ICYMI: New DOJ Collusion Guidance

In news that may have largely gone unnoticed, the U.S. Department of Justice (DOJ) formed the Procurement Collusion Strike Force (PCSF) in November 2019. An interagency partnership comprised of prosecutors from the DOJ’s Antitrust Division and U.S. Attorney’s Offices, as well as investigators from the FBI, Department of Defense, U.S. Postal Service and other partner federal Offices of Inspector General, the PCSF will focus on “deterring, detecting, investigating and prosecuting antitrust crimes … which undermine competition in government procurement, grant, and program funding.”

While the scope of the PCSF is limited to companies doing business with the U.S. government, all organizations can look for the schemes and red flags outlined in the DOJ guidance. The PCSF also identifies on its website a simple four-part analysis – MAPS – that can be used to prevent and detect collusion.

• Market - “Who is in the market for this award?”
  • The award may be the target of collusion if there are few vendors in the market that offer the good or service; there is a small group of major vendors that control a large share of the market; and/or the good or service is standardized, so that the determining factor in the award is price, rather than other competitive factors.
• Applications - “Are there similarities between vendor applications or proposals?”
  • The award may be the target of collusion if two or more proposals contain similar handwriting, typos or mathematical errors; two or more proposals are sent from the same mailing address, email address, fax number or overnight courier account number; two or more proposals reflect that last-minute changes were made to alter price quotes; and/or the document properties of two or more electronic proposals show that the proposals were created or edited by one vendor.
• Patterns - “Have patterns developed among competing vendors?”
  • The award may be the target of collusion if, over a series of awards, competing vendors rotate as the award winner; routine competing vendors win the same or similar amounts of work; one vendor always wins, regardless of competition; the vendor that wins the award subcontracts work to losing vendors or to vendors that withdrew their proposals or refused to submit proposals; and/or as compared with prior awards, a smaller number of vendors submit proposals for the current award.
• Suspicious Behavior - "Have vendors demonstrated behavior that suggests they worked together on the award?”
  • The award may be the target of collusion if a vendor submits a proposal for a procurement or grant award and you know that the vendor lacks the ability to provide the goods or services requested; a vendor brings multiple proposals to an in-person procurement or grant process or submits multiple proposals; and/or a vendor makes statements on the phone or by email indicating advance knowledge of a competitor's prices or likelihood of winning the award.

More information, including the reporting tool, can be found at the DOJ’s PCSF website.

The professionals at Schneider Downs have extensive experience investigating many types of fraud schemes, such as collusion, and developing processes and controls to mitigate potential schemes. If you have questions or concerns about detecting or deterring fraud, or suspect your organization may be the victim of a collusion scheme, contact Joel Rosenthal at [email protected] , Tom Pratt at [email protected] or Brian Webster at [email protected].