McAllen’s long-delayed electric bus project appears headed for another snag.
In November 2011, McAllen won a hyper-competitive $1.9 million grant for Metro McAllen to acquire cutting-edge electric buses, which would charge wirelessly when they paused to load and unload passengers. McAllen agreed to contribute another $211,000 toward the project.
Electric buses, though, never materialized.
The original deal with Boston-based OLEV Technologies collapsed last October, when the start-up company couldn’t meet McAllen’s stringent financial requirements. McAllen started soliciting new proposals in August and received two offers — both with asterisks.
EV America, a start-up company based in Chattanooga, Tenn., submitted a roughly $3.1 million proposal, well above McAllen’s budget, said city Assistant Transit Director Mario Delgado. Money aside, the proposal appears dead on arrival anyway.
Federal court records show EV America filed for Chapter 11 bankruptcy on Jan. 30 and started selling company assets during the following months.
“Their assets have been auctioned off, so, I don’t know. Their ability to perform is diminished,” said attorney Kyle R. Weems, who’s representing EV America and company owner Albert E. Curtis III, who couldn’t be reached for comment Monday.
While EV America had assets worth nearly $5.2 million and liabilities worth nearly $2.4 million in January, the majority of the company’s value consisted of intellectual property and designs. The relatively illiquid assets couldn’t help EV America pay the Internal Revenue Service, Tennessee Department of Revenue and Catoosa County Tax Office.
“They had a great idea. They had the technology. They just ran out of capital,” Weems said. “I wish I could be more optimistic, but that’s just the way it is.”
McAllen received the second proposal from WAVE, a start-up company based in Park City, Utah. WAVE wouldn’t comment on the proposal, which didn’t include McAllen’s mandatory bid bond, according to city Purchasing Department records.
“Thank you for reaching out to WAVE about the McAllen proposal. As you know, the bid process is ongoing and the City of McAllen has not yet selected a winning proposal,” said Zachary S. Kahn, the company’s director of business development, in an email. “WAVE is not comfortable speaking with the press until after the City of McAllen has selected a vendor for the project.”
It’s unclear whether McAllen will consider WAVE’s proposal without the bid bond, which would help protect the city’s financial interests if the project failed.
Before submitting the proposal, WAVE had asked McAllen detailed questions about the bid bond, apparently concerned about liquidity, according to city Purchasing Department records.
“It is difficult for start-up businesses to secure performance and payment bonds in support of new advanced technology,” according to an anonymous question posted to McAllen’s e-bidding portal. “Is there any way that the bonding requirement can be reduced in scope or more limited in time?”
The city Purchasing Department responded that McAllen would require a bid bond worth about 5 percent of the project cost, about $105,000 for a $2 million project. WAVE didn’t submit the bid bond.
McAllen will examine both proposals and consult with the Federal Transit Administration, which awarded the $1.9 million grant, before taking action, Delgado said.
With the federal government partially closed, simply contacting the federal officials presents another hurdle. So-called non-essential federal workers have been furloughed until Congress approves new government funding.
“It’s really impossible,” Delgado said. “They’re not there, so it’s impossible to get any return calls or emails.”
After a deal with Boston-based OLEV Technologies collapsed, McAllen started soliciting new proposals for the city's electric bus project on Aug. 5. Two firms submitted proposals, but both come with asterisks.
Company: EV America
Headquarters: Chattanooga, Tenn.
Notes: Filed for Chapter 11 bankruptcy on Jan. 30
Headquarters: Park City, Utah
Notes: Didn't submit the required bid bond