California-based Long Beach Public Transportation Company (LBT) agreed Thursday to mutually terminate an agreement with electric bus manufacturer BYD Motors Inc. to build battery-operated electric buses for the transit company.

Obtaining financial assistance from the Federal Transit Administration (FTA) for the $12.1 million project was an essential component of the agreement. The FTA had earlier notified LBT that BYD Motors submitted an invalid Disadvantaged Business Enterprise (DBE) certification during the procurement process leading to the original April 29, 2013 agreement, and that the contract between LBT and BYD Motors Inc. was therefore not eligible for federal funding.

“LBT and BYD agreed to mutually terminate the contract to expeditiously resolve the issue. LBT has been cooperating with the FTA and working together with BYD in an effort to move forward amicably,” said Kenneth McDonald, president/CEO of LBT.

Terms of the mutual termination agreement provide that neither LBT nor BYD will take legal actions against one another.

“The action the Board has taken today to mutually terminate the contract enables us to look ahead at the possibility of a new RFP in the coming months to bring the City of Long Beach clean-running zero-emission public buses,” said Long Beach Transit Board Chair, Freda Hinsche Otto.

Transit Investments for Greenhouse Gas and Energy Reduction (TIGGER) program funds are still available to LBT for a new contract. Transit officials expect to evaluate a competitive rebid of the project. Subsequently, a new RFP and review process would follow.