DENVER – The FBI is investigating a financially-troubled North Carolina bus maker that won a $21 million contract to build 32 new generation 16th Street Mall shuttles.
The investigation involves allegations that DesignLine installed used parts in new buses.
The Regional Transportation District began using two DesignLine prototypes on the mall in 2011.
DesignLine contacted RTD and said a vendor had put in a used turbine in one of the buses. The company immediately replaced it at no cost, RTD spokesman Scott Reed said.
The FBI subsequently called RTD this summer and talked with officials in a conference call, Reed said. “And that was the last we heard about it.”
A former DesignLine official said an FBI agent questioned him about allegations that the company had placed used parts on some of its buses, according to the Charlotte Observer newspaper.
An FBI spokeswoman said on Friday she couldn’t confirm or deny the existence of investigations.
RTD earlier this year contracted with DesignLine for 32 shuttle buses to replace aging TransTeq vehicles. The contract was awarded over the objections of some board members who said DesignLine’s past performance demanded further study.
DesignLine lost three contracts in 2011, including one for the Metropolitan Transit Authority in New York City, because of missed deadlines and operational problems.
DesignLine declared Chapter 11 bankruptcy in August, and in October a U.S. bankruptcy court judge approved the sale of most of the company’s assets to a California investor.
Wonderland Investment Group bid $1.6 million for DesignLine’s equipment, machinery, intellectual property and other assets.
Wonderland president Tony Luo said he would invest $30 million in DesignLine and reopen operations as soon as possible.
But first, Luo said, he would need to negotiate contracts RTD and bus operators in New Jersey and Montreal, according to the Charlotte Observer.
Luo couldn’t be reached for comment Friday.
DesignLine once employed former Charlotte Mayor Anthony Foxx, who became the U.S. transportation secretary in July. At one time, the bus maker had more than 250 employees before it laid off most of its workers.
Reed said the costs to RTD because of the bankruptcy have been minimal.