4 Antitrust Risk Areas To Watch For Government Contractors

• Published date: 21 October 2021
• Subject Matter: Anti-trust/Competition Law, Government, Public Sector, Antitrust, EU Competition , Government Contracts, Procurement & PPP
• Law Firm: Arnold & Porter
• Author: Mr Andre Geverola and Lori P. Taubman

Upon passage, the Infrastructure Investment and Jobs Act would break ground on $550 billion in new infrastructure spending, including $110 billion of investment in roads, bridges and major projects; $65 billion for broadband deployment; and $21 billion for environmental remediation.¹

This anticipated spending provides significant opportunities for government contractors. But companies seeking government contracts should be aware that there is a new cop walking this beat. Two years ago, the U.S. Department of Justice launched the Procurement Collusion Strike Force, an interagency partnership that builds on the DOJ Antitrust Division's expertise in prosecuting anti-competitive conduct involving government procurement.

This article examines the division's past enforcement in the act's key spending areas, along with the PCSF's current efforts. With this past as a guide to future enforcement, we identify four risk areas to watch: joint bidding, dual distribution, legal certifications, and hiring and compensation.

Given the increased likelihood of detection and stiff penalties for antitrust violations, companies seeking government contracts should ensure that their compliance programs detect and prevent potential anti-competitive conduct in these risk areas.

Past Division Enforcement in Key Spending Areas

The division has a long history of enforcement actions against companies and individuals involved in infrastructure projects. For example, concrete is an essential component of many construction projects, including road and bridge projects managed by government agencies.

Take, for example, the Sept. 28 case U.S. v. Clarence Olson, in which a Minnesota-based contractor pleaded guilty in the U.S. District Court for the District of Minnesota to charges that he conspired to rig bids for municipal concrete repair and construction contracts.²

Also take, for example the Jan. 4 case U.S. v. Argos USA LLC, in which the Georgia-based ready-mix concrete company agreed to pay a $20 million criminal penalty as part of a deferred prosecution agreement to resolve charges in the U.S. District Court for the Southern District of Georgia that it violated the Sherman Act.³

In addition, in the 2020 case U.S. v. Evans Concrete LLC, the Georgia-based concrete supplier and four individuals were indicted for the same alleged conspiracy.⁴

These recent cases continue a trend of Antitrust Division enforcement in this industry. Take for example, 2011's U.S. v. VandeBrake in the U.S. District Court for the Northern District of Iowa. The division prosecuted an Iowa-based conspiracy to fix prices and rig bids for ready-mix concrete.⁵

As part of that investigation, one individual was sentenced to 48 months in prison.⁶ In sentencing the defendant, U.S. District Judge Mark Bennett acknowledged the "unique ease and opportunity that his industry, concrete sales, gave him in establishing a concrete cartel."⁷

This case followed the 2005 U.S. v. Irving Materials Inc. prosecution in the U.S. District Court for the Southern District of Indiana, of a concrete conspiracy based in that state, where one company was fined $29 million, which at the time was the largest criminal fine...