Procurement Collusion Strike Force Significantly Expands Footprint
We recently reported several milestones and accomplishments from the inaugural year of the Antitrust Division’s Procurement Collusion Strike Force. To kick off its second year, the Strike Force has now formally announced a substantial expansion — identifying nine new U.S. Attorney partners and two new federal agency partners that will join the Strike Force in its mission to combat collusion, antitrust crimes, and fraud in government procurement, grant, and program funding. With the addition of these 11 new national partners, the Strike Force’s membership now stands at 29 agencies and offices committed at the federal level to rooting out misconduct that undermines competition in the procurement process.
New Partners Jump Aboard
Unveiled in November 2019, the Strike Force’s “founding members” included 13 U.S. Attorney Offices, the FBI, and the Offices of Inspector General at four federal agencies. The original U.S. Attorney partners were those from the Districts of Columbia and Colorado, Eastern District of Virginia, Northern District of Texas, Central District of California, Southern District of Florida, Northern District of Georgia, Northern District of Illinois, Eastern District of Michigan, and Eastern District of Pennsylvania. In addition to the FBI, the Inspector General Offices from the Department of Justice and Department of Defense, working with the Defense Criminal Investigative Service, the U.S. Postal Service, and the General Services Administration, rounded out the group of original Strike Force members.
Those founding partners will now be joined by the U.S. Air Force Office of Special Investigations and the Department of Homeland Security’s Office of Inspector General. Both agencies have “proven track records of working with the [Strike Force] as well as the Antitrust Division.” Additionally, the U.S. Attorneys from the following nine jurisdictions also have joined:
- Northern District of California
- District of Maryland
- District of Minnesota
- Southern District of Mississippi
- Eastern District of New York
- Middle District of North Carolina
- District of Puerto Rico
- Eastern District of Texas
- Southern District of Texas
In announcing the expansion, Assistant Attorney General Makan Delrahim emphasized that the Strike Force has grown significantly since its 2019 inception, when it operated initial district teams of just six to eight members each. The Strike Force’s ranks have grown to “more than 360 agent, analyst, and other law enforcement and OIG working members, hailing from 46 unique agencies and offices at the federal, state, and local levels.”
Undeterred by Covid-19
A virtual team, the Strike Force continues to execute its mission with little disruption despite the Covid-19 pandemic. We previously reported that the Strike Force has trained more than 5,000 procurement officials and other government personnel regarding red flags of collusion and how to spot evidence of possible antitrust misconduct in procurement. New statistics recently released by the Antitrust Division clarify that the number of government personnel trained by the Strike Force exceeds 8,000. This means that now, more than ever, uncovering evidence of possible antitrust violations is a top priority for a rapidly growing number of agency procurement officers. Indeed, the Antitrust Division reports that these training efforts have spurred an increasing number of tips coming into the Strike Force for further investigation.
The Strike Force also views the Covid-19 crisis as an opportunity for “bad actors” to try to take advantage of the system while the government’s guardrails are down. Federal government spending is necessarily heightened in response to the crisis and exigent procurement conditions may incentivize companies looking to capitalize on the increased availability of government dollars to try to cut corners in the procurement process. On the lookout for red flags, the Strike Force will actively refer substantive Covid-19 tips to other DOJ divisions as appropriate, including the Covid-19 Hoarding and Price-Gouging Task Force and the National Center for Disaster Fraud, and to agencies with oversight responsibility for CARES Act funding, including the Pandemic Response Accountability Committee, the Small Business Administration, the Department of Labor, and the Department of Health and Human Services, among others.
Joint Ventures and Teaming: A Risk Area
In recent remarks to the International Stability Operations Association, a leader of the Strike Force described joint ventures and teaming agreements as an area fraught with risk. Acknowledging that such collaborations are common in the government contracting space, he warned that the Strike Force will look “behind the curtain” and kick the tires to ensure that a JV or team is not a front for price-fixing or other misconduct. Additionally, a situation in which the winner of a bid subcontracts part of the work to one or more losing bidders may also raise red flags, particularly if there is a pattern of such conduct. The Strike Force leader encouraged companies that enter into teaming agreements, joint ventures or exclusivity arrangements for government work to consult antitrust counsel for guidance on how to stay compliant in such situations.
Sharpening the Ability to Mine and Wield Procurement Data
Data analytics is an increasingly important weapon in the Strike Force’s arsenal. In a recent presentation to an association of government contractors, a senior member of the Antitrust Division reported that the Strike Force is harnessing the skills and knowledge of data scientists in other parts of the federal government to comb through data collected by agencies through the procurement process. So far, use of such data has generally been limited to corroborating information already provided by cooperating witnesses who report antitrust misconduct. In other words, the Strike Force has used data analytics to bolster ongoing cases. Data analytics efforts are now entering a new phase, however, as the Strike Force looks to employ algorithms and other tools against bid and award data to identify possible collusion on its own, without the help of tips from cooperating witnesses or whistleblowers. As part of this push to further leverage data, the Strike Force hosted several data analytics trainings aimed at the OIG community, attracting more than 1,000 attendees.
Having recently named Daniel Glad as its first permanent Director, the Strike Force has now announced an Assistant Director to work with Glad. Sandra Talbott, a Trial Attorney in the Antitrust Division’s Chicago Office, will be stepping into the new Assistant Director role. Interestingly, in addition to her prosecutor chops, Ms. Talbott has in-house experience, having served nearly two years as the Director of Compliance for a Chicago-based bank.
For more information on 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 Daniel Graham, Dave Johnson, or Jamie Tabb.
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.