Director Daniel Glad of the Justice Department’s Procurement Collusion Strike Force Delivers Remarks to the National Association of State Procurement Officials’ 10th Annual Law Institute

Remarks as Prepared for Delivery
I am honored to speak once again at the National Association of State Procurement Officials’ Law Institute.

As noted in that very kind introduction, I am the Director of the Procurement Collusion Strike Force at the U.

S.

Department of Justice.

And as you hear those words, you may be reminded of the Yogi Berra quip: “It’s like déjà vu all over again.

”[i] Because I have returned to talk about infrastructure, collusion risks and the ways we can work together.

I too feel that sense of déjà vu, all over again.

It was two years ago, at the National Association of State Procurement Officials (NASPO) Law Institute, when, the night before I was scheduled to speak with you, the President signed a bill into law — the Bipartisan Infrastructure Law, also known as the Infrastructure Investment and Jobs Act (IIJA).

And I will confess that I had to scrap much of what I had prepared to say in order to address the breaking news.

Luckily, no such signing ceremonies happened overnight this time, and I can stick to my prepared remarks.

I must confess I am humbled to find myself in a room full of real procurement experts.

You all play a key role in delivering value to the people we are sworn to serve.

Although I am the head of a strike force that has procurement in its name, I must be clear about one thing — I am no procurement expert.

I am, by training and experience, a criminal prosecutor, one whose practice has, over the years, specialized in a particular set of crimes that target and victimize governmental units when they go into the market to buy goods and services.

And although you are the true procurement experts, I know we have at least one thing in common: our shared and collective goal of ensuring that every tax dollar designated for public spending goes into public projects and not into fraudsters’ pockets.

Therefore, today I will try to limit myself to those areas where I am not in too deep of water.

I will describe the work the Procurement Collusion Strike Force (PCSF) has done over its first few years.

In fact, we are celebrating our fourth anniversary next week in Washington.

I also want to offer some thoughts on how you — procurement professionals and lawyers from offices of general counsels and attorneys general — can help address the collusion risks that have undoubtedly grown since the last time we were together.

In fact, addressing the risks is the very reason the Department of Justice created the PCSF in fall 2019.

We knew from our experience as investigators and prosecutors that criminal conspirators have long targeted government spending on goods and services.

The governments that suffer are victims of economic crime — a form of fraud in the theft of tax dollars.

And ultimately, the taxpayers are victimized.

These economic crimes can have a devastating effect not just on the public fisc, but on the economy more broadly.

To put some number on it, governments around the world pay 20% more because of bid rigging, price fixing, and other collusive schemes.

[ii] 20% — imagine what your state could do for its people if it didn’t lose 20% to collusion.

This risk and the resulting harm are why my colleagues and I exist — using the antitrust laws and other federal criminal statutes to protect competition and encourage a fair fight in the marketplace.

I am proud of the work we have done.

As I think back on our first four years, I am in awe of all that my colleagues have been able to do.

We have shown truly impressive results, in a short time and during a pandemic.

The PCSF has expanded, twice, and we now have teams in 22 districts throughout the country, consisting of prosecutors and representatives from law enforcement — federal, state and local — including those belonging to our 11 national partners.

Together, including in cooperation with state attorneys general, we have reached thousands — more than 30,000 – agents, auditors, analysts and procurement officials and professionals, as well as those in the private sector, seeking to deter crime through education and awareness.

Indeed, I wish our job were done there.

However, to paraphrase James Madison, humans are no angels.

[iii] So long as no amount of moral — or legal — education can fully eradicate human vice, law enforcement will have a job to do.

Since the PCSF’s founding, we have done that job.

To take a few examples:

A bid-rigging and bribery scheme that targeted construction projects at California’s Department of Transportation;[iv]
A wire-fraud scheme that targeted auctions for vehicles at the New York M.

T.

A.

;
A years-long bid-rigging and fraud conspiracy involving more than 300 contracts with the state of North Carolina;[v] and
An attempt to carve up the market for publicly funded highway repairs in Montana, Wyoming, South Dakota and Nebraska.

[vi]

As you might notice, all of those examples are where state or local governments were the victims of the schemes, making them especially relevant to you.

And all of those cases involved agencies that, directly or indirectly, receive federal funding.

This leads me to the transformative, albeit looming, federal funding of IIJA, which promises $1.

2 trillion in spending over the next several years and could, if not addressed, leave up to $240 billion in funding — that’s 20% of overall IIJA spending — at risk.

To date, over 20,000 projects have been awarded funding from IIJA.

They range from repaving roads and water system upgrades to massive bridge and transit projects.

[vii] Our host city, New Orleans, will spend $71 million to improve public transit and purchase zero-emissions vehicles, $24 million to build the Downtown Transit Center, and $25 million to construct two ferry boats.

[viii] The state of Louisiana is expected to receive IIJA funding for clean water, $231 million; broadband expansion, $1.

4 billion; and clean energy, $443 million; to name just a few categories.

To meet this moment, the DOJ and the PCSF are dedicating more resources and resharpening our focus.

Last year, the PCSF expanded to include four additional national law enforcement partners that have critical oversight roles for IIJA spending, as well as spending contemplated by the Inflation Reduction Act of 2022 (the IRA) and the Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (the CHIPS Act).

[ix] We have also added resources, promoting Sandra Talbott to Deputy Director, Michael Sawers to Assistant Deputy Director for Federal Spending, Bryan Serino to Assistant Deputy Director for PCSF: Global, and Jamie Collins to Program Manager.

These talented professionals, working together with prosecutors and paralegals from the Antitrust Division and the U.

S.

Attorneys Offices, are redoubling our collaborative efforts across the law enforcement community.

We are looking for new ways to join forces with our partners and any other agency looking to root out fraud and collusion in the procurement process.

We are conducting proactive investigations and taking aggressive investigative steps.

We are well positioned for continued success in our fifth year.

But we will need your help.

We will need partners — new and existing — in this fight against collusion, bid rigging and related crimes that threaten to subvert the competitive process and put at risk the opportunity to improve and transform infrastructure in the United States.

While it may be déjà vu all over again, the department, the Strike Force and I are asking for your help.

We recognize you are busy and that you are trying to do more with less.

You have dedicated your careers to, and are now leaders at, the offices and agencies responsible for obtaining the goods and services that governmental units need to function.

I know that much of the pressure you feel is to get the project done on time, under budget, and to spec.

I suspect it is on those metrics that you and your teams are evaluated by the public, the press and elected officials.

I want to suggest one additional metric for evaluation — detection of bid rigging and collusion.

Your teams are on the front lines of detection and are often in the best position to observe these schemes as they develop.

You are best positioned to spot red flags and report them.

Procurement professionals play a key role in the prevention, detection, investigation and prosecution of these crimes.

If your agency does not do so already, I encourage you to make this role explicit.

Make this part of the work plans and performance reviews for your front-line staff and for management.

Reward these efforts.

I am not alone in this suggestion — an international NGO has suggested that procurement agencies “[c]onsider adequate incentives for procurement officials to prevent and detect bid rigging, such as an explicit inclusion of prevention and detection of bid rigging among the duties and training of procurement officials and rewarding the successful detection of anti-competitive practices in the professional performance evaluation of procurement officials.

”[x]
Thus, I am asking that if your staffs see something, that you empower them, encourage them and incentivize them to say something internally.

And then report it to the PCSF.

We do not need full, unequivocal proof of a crime to accept a lead or open an investigation.

We need and want your tips and leads.

And in exchange, we vow to investigate with every justifiable resource at our disposal.

In that partnership, we will send a message to the public, and to fraudsters, that government programs are not easy targets.

We can, together, tell fraudsters that they pilfer government programs at their peril.

I look forward to our discussion a