Agency defends 'clunkers' contracts
Transportation spokeswoman says there was no time to competitively bid contracts to administer the program.
The Transportation Department is defending its handling of the "cash for clunkers" program in response to queries by Senate Finance ranking member Charles Grassley, R-Iowa, arguing it had no time to competitively bid contracts to administer the program.
The overwhelming response "required the DOT to rapidly expand capacity in order to process more than 670,000 dealer transactions made in less than 30 days," Transportation spokeswoman Olivia Alair said Wednesday. "The DOT took measures to prevent fraud, waste and abuse. While there was no time to allow vendors to competitively bid for the processing work, those selected received contracts based on other recent competitively bid government contracts for similar work."
Grassley wrote to Transportation Secretary Ray LaHood Tuesday, asking how much had been spent on administrative costs and how the agency was spending that money.
Transportation estimates it has spent about $77 million on those costs and does not expect them to exceed $100 million, or about 3 percent of the $3 billion program. Grassley Thursday said he could consider the program a success in that it boosted sales, but added: "Was it a success for the amount of money that it cost the taxpayers not going into the federal Treasury? I guess the jury would still be out on that."