Plans by the California city of Long Beach to purchase BYD electric transit buses has hit another speed bump.
The Federal Transit Administration (FTA) may block the purchase of the Chinese company's buses, the Long Beach Press-Telegram reports (via ChargedEVs).
The Press-Telegram discovered letters from the FTA to Long Beach Transit, saying that BYD was not eligible to build buses for the city when Long Beach Transit board members approved its contract in March 2013.
At the time of its bid, BYD could not provide documentation showing its compliance with the Disadvantaged Business Enterprise Program, which requires contractors that receive Federal money to give minority-owned businesses a chance at the work.
Although BYD is eligible today for the federally-funded bus contract, it wasn't at the time the contract was signed--which makes the whole deal suspect in the eyes of Federal regulators.
Now, the Federal government is offering Long Beach two choices: cancel the current $12.1-million contract with BYD and start the bidding process over again, or keep BYD and lose funding from Washington.
Long Beach Transit had already secured $9.6 million in grant money at the time of the board's vote on the BYD contract last year, although the FTA documents say regulators warned the transit agency that BYD would not be eligible.
A BYD spokesperson told the Press-Telegram that the company believes it is in compliance with all Federal requirements.
Long Beach Transit has not commented on the FTA letters, but an agency statement said it would give BYD time to resolve the issue.
This isn't the first legal problem BYD has encountered as it attempts to build and sell electric buses in the U.S.
The company was fined last fall for low wages at its California plant, although the issue was later resolved.
While over 1,000 buses have been built for Chinese cities--and one tested in Quebec--none have been placed in service in the U.S. so far.
In addition to Long Beach's order for 15 buses, Los Angeles has agreed to test five buses and buy 20 more if the city's transit agency finds them satisfactory.
BYD turned its effort toward selling electric buses after it missed numerous deadlines in multiple attempts to sell its e6 electric crossover in the U.S.