Justice Launches “Antitrust Division Recovery Initiative” Web Site
On April 14, 2009, the Department of Justice signaled that it is devoting “significant resources” to the detection and prosecution of collusion or other criminal violations of the antitrust laws that may be committed in connection with Recovery Act funds. The Antitrust Division notes on its new Recovery Initiative Web site that, “[t]he potential risk of fraud and collusion increases dramatically when large blocks of funds, such as those associated with the Recovery Act, are quickly disbursed.” In fact, Earl Devaney, the head of the government’s Recovery Accountability and Transparency Board, recently estimated that as much as 7 percent—approximately $55 billion—of Recovery Act funds may be lost to fraud.
Because of this perceived increased risk of criminal conduct, the Division is providing training to help inspectors general and other investigative arms of agencies receiving funds detect and prevent collusion and other types of procurement fraud. To that end, the Division has created the “Red Flags of Collusion” checklist to use as a guidepost for the IGs to detect anticompetitive conduct. The Red Flags of Collusion are set forth in a four-part “MAPS” (market, applications, patterns and suspicious behavior) analysis on the Web site. Under each step of the analysis, the Division sets forth attributes of a procurement or grant award action that would suggest a greater likelihood of collusion, such as (M) few vendors, (A) common sources for two or more proposals, (P) use of losing or withdrawn bidders as subcontractors to winning bidders and (S) submission of multiple proposals.
While designed to help government inspectors general prevent or detect fraud, companies seeking to supply services or procure grant awards in connection with Recovery Act funds can apply MAPS to their individual circumstances as part of a general antitrust compliance effort to help identify whether they are participating in a procurement or grant award action that may involve or suggest the possibility of collusion. While prevention of fraud is one goal of the Division’s effort, the Division made clear that if prevention efforts fail, the Division will “investigate and prosecute any criminal conduct directed at thwarting competition” for Recovery Act funds.
The Antitrust Division’s Recovery Initiative Web site can be found here.