Senator questions BofA contract

A U.S. senator is raising questions about a multimillion-dollar government contract awarded to Bank of America for work involving the federal prison system.

The letter from Sen. Chuck Grassley, a Republican from Iowa, comes after The Center for Public Integrity reported in a story last week that Bank of America has collected at least $76.3 million over the past 14 years from the contract awarded by the U.S. Treasury Department. The center, a nonprofit news organization, reported that the contract was awarded without a competitive bidding process.

According to the center's story, the contract has been amended 22 times in the past 14 years, growing from its initial $14.4 million value. The original deal called for the bank to manage federal inmates’ accounts and prison store inventory but has been expanded to include other services, including electronic money transfers, phone technology and e-messaging, according to the story.

Bank of America spokesman Bill Halldin declined to comment.

In a statement, a Treasury Department spokesperson said the department entered into the deal with Bank of America as it sought to create a "cashless" prison system at the request of the Bureau of Prisons. The deal expires May 31.

In his letter to Treasury Secretary Jack Lew, Grassley writes that the Treasury department's decision to repeatedly amend the contract rather than put it through a competitive-bidding process "raises significant questions."

"This original agreement, signed in 2000, has now been amended 22 times yet it has never been competitively bid and it is unclear how much money Bank of America has received from taxpayers and inmates as a result of this agreement," Grassley wrote.

"Government contracting rules require vendors to report credible evidence of fraud and conflicts of interests to the agency’s inspector general and the officer overseeing the contract," Grassley wrote. "It is concerning that these requirements do not apply to financial agency agreements such as the one with Bank of America."

According to the story, Bank of America and the Treasury designated subcontractors to perform at least some of the work. It is unclear how much of the $76.3 million has been paid to subcontractors. Halldin referred all questions about the contract to the Treasury Department.