In the form of a civil antitrust lawsuit made public on Wednesday, the DOJ is asserting that the acquisition violates Section 1 of the Sherman Act and Section 7 of the Clayton Act, in effect lessening competition for a contract from the National Security Agency that was previously contested between the two companies.
Assistant Attorney General Jonathan Kanter of the Justice Department’s antitrust division commented that the acquisition deal and the respective transaction are in conflict with national antitrust laws.
“Booz Allen’s agreement to acquire EverWatch imperils competition in a market that is vital to our national security,” Kanter continued.
It is the DOJ’s belief that due to the timing of Booz Allen’s acquisition of EverWatch, which came directly before the NSA began soliciting proposal requests for a contract calling for operational modeling and simulation services, the former company is attempting to deflate competition in the procurement process.
The lawsuit alleges that the potentially strategic merger of the two companies creates an intentional monopoly bidder. The DOJ is arguing that the transaction is not compliant with Section 1 of the Sherman Act because after the merger, the two organizations had less motivation to place substantially competitive bids.
Booz Allen spokesperson Jessica Klenk refuted these claims in a statement released Thursday, positing that the two companies’ combined resources and 500 added team members would uphold national security principles as well as bolster rather than detract from the “highly competitive” government contracting industry.
“The transaction would accelerate technology development cycles and enable faster delivery of classified software development and analytics for national security clients,” Klenk added.
Onlookers have wondered what the precedent for the lawsuit is and where it fits into the history and future of antitrust regulations.