DOJ’s Scrutiny Of Antitrust Violations In US Government Procurement Picks Up Steam – Anti-trust/Competition Law

On June 25, 2021, the Antitrust Division of the US Department of
Justice (“DOJ”) announced that
Belgian security firm G4S Secure Solutions NV (“G4S”) had
agreed to plead guilty to violations of the Sherman Act for
conspiring to rig bids and fix prices of contracts to provide
security services to US and NATO military installations in Belgium.
If the plea agreement is accepted by the court, G4S will pay a $15
million criminal fine. Belgian security firm Seris Security NV
(“Seris”), three Seris executives and the former CEO of
G4S were indicted a few days later.

G4S’s plea agreement and the indictment of Seris Security
and its executives are the highest-profile steps taken by the
DOJ’s Procurement Collusion Strike Force (“PCSF”).
The PCSF is a multi-agency effort formed by the DOJ in 2019 to stop
collusion and bid rigging in government procurement and is the most
recent version of similar strike forces formed over the past 30
years that have had the same goal. The PCSF is charged with
focusing on detecting, investigating and prosecuting antitrust
crimes related to federal procurement contracts, grants and
government program funding. It brings significant prosecutorial
firepower to bear—including the resources of the Antitrust
Division, five criminal enforcement sections of the DOJ, over 20 US
Attorney’s Offices, the FBI and federal inspectors general.

PCSF’s indictments and plea agreements likely will not end
with G4S and Seris. Public sources indicate that the PCSF has
nearly 20 active grand jury investigations. Moreover, a significant
aspect of the PCSF’s mission is training procurement officials,
auditors and data analysts to detect potential
collusion.  

Finally, the PCSF has significant tools for developing
investigative leads, including:

• The Antitrust Division’s Corporate Leniency Program, which
  provides that if a party is the first to inform the government of
  an antitrust violation and fully cooperates with the investigation,
  it will not have to plead guilty or face indictment;




• Whistleblower protections that prohibit employers from taking
  steps to punish antitrust whistleblowers;




• Large quantities of US government procurement data that can be
  monitored for “red flags” of collusion, such as
  incumbents always winning bids, a sudden increase in bid pricing,
  bids that are much higher than estimates, regular suppliers
  refusing to submit bids, bidders taking turns winning and winning
  bidders frequently subcontracting with losing bidders.

Antitrust charges carry significant penalties. Corporations
found guilty of antitrust violations, such as price fixing and bid
rigging, can be fined up to $100 million or twice the total loss
caused by the violation. And, significantly for government
contractors, antitrust violations can lead to suspension and
debarment proceedings. Executives found to have participated in
antitrust violations are subject to up to $1 million in criminal
fines and up to 10 years in prison. Finally, companies that are
publicly charged with having committed antitrust violations can
expect to face related civil litigation (and treble damage claims)
based on False Claims Act and other antitrust theories of
liability.

This recent enforcement activity is a reminder that all
companies that do business with the US government, whether in the
United States or abroad, are at risk for increased criminal
antitrust scrutiny.

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