service, the U.S. Department of Transportation, and the U.S. Attorney’s Office for the Eastern District of North Carolina. Notably, the Eastern District of North Carolina was not among the 13 U.S. Attorney Offices that originally partnered with the Antitrust Division to create the Strike Force, which suggests that the Strike Force’s reach has expanded beyond its initial scope.

COVID -related Procurements Under the Microscope

In multiple public statements, the Antitrust Division has warned that the Strike Force is on “high alert” for collusion and other criminal conduct impacting public procurement and government contracting related to the COVID-19 pandemic. Indeed, in early March, just as the pandemic was starting to take hold in the United States, DOJ announced it would prosecute violations of the antitrust laws “in connection with the manufacturing, distribution, or sale of public health products” and “make sure that bad actors do not take advantage of emergency response efforts” during the crisis. Notably, among the conditions that the Strike Force considers “conducive” to collusion in the procurement process are several factors common to bidding in crisis situations: few sellers, a limited number of qualified bidders, few substitute products, and rush or emergency work. Companies looking to do business with, or provide emergency services to, government agencies in connection with the pandemic should ensure that their procurement activities are in compliance with competition laws and should expect heightened scrutiny.

Companies considering collaborating with competitors to pursue pandemic-related work should consider taking advantage of the antitrust agencies’ offer to provide expedited review of such collaborations. As we previously reported, a few months ago, DOJ and the FTC jointly announced that they would fast-track review of potential collaborations under the Business Review Process, and committed to providing a response within seven days (instead of the usual several months) for COVID -related projects. In unveiling the expedited review process, antitrust enforcers recognized that addressing the virus “will require unprecedented cooperation” and that businesses “may need to act immediately” to address pandemic needs.

For more information on this insight and to learn more about V&E’s Antitrust Practice, please contact Vinson & Elkins lawyers Lindsey Vaala or Craig Seebald.

For more information on V&E’s Government Contracts Practice, please contact Vinson & Elkins lawyers Dave Johnson or Jamie Tabb.


1 Max Fillion, US DOJ’s Procurement Collusion Strike Force has opened nearly to dozen criminal antitrust cases, Delrahim says., MLex (Sept. 16, 2020),

2 U.S. Dept. of Justice, Antitrust Division, “Antitrust Division Update 2020,” at 5,

3 Max Fillion, supra note 1.  See also U.S. Dept. of Justice, supra note 2, at 5.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.