Long Beach Transit’s plan to buy 10 electric buses from Chinese-owned BYD has had a rocky road. Shortly after the transit board approved the deal last March, rival bus maker Proterra cried foul, and a couple of politicians asked why the contract didn’t go to a local firm. In October, questions were raised about the weight of the buses and some cracks that were found in testing.

Now the Federal Transit Administration (FTA) says that BYD is not eligible for a $12.1 million federal grant that’s meant to finance the purchase, because the company could not certify compliance with the government’s Disadvantaged Business Enterprise Program, which is intended to benefit minority-owned businesses, at the time the contract was awarded.

The Long Beach Press-Telegram reports that the FTA sent two letters to Long Beach Transit, warning that the agency must either cancel the contract with BYD and start the bidding process over, or keep the current deal in place and lose the federal grant.

BYD’s public relations firm defended the company’s position. “BYD believes it is in compliance with all Disadvantaged Business Enterprise FTA requirements and is working closely with senior FTA officials. BYD believes strongly in not only meeting our DBE goals of utilizing small business owned and operated by disadvantaged people, but in exceeding those goals. We are an American company creating American jobs with superior 24-hour battery technology,” wrote Eleanor McManus of Purple Nation Solutions.

Long Beach Transit has yet to comment on the FTA letters, but has said that it is giving BYD time to repair its standing with the FTA requirements.

Source: Long Beach Press-Telegram