Long Beach, California, has long been known as the Queen City because of the Queen Mary ocean liner that's docked there. A much less elegant situation is happening to Chinese vehicle maker BYD, which had a $12.1-million contract nullified over what BYD says is a technicality.

BYD said last week that it and the city of Long Beach mutually agreed to terminate an electric-bus contract for 10 electric buses. The US federal government has said that BYD didn't comply with a mandate to pass on a certain percentage of their business to minority-owned entities. And because the feds were funding almost $10 million of that contract, according to the Long Beach Press-Telegram, both BYD and the city agreed to call the year-old deal off.

BYD was pretty miffed that the government took so long to get to its findings and said its own actions were a "good faith error." The company also took the opportunity to cite its buses' "superior technology" as a reason why the company expects to win future municipal contracts and slyly noted that it has a 25-bus order from the nearby city of Los Angeles. No federal funds were part of that contract. The company also said last month that the Chinese city of Dalian put in an order for as many as 1,200 electric buses, so that should sooth things a bit. Check out BYD's somewhat defiant press release below.
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BYD Announces Agreement with Long Beach Transit to Mutually Terminate Electric Bus Contract

Expresses "Confidence in Winning New Competition For Same Reasons as in 2013: Technological Superiority"

LONG BEACH, Calif.--(BUSINESS WIRE)--BYD Motors, Inc. announced today that it had agreed to mutually terminate its contract with Long Beach Transportation Company ("LBT") for the delivery of 10 electric buses. BYD said that the Federal Transit Administration ("FTA") withdrew funding of the contract as a result of a good faith error in BYD's pre-bid disadvantaged business program certification in February 2013. LBT announced that BYD won the competition for the contract on March 24, 2013. Based on the contract award, BYD then submitted a percentage goal for purchases from disadvantaged businesses in June 2013. The FTA concluded, however, that BYD should not have certified to compliance prior to submitting a goal, even though submitting a goal in the absence of a contract award would have been meaningless.

"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."

Regardless, both the FTA and the LBT attorneys agree that BYD is now eligible to participate in any future contract funded by the FTA as a result of its June 2013 program goal submission.

Ms. Stella Li, CEO of BYD Motors, Inc., stated: "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."

"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."

"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."

"We have the longest range of any electric bus manufactured in the world, with up to 24-hour service on a single electric charge, and thus, no need to construct conspicuous charging stations throughout the bus routes. Our buses can be used without interruption during operating hours, and can be recharged overnight at the time of lowest electrical rates. We have no engine, no clutches and no transmission-we have simply in-wheel-hub motor drives and batteries. It is for these reasons that the Los Angeles County Metropolitan Transportation Authority decided last year to purchase up to 25 BYD buses."

"We remain committed to a robust program of purchasing from disadvantaged businesses. We also look forward to creating many new jobs at our two new manufacturing facilities in Lancaster, California and administrative offices in Los Angeles. In less than two years, we already have created 60 new jobs in both places. We expect to increase to 100 new jobs by the end of this year, and to 200 by the end of next year."

"The people of Lancaster are excited that we have located two manufacturing facilities in their city. We are proud of our job-creating record in Southern California-American jobs with technology that is operating and praised throughout the world."

"We are optimistic, enthusiastic, and dedicated to being a successful American company, with clean, silent, and economical electric energy buses produced by well-paid and supportive workers. Make no mistake: We are here in Southern California and in America for the long-term."

The FTA-funded stress testing in its Altoona, Pennsylvania, facility, of the BYD electric bus-the same model to be delivered to Long Beach Transit-has resumed and should finish soon.

About BYD

BYD presently has sold and deployed over 1,000 operating electric buses in China and throughout Europe and Latin America. It has received an order for up to 25 buses from the Los Angeles County Metropolitan Transportation Authority and is in the process of converting the Antelope Valley Transit Authority (AVTA) fleet to all-electric buses as it has done in other places around the world (see https://www.youtube.com/watch?v=wz_96VQIrpo). BYD will deliver the first two buses to the AVTA in April 2014.

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    • 1 Second Ago
      • 1 Year Ago
      Wow, $1.2 per bus! That's for a product of questionable quality, and that doesn't even support US jobs, but rather is built overseas. That was a bad deal from the beginning, fiscally and politically. It's no wonder they found some bureaucratic reason to back out. I would bet that Tesla could buy some US built diesel buses for around $300,000 - $400,000 and use domestic labor, engineering and management to retrofit them into an end product of much higher quality, and likely a bit lower price.
      Ken Donahue
      • 1 Year Ago
      Long Beach isn't called the "Queen City" because of it's boat...
      • 1 Year Ago
      It is ridiculous that we would be importing technology from China. It seems that a lot of Americans either do not care (or do not understand) how injurious our trade deficit has become to our economy. I'm glad this deal was killed. Hopefully the powers-that-be will get smart and buy Proterra buses made right here in the USA. I hate when tax dollars are sent abroad!
        • 1 Year Ago
        But BYD's battery technology is superior to what Proterra has to offer though. Their buses can run way longer than Proterras and has higher top speed. Not to mention they recently made a record of going 202 miles on a single charge (with 8% of battery left) in Denmark.
      Actionable Mango
      • 1 Year Ago
      BYD is Chinese. Wouldn't that be a minority owned company? Obviously they aren't minorities in China. Do you have to be a minority in your home country? So BYD would have to hire some Russians or something? Does anyone think this seems stupid, arbitrary, and a waste of time and money?
      • 1 Year Ago
      BYD = Bring Your own Diversity
      Hedo D
      • 1 Year Ago
      I'm surprised BYD didn't bother to look into local Chinese or Chinese-American owned business to take care of this issue. You would think that's the first thing they would done.
        • 1 Year Ago
        @Hedo D
        the word "minority" has a totally different meaning in CA.... it is measured by not percentage in population but other measurement by your imagination.
      • 1 Year Ago
      Why do race, ethnicity, and sex need to be considered at all in deciding who gets awarded a contract? It's good to make sure contracting programs are open to all, that bidding opportunities are widely publicized beforehand, and that no one gets discriminated against because of skin color, national origin, or sex. But that means no preferences because of skin color, etc. either--whether it's labeled a "set-aside," a "quota," or a "goal," since they all end up amounting to the same thing. Such discrimination is unfair and divisive; it breeds corruption and otherwise costs the taxpayers and businesses money to award a contract to someone other than the lowest bidder; and it's almost always illegal—indeed, unconstitutional—to boot (see 42 U.S.C. section 1981 and this model brief: http://www.pacificlegal.org/document.doc?id=454 ). Those who insist on engaging in such discrimination deserve to be sued, and they will lose.
        • 1 Year Ago
        Your correct in that these policies are divisive. That is the point. The american people are far easier to control when they are divided. Thus all actions taken by the federal government in an attempt to apparently increase justice (typically stated by them in the press release) are implemented in a way that actual creates this divisive atmosphere. Please be aware that this is the real goal. Politicians are completely unnecessary if things are working well. That is why race, ethnicity, and sex are considered when when deciding who gets awarded a contract. Because you need to be angry at your neighbors and family so that you are an isolated individual rather than a member of a group that supports and educates each other, and teaches the benefit of cooperation, work and critical thinking.
          Levine Levine
          • 1 Year Ago
          Apparently, too many Americans can't see the 'divide and conquer' tricks used by all government.
      2 wheeled menace
      • 1 Year Ago
      Sorry; too many white people working there. Time to shut it down.
      • 1 Year Ago
      Well, I wont use these buses, need to be careful. Superior DUMPING is the right name and the 'superior' part of of any Chinese deal, technically is nothing but just a mediocre old technology full of explosive batteries made by forced labor, no thanks and I won't use any of those buses, 100 percent sure
        Levine Levine
        • 1 Year Ago
        As to 'forced labor," every American worker is forced to work nearly 4 months for the government to pay the following taxes: 1) Federal Income Tax 2) Federal gasoline Tax 3) Federal taxes on capital gain, interest, dividend 4) Federal death tax 5) Federal tax on alcohol beverage 6) Federal social security tax 7) Federal ACA (Obamacare) tax 8) Federal Airport security tax 1) State Income Tax 2) State property tax 3) State sales-use tax 4) State gasoline tax 5) State utility taxes (gas, electricity, water, sewer) 6) State telecom taxes (cable TV, cellphone, landline phone, internet) 7) State disability and unemployment tax 8) State Sin taxes ( alcohol beverage, tobacco, casino, lottery) 9) State Environment taxes ( recycle bottles, cans, electronic devices, battery, used motor oil, tires) 10) State tax on special products (lumber, latex paint, ) 11) State Airport tax 12) State inheritance tax 13) State DMV tax 1) City Income tax 2) City transportation improvement tax 3) City hotel bed tax As for "DUMPING," open competitive bid at Long Beach resulted in BYD winning the contract for 10 EV buses for testing, not purchase. As for your "full of explosive batteries," there's no evidence to support your claim. As for your 'mediocre old technology,' where is America's superior technology? Or is that your version of sour grapes? Your choice of language and tone in your comment reveal your hate and prejudice against this Chinese firm, and maybe anti-Chinese as well. Whoever or whatever brainwashed you to this mental state is the blame, not you, and that I must concede.
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