Long Beach Transit’s effort to buy 10 electric buses from BYD is “currently on hold” as a result of federal authorities’ contention that the bus manufacturer was out of compliance with contracting rules intended to aid minority and female business owners when the firm won its contract last year.
“Until this item is resolved, the project has been placed on hold,” concludes a brief report from Long Beach Transit’s administration to its board members. The report is included with the agenda for Monday’s transit board meeting.
The project’s $14 million budget was to be financed by $9.6 million in grant dollars from the Federal Transportation Administration along with Proposition 1B bond revenues and $700,000 in grant money from the Port of Long Beach’s emissions reduction program.
BYD has since achieved compliance with the rules on women and minorities. But the FTA asserts that because BYD was out of compliance when it won the contract, Long Beach Transit must now pay for the buses itself or reopen the contract to new bidding.
Another possibility would be for either BYD or the agency to file for a waiver, which had not been done as of Wednesday evening, a spokesperson said.
The brevity of the report contrasts with previous agenda items that were longer and detailed obstacles affecting the project, such as the recent delay caused by a difference of opinion over whether it made more sense to test a bus built in China or at BYD’s assembly plant in Lancaster.
In that case, federal officials decided last month to stick with the Chinese-built bus that was initially submitted for testing.
Also notable is that the agenda indicates Long Beach Transit CEO Kenneth McDonald will deliver Monday’s update himself. McDonald took the top transit job about five months after the BYD contract was approved a year ago.
Representatives for Long Beach Transit and BYD could not be reached for comment late Wednesday. Board members contacted Wednesday did not know details of the situation but said they have been pleased thus far with the flow of information from the bus operators’ executives to the board.
“I don’t feel that we are not in the know,” board Secretary-Treasurer Maricela de Rivera said. “I feel that when our CEO knows something, he will let the board members know.”
Board Vice Chairwoman Barbara Sullivan, who said she returned to Long Beach from a vacation on Wednesday, said she did not yet know the specifics of the BYD situation but was satisfied with Long Beach Transit’s flow of information.
Board member Victor Irwin said he will interested in learning more about the issues between the federal government, BYD and Long Beach Transit.
In December, the FTA sent a letter to Long Beach Transit, warning of the agency’s views that BYD was not eligible for the $12.1 million bus contract because BYD had not taken the necessary steps to show it was operating in line with the Disadvantaged Business Enterprise Program, which requires contractors that receive federal dollars give minority- and woman-owned businesses a chance at work financed by federal transportation grants.
BYD, which stands for Build Your Dreams, is a Chinese company traded on the Hong Kong stock exchange and maintains its North American headquarters in Los Angeles. The company also has a contract to provide up to 25 buses to the Los Angeles County Metropolitan Transportation Authority, and the Antelope Valley Transit Authority in December announced plans to buy a pair of BYD buses.