Procurement Collusion Strike Force Defense Attorneys

In November 2019, the U.S. Department of Justice (DOJ) announced the formation of a new Procurement Collusion Strike Force tasked with targeting entities suspected of government contract and government program fraud.

For government contractors and entities that bill federal government programs such as Medicare and Tricare, the risk of being targeted in a federal fraud investigation is a persistent concern. The U.S. Department of Justice (DOJ) and other federal agencies routinely conduct investigations under the False Claims Act and various other statutes, as they attempt to cut down on the billions of dollars in fraudulent losses that the government sustains each year.

On November 5, 2019, the DOJ announced the formation of a new Procurement Collision Strike Force (PCSF) that will be on the front lines of the federal government’s fight against contract and program fraud, waste, and abuse. As stated by the DOJ, the Procurement Collision Strike Force will be, “focus[ed] on deterring, detecting, investigating and prosecuting antitrust crimes, such as bid-rigging conspiracies and related fraudulent schemes, which undermine competition in government procurement, grant and program funding.” The DOJ’s announcement goes on to state:

“The PCSF will lead a national effort to protect taxpayer-funded projects at the federal, state and local level from antitrust violations and related crimes, starting with a focus on 13 districts throughout the country.  Prosecutors . . . along with agents from the FBI and partner Offices of Inspector General, will work together to conduct outreach and training for procurement officials and government contractors on antitrust risks in the procurement process. In addition, the partnered prosecutors and investigators will jointly investigate and prosecute cases that result from their targeted outreach efforts.”

As noted in the quoted language from the DOJ’s press release, the Procurement Collision Strike Force will initially be focusing its enforcement efforts in 13 targeted jurisdictions across the country. These jurisdictions are:

• Central District of California (including Los Angeles, Orange County, Riverside County, San Bernardino County, San Luis Obispo County, Santa Barbara County, and Ventura County)
• Eastern District of California (including Bakersfield, Fresno, Redding, Sacramento, Redding, and Yosemite)
• District of Colorado (including Denver, Colorado Springs, Boulder, and all other cities)
• District of Columbia (including Washington D.C.)
• Southern District of Florida (including Miami, Fort Lauderdale, West Palm Beach, Fort Pierce, and Key West)
• Northern District of Georgia (including Atlanta, Gainesville, Newnan, and Rome)
• Northern District of Illinois (including Chicago and Rockford)
• Eastern District of Michigan (including Detroit, Ann Arbor, Bay City, Flint, and Port Huron)
• Southern District of New York (including New York City, Poughkeepsie, and White Plains)
• Southern District of Ohio (including Cincinnati, Columbus, and Dayton)
• Eastern District of Pennsylvania (including Philadelphia, Allentown, Reading, and Easton)
• Northern District of Texas (including Dallas, Abilene, Amarillo, Fort Worth, Lubbock, San Angelo, and Wichita Falls)
• Eastern District of Virginia (including Alexandria, Norfolk, Richmond, and Newport News)

The Procurement Collision Strike Force is a coordinated effort led by the DOJ and involving prosecutors and agents from various other federal, state, and local agencies. At the federal level, the agencies that will be working with the PCSF to combat government contract and government program fraud, waste, and abuse are:

• Department of Defense (DOD) Office of Inspector General (OIG)
• Federal Bureau of Investigation (FBI)
• General Services Administration (GSA) Office of Inspector General (OIG)
• U.S. Postal Service (USPS) Office of Inspector General (OIG)

MAPS: The Procurement Collusion Strike Force’s “Red Flags of Collusion”

The Procurement Collusion Strike Force differs from other recently-launched federal law enforcement initiatives (such as the Medicare Fraud Strike Force (MFSF) and the Prescription Interdiction and Litigation (PIL) Task Force) in that it is focusing its efforts primarily on offenses involving antitrust violations and other similar “collusive” forms of government fraud. In this vein, the PCSF website includes a link to a DOJ resource entitled, “Red Flags of Collusion,” which uses the acronym MAPS to identify the PCSF’s primary targets for enforcement activity.

As explained by the DOJ, MAPS stands for Market, Applications, Patterns, and Suspicious Behavior. “Red flags” that are likely to trigger PCSF scrutiny for government contractors, healthcare providers, and other program participants include:

Market

The DOJ takes the position that a particular contract award “may be the target of collusion” if one or more of the following factors are present:

• There are few bid competitors;
• A small group of major competitors controls a large share of the market; or,
• The contracted good or service is standardized such that the primary determining factor in procurement is price as opposed to quality and other competitive factors.

Applications

Similarities between competing bidders’ applications or proposals will typically face close scrutiny as well. In particular, the PCSF will be targeting government contractors in situations where:

• Proposals contain similar handwriting, typos, or mathematical errors;
• Proposals are sent from the same address or account;
• Proposals reflect that last-minute changes were made to alter price quotes; and,
• Metadata or other file properties show proposals were created or edited by a single entity.

Patterns

The DOJ has identified various patterns that tend to be indicative of bid collusion as well. For example, the PCSF is likely to pursue investigations in cases where:

• Competing companies rotate as the award winner over a serious of recurring contracts;
• Competing companies win the same or similar amounts of work over a serious of recurring contracts;
• One company always wins a particular contract regardless of competition;
• A winning bidder awards subcontracts to losing vendors or to vendors that withdrew their proposals; and,
• A reduced number of bidders submit proposals as compared to prior years.

Suspicious Behavior

In addition to the above “red flags,” the DOJ also indicates that the PCSF will be focusing its enforcement efforts on various other forms of “suspicious behavior” that appear to be indicative of collusion. These include:

• A company that lacks the ability to provide the goods or services requested in a bid submits a contract proposal.;
• A single company submits multiple proposals; and,
• A company representative makes statements indicating advance knowledge of a competitor’s prices or likelihood of winning the award.

Federal Defense Counsel for Government Contractors and Program Participants Targeted by the Procurement Collusion Strike Force

For construction contractors, defense contractors, healthcare providers, and other entities targeted by the Procurement Collusion Strike Force, it is critical to quickly gain an understanding of both why your business or practice is being targeted and what form of collusion is under investigation. Specific allegations can vary widely, from civil and criminal False Claims Act investigations based on the “red flags” listed above to Anti-Kickback Statute violations involving improper payments between healthcare providers.

But, regardless of your company’s industry, regardless of whether you have a government contract or bill the government under a federal program, and regardless of what you believe about the accuracy of any allegations against you, one thing is clear: If you are going to avoid severe ramifications, you need to engage experienced federal defense counsel promptly.

Our federal defense lawyers are available to represent clients nationwide in Procurement Collusion Strike Force investigations. Our experience includes handling DOJ, FBI, OIG, and other federal agency investigations as both prosecuting attorneys and as federal defense counsel. We have successfully defended government contractors, healthcare providers, and other clients in high-stakes investigations nationwide, including investigations involving other DOJ strike forces and task forces.

If your business or practice is being targeted by the PCSF, you could be at risk for a broad range of civil and criminal charges. Examples of federal statutes that may be implicated in collusion investigations involving government contracts and benefit programs include (but are not limited to):

• Anti-Kickback Statute
• False Claims Act
• Procurement Integrity Act
• Stark Law
• Truth-in-Negotiations Act (TINA)
• 18 U.S.C. § 371 (Conspiracy to Commit Offense or Defraud the United States)
• 18 U.S.C. § 641 (Embezzling or Stealing Public Money, Property, or Records)
• 18 U.S.C. § 666 (Theft or Bribery Concerning Programs Receiving Federal Funds)
• 18 U.S.C. § 1341 (Mail Fraud)
• 18 U.S.C. § 1343 (Wire Fraud)

When you contact our firm regarding a Procurement Collusion Strike Force investigation, our attorneys will promptly intervene in the investigation and begin communicating with PCSF personnel on your behalf. We will work quickly to discern what triggered the inquiry and what allegations are under investigation, and then we will execute a proactive and strategic defense focused on preventing charges from being filed. If you are being targeted by the PCSF, you do not have time to waste, and we encourage you to contact us immediately to speak with one of our federal defense attorneys in confidence.

Have you (or any member of your business or practice) been contacted by the Procurement Collusion Strike Force? Contact us 24/7 nationwide for a free and confidential case assessment.

Speak with a Federal Defense Lawyer about Your PCSF Investigation

To speak with a member of our federal defense team about your PCSF investigation, please call 888-680-1745or contact us online. We are able to provide effective defense representation for clients facing PCSF investigations nationwide.