DOJ’s Antitrust Division has been relatively quiet in prosecuting criminal cartel or bid-rigging cases. Since 2015, the Antitrust Division’s criminal enforcement has fallen from the billions in penalties each year to the lower hundreds of millions. Most of this may reflect the end of the large, Japanese auto supplier investigation. While the Leniency Program was a significant source of enforcement actions, it appears the Program has dwindled in first-in applicants. For now, while criminal enforcement is a significant risk in the United States, the enforcement picture remains cloudy.
In a recent case, the Antitrust Division announced the indictment of an Oklahoma highway run off contracting business, an executive and an employee for their involvement in an illegal bid-rigging and market allocation conspiracy involving over $100 million in publicly funded construction contracts in the state.
The indictment charges Sioux Erosion Control, Inc., its vice president and part owner, Dale Briscoe and its estimator, Randall David Shelton with a conspiracy to violate Section 1 of the Sherman Act. The defendants conspired with four other individuals, who already have plead guilty and agreed to testify at trial, to raise and maintain prices on contract bids to provide solid slab sodding on government-funded highway projects. One of the cooperating witnesses is a former employee at Sioux Erosion.
During the period 2017 to 2023, the conspirators targeted over $100 million in publicly-funded transportation construction contracts in Oklahoma. Erosion control products and services, including sod, are used to control runoff of soil or rock on highway construction projects. The defendants and their co-conspirators agreed to divide up contracts across different areas in Oklahoma and rigged bids by submitted higher-priced bids or refusing to participate in a bidding tender.
Biscoe, Shelton and Sioux are charged with a violation of Section 1 of the Sherman Act. The maximum penalty for individuals is 10 years in prison and a $1 million criminal fine. The maximum penalty for corporations is a $100 million criminal fine.
The indictment is the product of the work of the Procurement Collusion Strike Force, which was launched in 2019 to focus on protecting competition in government procurement, grant, and program funding at all levels of government—Federal, state, and local. The PCSF is comprised of the Antitrust Division of the U.S. Department of Justice, multiple U.S. Attorneys’ Offices around the country, the Federal Bureau of Investigation (FBI), and the Inspectors General for multiple Federal agencies.
The PCSF has two targeted initiatives. The first is the Data Analytics Project, which the PCSF launched in 2020 to facilitate collaboration across the law enforcement community. The goal of this interagency collaboration is to develop and use data analytics to identify signs of potential collusion in government procurement data for further investigation. The second is PCSF: Global, which has three closely related goals: to deter misconduct impacting U.S. taxpayer dollars spent overseas, to generate and prosecute international cartel cases impacting U.S. government interests overseas, and to continue to strengthen relationships with key competition agencies around the world.
