The board of Long Beach Transit – without opposition from BYD Motors Inc. – voted on Thursday to cancel the transit agency's contract for 10 of the Chinese company’s electric buses.
The Federal Transit Administration withdrew $9.6 million in funding for the $12.1-million project, saying Shenzhen-based BYD, which has its North American headquarters in Los Angeles and assembly plants in Lancaster, had erred when making its initial bid.
BYD Motors said it decided not to fight the contract termination as a “good will” gesture and expected to win the contract again when it is rebid later this year.
“We are confident that we will prevail in any competitive re-bid in the future for the same reason we prevailed last year: our superior technology,” said Chief Executive Stella Li, in a statement.
FTA officials recently informed the transit agency that BYD should not have been awarded the contract because the company had not prequalified itself to participate in contracts that receive federal funds. The manufacturer should have submitted a percentage goal for the purchases it would make from disadvantaged businesses before making its bid, not after winning the contract.
Li said the omission was honest error on the Chinese company’s part, but couldn’t resist taking a dig at regulators for waiting so long to point out the problem.
“It is surprising that the FTA waited nine months to withdraw funding from this contract – after BYD spent millions of dollars – due to what can only fairly be described as a technical error that in no way casts doubt on our deep commitment to purchase from disadvantaged businesses,” she said.
Long Beach Transit expects it will take up to three months to rebid the contract, but BYD said any delays in resuming work on the buses, should it win, would not affect its hiring plans in the region. Among BYD’s U.S. contracts is one with Los Angeles County Metropolitan Transportation Authority to provide up to 25 similar buses. It also is in the process of converting the Antelope Valley Transit Authority fleet to all-electric buses.
Between Los Angeles and Lancaster, the company has created 60 new jobs over the past two years, Li said. It expects to increase that to 100 positions by the end of this year, and to 200 by the end of 2015.