Government Contractors Beware: Teaming Agreements in DOJ Antitrust Crosshairs

The U.S. Department of Justice, Antitrust Division (DOJ) recently announced a criminal indictment against Timothy J. Leiweke, co-founder and CEO of a sports and entertainment company, for allegedly conspiring with a competitor to rig the bidding for the development, operation, and management of an arena at the University of Texas at Austin. Relatedly, Leiweke’s company and its competitor agreed to pay $15 million and $1.5 million in penalties, respectively, and received non-prosecution agreements from DOJ. The charges highlight potential antitrust risks involving teaming efforts in public procurement.

According to DOJ, Leiweke allegedly agreed with his company’s competitor that, instead of submitting an independent bid, the competitor would join his company’s bid and receive subcontracts in return. While DOJ maintains that Leiweke “rigged a bidding process to benefit his own company and deprived a public university and taxpayers of the benefits of competitive bidding,” a spokesman for Leiweke stated that DOJ’s “allegations blatantly ignore established legal precedent and seek to criminalize common teaming efforts that are proven to enhance competition and benefit the public.”

Under antitrust law, legitimate competitor collaborations are analyzed under the “rule of reason” because they may be pro-competitive. To determine liability under the rule of reason, courts conduct a fact-specific balancing test, weighing the pro-competitive benefits of a practice against its anti-competitive harms. DOJ does not prosecute rule-of-reason cases criminally. The Federal Acquisition Regulation, under Subpart 9.6, likewise acknowledges that “contractor team agreements may be desirable” because they allow the teaming participants to “[c]omplement each other’s unique capabilities” and “[o]ffer the government the best combination of performance, cost, and delivery,” while also providing that “[n]othing in this subpart authorizes contractor team arrangements in violation of antitrust statutes.”

In complex business relationships, the line between legitimate collaboration and anti-competitive conduct may not always be clear. For example, in a DOJ case previously discussed on Enforcement Edge, the Fourth Circuit reversed a conviction on bid-rigging charges because the alleged conduct involved two companies that were in a legitimate relationship as manufacturer and distributor.

There is even less clarity on this issue after the withdrawal in late 2024 of the DOJ-Federal Trade Commission Antitrust Guidelines for Collaborations Among Competitors, which provided guidance to companies regarding the antitrust risks involved in competitor collaborations. Without that guidance, and in light of DOJ’s seemingly aggressive approach to teaming efforts, companies should develop compliance policies and training specifically addressing teaming efforts, and should seek experienced antitrust counsel when teaming with potential competitors.

For questions about criminal antitrust issues or antitrust compliance, please reach out to the authors or any of their colleagues in Arnold & Porter’s Antitrust/Competition or White Collar Defense & Investigations practice groups.

© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.