Long Beach Transit, BYD cancel $12.1 million contract for electric buses

Long Beach Transit’s board voted unanimously during a special meeting this morning to cancel its contract with bus manufacturer BYD Motors for the provision of 10 electric buses.

The decision, made in agreement with BYD itself, was made about one year after board members voted to give BYD the contract in the first place. Federal Transit Administration officials have asserted that BYD should not have been awarded the contract at the time because the company was not yet eligible to participate in contracts financed by federal grant funds. The now-cancelled $12.1-million deal with BYD depended on $9.6 million from Washington.

The board’s vote this morning makes it possible for Long Beach Transit to reopen the contract to new competition, which may now include BYD and other competitors.

“Federal funding is still available,” board chairwoman Freda Hinsche Otto said after the vote was taken on Monday.

Board members cast their votes after meeting behind closed doors for several minutes. Board members did not publicly debate the merits of the contract cancellation.

Long Beach Transit spokesman Kevin Lee said after the vote was official that agency staffers will likely spend two to three months to prepare for a new round of bidding.

“In an effort to demonstrate our good will to both the people of Long Beach and the FTA, we have agreed to mutually terminate the Long Beach Transit contract so it can be re-bid without delay,” BYD Motors CEO Stella Li said in a statement.

“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,” her statement continued.

BYD is a Chinese-based firm that maintains its North American headquarters in Los Angeles. The company has pledged to manufacture the buses that were to be assembled for Long Beach in Lancaster.

South Carolina-based Proterra was the second place finisher in last year’s bidding. The GOP-controlled House Committee on Oversight & Government Reform has requested documents from Long Beach Transit as part of an inquiry as to whether former Vice President Al Gore, a Democrat, inappropriately lobbied local officials prior to last year’s contract vote. Gore is now part of an investment firm that has invested in Proterra.

Long Beach Transit CEO Kenneth McDonald, who was not with the agency when BYD won the contract last year, said after the meeting that he was not aware of any attempts by the former vice president to lobby board members since the contract vote last March.

Lee said Long Beach Transit is cooperating with the congressional inquiry, which thus far has been essentially a request for records. Lee said no administrators nor board members have been deposed as part of the probe.

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