Justice Department Announces ‘Strike Force’ to Combat Procurement Crimes

The Justice Department announced on Tuesday the creation of a new interagency partnership to combat antitrust and procurement crimes.

The Procurement Collusion Strike Force will “deter, detect, investigate, and prosecute antitrust crimes and related criminal schemes,” said Assistant Attorney General Makan Delrahim at a press conference. The strike force will use a “district-based task force organization model” to facilitate cooperation between the Justice Department’s Antitrust Division, 13 Attorneys’ Offices, FBI and inspector general offices for Defense and Justice Departments, General Services Administration and U.S. Postal Service. 

“When government contractors collude with each other to rig bids for government contracts at the federal, state, or local level, it leads to artificially higher prices for those goods or services.  When the government has to pay those artificially higher prices, all American taxpayers are paying for it,” said Deputy Attorney General Jeffrey Rosen at the press conference. “Strike Force will better inform federal, state, and local government procurement communities about these criminal activities and how to detect and report them.”

Delrahim said many of the Antitrust Division’s open investigations are related to procurement crimes. The federal government spent over $550 billion on contracts for goods and services last year, about 40% of all discretionary spending, he said. Any overcharge from illegal practices can cause “significant economic harm” to taxpayers and the government, he said.

The strike force will use data analytics to identify possible instances of collusion in government procurement. The website, now live, has antitrust training materials, legal resources and a complaint form to report suspicious activity. 

The Justice Department noted that in late 2018 and early 2019 it prosecuted five South Korean oil companies for bid-rigging contracts to supply U.S. military bases with fuel. The strike force will build on this type of work. 

Given the recent increase in bid-rigging cases, representatives from Hogan Lovells, an international law firm, wrote that the strike force shows that the department is “taking clear and visible strides to pursue these cases” and “putting significant resources toward this effort.”