The Justice Department is worried that its efforts to increase competition in the construction industry may backfire in some cases and reduce competition for highway and airport projects.
Assistant Attorney General William F. Baxter recently cautioned 13 state attorneys general as well as the general counsel of the U.S. Department of Transportation that the government's high-priority campaign against illegal price-fixing in the highway construction industry "may have unintended adverse consequences on competition for major construction projects."
The reason: under federal and state rules, the 124 companies and 147 individuals who have been found guilty of rigging bids for federal highway and airport construction projects could be barred from bidding in future projects financed by the states or federal government.
As a result, Baxter asked the state attorneys general to think carefully before barring guilty companies. "It would be ironic if competition were to be impaired because of additional sanctions derivative from our own enforcement efforts," Baxter said.
Justice Department officials say the letter was prompted by calls and letters from the state attorneys general and by a visit by representatives of the National Asphalt Pavement Association.
Since 1979 the Justice Department has been going after illegal bid-rigging and has convened grand juries in 17 states. So far, 174 cases have been brought in 14 states, most recently in Virginia and Maryland. Fines have totaled more than $35 million and jail sentences more than 36 years.
"I wish to make it clear that our concern with possible adverse competitive consequences of debarment should in no way be viewed as a signal that the department will investigate and prosecute bid-rigging conspiracies in the construction industry any less vigorously than it has in the past," Baxter said in releasing a copy of his letter.