Volkswagen retains access to US public sector contracts after dieselgate probe

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WOLFSBURG, GERMANY - OCTOBER 21: The Volkswagen logo stands illuminated on an administrative building at the Volkswagen factory and company headquarters on October 21, 2015 in Wolfsburg, Germany. According to media reports a Volkswagen spokesman has acknowledged that the emissions cheating software the company installed in its EA 189 diesel motor in 11 million cars and light trucks worldwide might also be present in another diesel motor called the EA 228. The software the company deliberately installed manipulates diesel engine emissions results under testing conditions. Volkswagen faces investigations and fines in countries across the globe. (Photo by Sean Gallup/Getty Images)

Volkswagen will reportedly still be allowed to bid for public sector contracts in the US, after concerns a watchdog probe into its diesel emissions cheating scandal may result in a ban.

Instead of being excluded, Volkswagen will be made to install a second US monitor at its Wolfsburg headquarters in Germany, after an investigation by the UA Environmental Protection Agency (EPA) to keep access, according to German outlet Handelsblatt.

Read more: Volkswagen to cut thousands of jobs in €4bn modernisation drive

The company, which is the second-biggest car maker in the world behind Toyota, produces diesel engines for the US Navy via its Man Energy Solutions subsidiary.

But this had been thrown into doubt during the EPA’s investigation into its using illegal software to cheat emissions tests in 2015, triggering a global backlash against diesel engines, the so-called dieselgate scandal.

Volkswagen’s agreement with the EPA is said to come in exchange for a three-year monitoring process which is set to begin in the coming months.

City PM has approached Volkswagen for comment.

Separately, US court documents have shown that lawyers for owners of nearly 100,000 Volkswagen cars that had misleading fuel economy labels are claiming $26m (£21.2m) in legal fees.

Read more: Volkswagen and Ford strengthen ties by teaming up on electric and self-driving cars

Volkswagen agreed on Friday to a $96.5m settlement to reimburse 98,000 customers, with people who still own the vehicles eligible for lump-sum payments ranging from $518 to $2,332 per vehicle. But that settlement, which came after 15 months of negotiations, is separate to the new $26m request.

The dieselgate scandal has cost Volkswagen around €30bn in fines so far. Most recently, in May the firm set aside a further €5.5bn to pay off further costs.