Long Beach Cancels BYD Electric Bus Contract Over Application Error
The city of Long Beach cancelled the winning bid from China’s BYD to provide electric buses to the California city over a rather silly omission. While both Long Beach and BYD expect to re-win the $12.3 million electric bus contract, this issue highlights the unending hurdles companies have to leap through to bring vehicles to the road.
BYD failed to include what percentage of its business it plans to get from “disadvantaged” (i.e. poor/minority) businesses per the Federal government’s Disadvantage Business Enterprise Program. It took city officials nine months to find the problem, cancelling the winning bid and forcing BYD to re-file for the contract. BYD opted not to appeal as a good faith gesture. But Chief Executive Stella Li was obviously not happy with the situation, saying;
“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.”
Unfortunately for BYD, not dotting its i’s or crossing its t’s will cost it a lot of money, and time. The bidding process will take another three months, adding more time to the long wait for the record-setting all-electric buses. And while BYD is confident it will win the bid once again, there’s always the chance another electric bus maker, such as Proterra, could snipe the lucrative contract.
If it did lose the contract, that would be a major setback for BYD’s ambitious American expansion plans, which have stalled time and again. BYD is learning the hard way how American government works.
Basically, not well.
Source: L.A. Business Journal