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Guilty Plea in Antitrust Bid-Rigging Case, DOJ Wants To Hear From Whistleblowers Who Have Information About Procurement Fraud Schemes

Posted  May 14, 2024

The Department of Justice recently announced that a former owner of a government contractor that provided services to U.S. Forest Service pleaded guilty to violations of the Sherman Antitrust Act involving bid rigging, territory allocation, and conspiracy to monopolize.

The plea agreement identifies two overarching antitrust conspiracies at issue in this case. The first was “[a] bid-rigging and territorial allocation … conspiracy to suppress or eliminate competition for fuel truck contracts with the U.S. Forest Service….” (Footnote omitted). The plea agreement provides specific details about this bid-rigging and territory-allocation claims: The defendant and his co-defendant “agreed on the bids (also known as ‘quotes’) they would submit to the U.S. Forest Service in order to (1) avoid bidding against each other with respect to certain dispatch centers or (2) deliberately bid at a higher or lower daily rate to determine who would win priority on a dispatch center’s dispatch priority list, which determined who would first receive business from the U.S. Forest Service (and other federal agencies) in the event of a wildfire in a specific geographic area.”

The second overarching conspiracy that the plea agreement identifies is a “conspiracy to monopolize the market for wildfire fuel truck services in certain dispatch centers of the U.S. Forest Service’s Great Basin wildfire dispatch region….”  As to this one, the plea agreement cites efforts to prevent other vendors from competing, including (1) an “attempt[] to convince [a] vendor not to compete with the Defendant and [his co-defendant] in providing fuel truck services”; (2) a proposal “that the competing vendor rig bids with him, following the example of how the Defendant and [his co-defendant] rigged bids each year”; and (3) “agree[ing] to rig bids for the purpose of de-prioritizing two competing fuel truck vendors on dispatch priority lists and thus excluding them from the market.”

The government has made a point of going after government contractors who engage in antitrust violations, such as bid rigging and collusion. Indeed, the government’s Procurement Collusion Strike Force is dedicated to prosecuting such anticompetitive conduct. Antitrust violations in the government procurement context harm the government and, ultimately, taxpayers, by increasing the government’s costs or reducing the quantity or quality of the goods and services provided. In addition, such anticompetitive schemes can also harm other companies that are trying to compete fairly for the government contract. In the words of the U.S. Attorney for the District of Idaho, “When contractors collude rather than compete, they wrong the public and honest competitors who submitted bids fair and square.”

Big rigging, like other antitrust arrangements, are often secretive agreements. Whistleblowers can play a key role in uncovering the type of misconduct. The DOJ’s press release recognizes this, asking that “[a]nyone with information about this investigation or other procurement fraud schemes should notify the [Procurement Collusion Strike Force] at www.justice.gov/atr/webform/pcsf-citizen-complaint.”  

If you have any information of potential antitrust violations, such as bid-rigging schemes, that directly impact government purchases or procurement, or Medicare/Medicaid, and would like to speak to an experienced member of the Constantine Cannon whistleblower lawyer team, please do not hesitate to reach out and contact us for a free and confidential consult.