Long Beach Transit has terminated a contract to buy 10 electric buses from Chinese automaker Build Your Dreams.
Federal transit authorities said they could not fund the contract after finding that the Chinese company, known as BYD, violated regulations that made it ineligible to bid in the first place.
Specifically, the company did not submit goals for working with businesses owned by minorities or other disadvantaged groups, as required by the federal agency. The rules are designed to give small businesses a chance to compete fairly on federally funded projects.
In a statement, BYD said Thursday that it had agreed to a "mutual" termination with Long Beach Transit and planned to bid again for any future bus contracts.
Stella Li, an executive at BYD, described the company's mistake as a "technical error that in no way casts doubt on our deep commitment to purchase from disadvantaged businesses."
"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," she said in the statement.
BYD opened a bus-manufacturing factory in Lancaster last year with grand ambitions to supply electric-powered buses to companies and transit agencies across the country.
The Shenzhen, China-based company, which has its American headquarters in downtown Los Angeles, also won contracts to build two buses for the Antelope Valley Transit Authority and as many as 25 for the Los Angeles County Metropolitan Transportation Authority.