The Department of Defense is proposing to change the Defense Federal Acquisition Regulations (DFARS) to make clear certain kinds of exclusive teaming arrangements by defense contractors may be evidence of violations of antitrust laws.  DFARS will define “exclusive teaming arrangements” to mean “two or more companies, agree, in writing, or other means to team together on a procurement and further agree not to team with any other competitors on that procurement.” It will add to DFARS 203.303 the statement that violations of “antitrust law” may exist if efforts to eliminate exclusive arrangements are not successful.

The proposed rule changes the Under Secretary of Defense for Acquisition, Technology and Logistics Jacque Gansler’s internal guidance issued last January identifying concerns that teaming arrangements are prohibiting “robust competition” and directed regulatory language be developed.  DCAA, in March, issued guidance implementing Gansler’s memo instructing auditors to follow procedures similar to suspicions of fraud, corruption or unlawful activity when they encountered exclusive teaming arrangements.  Industry strongly objected to DCAA’s association of teaming arrangements with fraud and unlawful activity, forcing them to revise their guidance to state when anti-competitive exclusive arrangements cannot be resolved the matter should be turned over to DCAA headquarters general counsel.

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