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Procurement Collusion Strike Force’s Focus On Detection Yielding New Investigations – Anti-trust/Competition Law


United States:

Procurement Collusion Strike Force’s Focus On Detection Yielding New Investigations


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On March 3, 2020, the American Bar Association (ABA) hosted a
Q&A with two members of the Procurement Collusion Strike Force
(PCSF)—Mark Grundvig, the Assistant Chief of the DOJ
Antitrust Division’s Criminal II section, and Markus Mills,
Special Agent, Major Fraud Investigations Division, USPS Office of
Inspector General.

During the course of the Q&A, Mr. Grundvig and Mr. Mills
provided their perspective on the goals and progress of the
PCSF.

WHAT HAPPENED:

  • The PCSF representatives explained
    that the PCSF is heavily focused on improving detection of per
    se
    antitrust violations such as
    bid-rigging
    ,
    price-fixing
    and market-allocation.

  • To improve detection, the PCSF is:

    • Training agents on per se
      antitrust violations and other anticompetitive conduct to improve
      agents’ ability to spot antitrust violations;

    • Training industry participants via
      tradeshows and industry conferences on per se antitrust
      violations and other anticompetitive conduct to increase industry
      reporting via tips or
      applications to the leniency program
      ;

    • Obtaining and reviewing data from
      historical (and future) bids; and

    • Developing cross-agency database of
      allegations/concerns.


  • The PCSF believes these actions will
    not only increase detection, but will also deter conduct—a
    positive feedback loop to reduce antitrust violations. The more
    stakeholders that understand what are antitrust violations, the
    greater the threat of detection for those bad actors.


  • As reported here
    and noted in the press release announcing the strike force on
    November 5, 2019, the PCSF is focusing its efforts on 13 US
    Attorney Office (USAO) districts. However, more than 40 local,
    state and federal jurisdictions have since reached out to
    participate with the PCSF.

  • The PCSF will investigate any product
    market, and the PCSF is not focused on specific markets. The PCSF
    members noted, however, that investigations into one industry often
    yield parallel investigations into related or adjacent industries,
    particularly if the companies involved are active in multiple
    industries.

  • Publicity from the formation of the
    PCSF has already been credited with yielding several investigations
    via complaints—confirming that detection will only improve
    with the PCSF in place.

WHAT THIS MEANS:

  • The PCSF is focused on increasing its
    ability to detect antitrust violations across a broader cohort of
    government contractors because of the rapid increase in government
    procurement over the last five years. The investigators believe
    that this increase in spending has led to increased abuses. Because
    taxpayer money is at stake, the PCSF will be aggressive in
    investigating any abuses it detects or are brought to its
    attention.

  • We believe that particular interest
    should be paid to these developments by small- and medium-sized
    government contractors. While the PCSF will investigate any size
    fraud or antitrust violation, the task force members noted that
    larger government contractors tend to have robust training and
    mitigation programs to prevent the kinds of conduct that the PCSF
    is focused on eliminating.

  • The increased political focus on
    violations of the antitrust laws
    in all respects
    , along with the DOJ’s recent decision
    to consider effective antitrust compliance programs
    when
    charging, makes a strong business case for those in the government
    procurement space to review and revise current compliance programs
    or implement a compliance program if one is not already in
    place.

  • Auditing or implementing a compliance
    program is a prudent low-cost action item that gives stakeholders
    increased security that they are taking the proper steps to
    mitigate exposure. McDermott’s antitrust and government
    procurement groups can help companies with all facets of their
    compliance programs as they relate to government contracting.
    Specifically, we can provide an individualized assessment of your
    business and assist you with developing, instituting and
    maintaining compliance programs so that your company can
    concentrate on what is most important: competing effectively in the
    marketplace.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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