Electric bus manufacturer BYD Motors and the Long Beach Transportation (LBT) terminated a contract for 10 electric buses on a technicality. BYD said the Federal Transit Administration (FTA) withdrew funding when the company failed to direct a percentage of the contract to minority-owned businesses, as part of a federal mandate.

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 said that BYD should not have certified to compliance prior to submitting a goal.

“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,” the company said in a statement.

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.