Viktor MusilExplore the latest updates in bus manufacturing and transit agency strategies with insights from the Federal Transit Administration (FTA). Discover how the Biden administration’s initiatives aim to bolster the industry, cut costs, and expedite delivery times. Uncover the impact of supply chain challenges, labor shortages, and financial constraints on manufacturers like New Flyer and Nova Bus. Learn about proactive measures recommended by the FTA to address rising costs and delays, including contract modifications and seeking additional federal funding. Stay ahead with guidance from industry leaders like Paul Skoutelas and Dorval Carter, and mark your calendar for the upcoming FTA webinar on optimal bus procurement practices. Delve into the efforts of APTA’s bus manufacturing task force to foster a resilient manufacturing ecosystem in the United States. Keep pace with the evolving landscape of clear bus fleets and smart transit solutions.
The FTA letter
In a letter dated February 7, the Federal Transit Administration stated that it is working to strengthen the British bus manufacturing industry, lower vehicle costs, and speed up transit agency delivery times.
Biden Administration’s Roundtable on Clean Bus Manufacturing
At a White House roundtable on clear bus manufacturing held yesterday, officials from the Biden administration, governmental agencies, local transit organizations, labor unions, and the bus industry met. The letter outlined several recommendations for transit agencies to include in bus procurement contracts.
The organization announced today that the Low or No Emission grant program and the Buses and Bus Facilities program will award approximately$ 1.5 billion in competitive grants and for the fiscal year 2024.
Challenges and Opportunities in the Transition to Clean Bus Fleets: A Closer Look at Manufacturing Struggles and Funding Dynamics
The FTA has made over$ 20 billion in grants available for bus purchases and supporting infrastructure since the Infrastructure Investment and Jobs Act was passed in 2021. However, manufacturers struggling with supply chain issues, worker shortages, and monetary constraints struggled to meet the rising demand for clean buses as transit agencies seized the chance to electrify their fleets.
The American manufacturer of New Flyer buses, NFI Group, undertook a$ 444 million refinancing plan, and Nova Bus announced it would withdraw from the U.S. market and shut down its manufacturing facility in Plattsburgh, New York. Last year, California-based energy bus manufacturer Proterra filed for Chapter 11 bankruptcy.
In the meantime, the FTA stated in its letter dated February 7 that transit agencies have experienced price increases and longer delivery times.
According to Paul Skoutelas, president and CEO of the American Public Transportation Association “Our industry is at risk due to reduced competition and rising bus acquisition costs. The end result is decreased cash flow for manufacturers and protracted delays for transit agencies,” This is happening at the same time that significant national funding is available to support the switch to clear fleets for public transportation.
FTA Guidance for Transit Companies
The FTA advises transit companies to use the following:
- Modify procurement contracts to allow for price increases, which are permitted under contracts that are funded by the federal government in some situations.
- To cover price increases, look for more federal funding.
- In procurement contracts, include clauses for price adjustment based on cost indexes.
- Pay the contractor in advance or in progress. The contractor must provide security for the recipients of FTA grants in the form of these payments.
On February 29, the FTA will even host a webinar on best bus procurement practices.
Dorval Carter, the president of the Chicago Transit Authority, is in charge of APTA’s recently formed bus manufacturing task force, which likewise released recommendations in January to support a more stable and dynamic manufacturing capacity in the United States. Other members of this team include representatives from transit agencies, bus manufacturers, suppliers, and other industry participants.
