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U.S. Department of Transportation U.S. Department of Transportation Icon United States Department of Transportation United States Department of Transportation

FTA Letter to Long Beach Transit - December, 16, 2013

Kenneth McDonald
President and CEO
Long Beach Transit
1963 East Anaheim Street Long Beach, C A 90813

Re:Notice of Noncompliance with Disadvantaged Business Enterprise (DBE) Requirements

Dear Mr. McDonald:

We received Long Beach Public Transportation Company's (LBT) response to our November I, 2013 letter ofprobable noncompliance with the Department ofTransportation's Disadvantaged
Business Enterprise (DBE) regulations. After having carefully considered LBT's response, one simple fact remains undisputed. BYD Motors, Inc. (BYD) was ineligible to bid on the LBT procurement. As a result FT A has determined that LBT failed to meet the requirements of49
C.F.R. §26.49(a), and. therefore, LBT's contract with BYD is ineligible for Federal Transit Administration (FTA) funding. Our reasons for this decision are stated below.

As noted in our previous correspondence, because LBT is the recipient of one or more FT A grants, loans, and/or contracts, it is required to comply with the DBE regulations. Specifically, 49 C.F.R. §26.49 states in part, "ifyou are an FTA recipient, you must require in your DBE program that each transit vehicle manufacturer, as a condition of being authorized to bid or propose on FTA-assisted transit vehicle procurements, certify that it has complied with the requirements ofthis section." The requirements applicable to transit vehicle manufacturers state. "ifyou are a transit vehicle manufacturer, you must establish and submit for FTA's approval an annual overall percentage goal." ld §26.49(b) In addition, the requirements further provide that, "as a transit vehicle manufacturer. you may make the certification required by this section ifyou have submitted the goal this section requires and FT A has approved it or not disapproved
it." (emphasis added)

FTA has determined that BYD was simply ineligible to bid on the LBT procurement because its February 12 and March 27,2013 certifications were false. On those dates. BYD could not certify compliance with the DBE regulations because it had not yet submitted for FTA's approval an annual overall DBE percentage goal as required by the DBE regulations.

In addition, the Department's DBE regulations are quite clear that compliance with 49 C.F.R. Part 26 is a condition ofassistance. Specifically, 49 C.F.R. §26.21 states, "you are not eligible to receive DOT financial assistance unless DOT has approved your DBE program and you are in compliance with it and this part." In this case, LBT was not in compliance with DOT requirements when it allowed BYD to bid on an FTA-assisted contract when BYD had not submitted a DBE goal to FT A in advance of submitting its bid to LBT.
Accordingly, FT A has determined that LBT failed to comply with 49 C.F.R. Part 26, and, therefore, the contract with BYD is ineligible for FTA participation.


Linda Ford
Director, Office ofCivil Rights

Dorval R. Carter, Jr.
Chief Counsel

cc: Rolando Cruz, Executive Director and Vice President ofMaintenance and Facilities