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Portland - January 2014

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Portland — Sixth United Streetcar to be Purchased

January 2014

The city of Portland plans to buy a sixth United Streetcar LLC unit from the Clackamas, Oregon, manufacturer, for $2.3 million, The Oregonian reported. The proposed order for the sixth car is in budget documents being reviewed by a budget advisory committee.

The city had, back in 2009, ordered six streetcars from the Oregon Iron Works subsidiary, the first order received by the company as it ventured into streetcar manufacturing. However, as delays and overruns plagued the order, the city quietly reduced its order to five of the cars.

The fifth car was delivered in October, 2013, more than a year late. Penalties for the late delivery have been accumulating at a rate of $300 per day. Now Portland Streetcar has negotiated a compensation package with United Streetcar for the late deliveries and the deal could set a precedent for similar compensation for Tucson and Washington, D.C. The compensation amounts to 83 percent of the liquidated damages originally calculated and involves extra work on the cars and discounted spare parts.

The compensation for manufacturing delays was detailed by The Oregonian. The money is about $92,000 less than what Portland could have received, if the contract's formula for late delivery penalties were followed to the letter.

The settlement includes no compensation for the millions of dollars spent continuing consultant contracts to monitor United Streetcar’s delayed progress, which by April 2013 had doubled to $3.6 million, and which were not covered in the initial United Streetcar contract.

The city settled for $450,264, 83 percent of the liquidated damages initially calculated based on the $300 per day for late delivery of the cars and $500 a day for late delivery of technical documentation. Of the total, $379,759 will pay for vehicle upgrades beyond the scope of the original contract and $70,505 will come in the form of discounted spare parts.


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