Legal Alert

DOJ Prepared to Enforce Coronavirus-Related Procurement Violations

March 23, 2020

As the federal government responds to the coronavirus pandemic, its purchases of goods and services are increasing. Organizations that compete for government contracts and program funding should be prepared for increased scrutiny by the DOJ’s recently launched Procurement Collusion Strike Force (PCSF).

Formed in November 2019, the PCSF identifies, investigates, and prosecutes antitrust crimes that undermine competition in government procurement, grant, and program funding. Its goal: to protect American taxpayers and the federal government from waste and abuse.

Although it was launched before the pandemic began, it is reasonable to assume the PCSF will take an especially active role in investigating allegations of fraud and bid-rigging in connection with the coronavirus response. The PCSF is an interagency partnership between prosecutors from DOJ’s Antitrust Division, prosecutors from 13 U.S. Attorneys’ Offices, and investigators from the FBI, the Department of Defense Office of Inspector General, the U.S. Postal Service Office of Inspector General, and other federal partners.

The PCSF is training and educating procurement officials nationwide to recognize and report suspicious conduct in procurement, grant, and program funding processes, and it is aggressively investigating and prosecuting those who violate antitrust laws in connection with federal contracts. Since it announced the formation of the PCSF, the DOJ has brought at least 13 criminal antitrust cases nationwide, including two indictments in the Eastern District of Pennsylvania (EDPA), where the PCSF has partnered with the United States Attorney’s Office.

While DOJ’s Antitrust Division has long been active in prosecuting large international and domestic price-fixing conspiracies targeting consumers, the formation of the PCSF signals the shifting of law-enforcement resources to cases where the federal government is the victim of the conspiracy.

It also signals that DOJ is dedicating resources to aggressively investigate and prosecute antitrust violations in connection with government contracting, especially in the areas like the EDPA. It is imperative that organizations and their employees competing for government contracts, grants and program funding are prepared for this enforcement emphasis and have an understanding of the degree to which they may legally cooperate, engage, or share information with other market actors to avoid violating antitrust laws.

Attorneys in our Antitrust and Competition Group counsel companies, as well as key employees like salesforces and those engaged in supply chain activities, in the parameters of competition law. Our preventive counseling guides clients in areas such as product pricing, discounts, distribution arrangements.

Copyright © 2020 by Ballard Spahr LLP.
(No claim to original U.S. government material.)

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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

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