A California procurement agency is in legal hot water after being targeted by a Chinese-based bus manufacturer. Official reports show that the bus maker is suing the Long Beach Transit agency for breach of contract, and a lawsuit may soon be on the way. The legal action has been initiated in response to difficulties with a multi-million dollar contract that would allow Long Beach to purchase 10 buses from the transportation company.
News reports show that Long Beach Transit and BYD have not enjoyed a congenial relationship since the federal contract was awarded. The contract, which represents BYD’s first major entry into the American marketplace, has been fraught with difficulties and delays. Long Beach Transit raised the ire of the bus manufacturer after rejecting a bus that had been entirely assembled in China. Official reports show that the agency requested a U.S.-assembled bus, instead, but that request was not submitted until examinations of the first bus had already commenced. Further, BYD is accused of violating federal requirements through the Disadvantaged Business Enterprise program, which requires set-asides for women- and minority-owned businesses.
Now, new testing requirements may delay the process even more; BYD estimates that the additional evaluation may last up to 15 weeks. BYD, which stands for “Build Your Dreams,” is attempting to gain footing in the American marketplace by securing several municipal contracts. The company is also slated to provide dozens of buses to the Los Angeles County Metropolitan Transportation Authority, and additional assembly facilities have been established in the area.
It is not yet clear whether Long Beach Transit intends to break the contract, as a variety of factors are still in play. However, it is clear that even government entities may be involved in contract disputes with business groups. Companies that are facing business and commercial law issues may benefit from speaking with a California attorney. These professionals can provide additional information that may help business owners make educated decisions.
Source: Press-Telegram, “Long Beach threatened with lawsuit by Chinese electric bus maker” Andrew Edwards & Karen Robes Meeks, Feb. 26, 2014