Executive Overview
As transit agencies across the United States grapple with skyrocketing capital costs, aging rolling stock, and increasingly constrained operating budgets, industry leaders are turning their attention to a critical yet historically overlooked fix: procurement reform. According to a landmark joint report published by the Eno Center for Transportation and CALSTART—entitled Customization, Competition, and Costs: Findings and Recommendations for the U.S. Transit Bus Industry—throwing additional federal subsidies at the problem will no longer suffice.
Instead, transit authorities must fundamentally rethink how they buy, build, and maintain their fleets. The current acquisition ecosystem is plagued by excessive customization, fragmented manufacturing markets, and unpredictable funding cycles that drive up vehicle prices, lengthen delivery lead times, and stifle competition among bus builders.
At a high-profile Brookings Institution event examining the report, policymakers, transit administrators, and industry stakeholders converged around a unified conclusion: transit agencies are paying a heavy price for over-engineering. By shifting toward standardized vehicle specifications, leveraging cooperative state and regional purchasing contracts, prioritizing open-architecture technologies, and stabilizing federal funding mechanisms, the U.S. public transit sector can stretch limited taxpayer dollars, modernize aging fleets more efficiently, and ultimately deliver the reliable, frequent service that riders demand.
Detailed Chronology: The Evolution of the Bus Procurement Crisis
The Roots of Fragmentation
To understand the current crisis in U.S. transit bus procurement, one must examine how the marketplace evolved over the past several decades. Historically, public transit agencies operated independently, developing localized engineering specifications designed to address specific regional topographies, climatic conditions, and operational preferences. While many of these agency-specific requirements initially stemmed from legitimate operational needs—such as heavy-duty heating and cooling systems for extreme climates or specialized door configurations for high-density urban loading—they collectively fractured the marketplace.
Over time, as market consolidation reduced the total number of domestic and international bus manufacturers operating in North America, this fragmentation became unsustainable. Rather than producing large, cost-effective batches of standardized vehicles, manufacturers found themselves repeatedly retrofitting assembly lines to meet bespoke, one-off agency requests. This constant reinvention of the wheel drove up engineering hours, complicated supply chains, and ballooned per-vehicle production costs.
The Release of the Eno-CALSTART Report
The culmination of these mounting structural pressures prompted the Eno Center for Transportation and CALSTART to launch an exhaustive study into the economics of the U.S. transit bus industry. Their findings, released in mid-2024, laid bare the hidden costs of over-customization. The report served as the catalyst for a subsequent June Brookings Institution panel discussion, which brought together prominent industry voices to debate the path forward.
Moderated by Philip Plotch, principal researcher and senior fellow at the Eno Center for Transportation, the panel featured Lisa Jerram, senior director of bus operations and new vehicle technologies at the American Public Transportation Association (APTA); Michael Dorgan, policy manager at the Center for Transportation and the Environment; and Holly Arnold, administrator at the Maryland Transit Administration (MTA).
The discussion directly addressed the report’s central paradox: while transit agencies continually lament high vehicle acquisition costs and painfully long delivery timelines, they are simultaneously the architects of those delays through their insistence on micro-managing vehicle design down to the smallest bolt and bracket.
Supporting Context & Metrics: The True Cost of Customization
The Economics of Scale Versus Bespoke Manufacturing
The economic penalty of excessive customization is starkly evident when analyzing bulk purchasing power versus small-batch production runs. During the Brookings panel, Maryland Transit Administration Administrator Holly Arnold offered a compelling real-world comparison.
"If I do a procurement for 70 buses, the pricing that I’m getting is not nearly as good as if the procurement is for 500 buses over five years," Arnold explained. When agencies order vehicles in piecemeal, annual batches laden with custom trim packages, proprietary software hooks, and unique interior layouts, manufacturers are forced to treat each contract as a custom engineering project rather than an assembly-line commodity.
The financial dividends of scaling back customization are already materializing for agencies willing to challenge the status quo. By critically reviewing internal specifications and eliminating non-essential customizations, the MTA successfully reduced its baseline bus procurement costs by approximately $17,000 per vehicle. Across the agency’s typical procurement volume, this simple administrative discipline generates roughly $1.2 million in annual savings—capital that is immediately redirected toward state-of-good-repair investments, facility upgrades, and fleet expansion.
The Maintenance Burden of Mixed Fleets
The hidden costs of customization do not end when a bus rolls off the assembly line; in many ways, that is where the operational expenses truly begin. Operating a diverse fleet of highly customized vehicles creates a logistical nightmare for maintenance departments.
When an agency acquires buses built to varying specifications—even from the same manufacturer—maintenance crews must stock a sprawling inventory of unique replacement parts, specialized filters, and proprietary components. Furthermore, training technicians and operators across multiple distinct vehicle platforms consumes valuable time and resources, compounding labor costs and increasing vehicle downtime.
"We are only customizing where it gives us measurable value," Arnold emphasized during the panel. "If it doesn’t give us value, we’re not doing it."
The Technological Paradox: Rolling Computer Networks
Compounding the challenge of physical customization is the rapid integration of advanced onboard technology. Modern transit buses are no longer simple mechanical haulers; they are rolling technology platforms equipped with:
- Advanced Driver Assistance Systems (ADAS)
- Automated Passenger Information Displays (APIDs)
- Automated Vehicle Location (AVL) and GPS tracking
- Enhanced security camera networks and closed-circuit monitoring
- Complex fare collection technologies and contactless validators
- Connected telematics and diagnostic software suites
While panelists universally agreed that these technological investments significantly enhance passenger safety, security, and the overall rider experience, they also acknowledged that proprietary tech ecosystems drive up initial purchase prices and lock agencies into expensive, long-term software licensing agreements.
To combat vendor lock-in, several speakers advocated for open-architecture standards. Michael Dorgan of the Center for Transportation and the Environment noted that walking the line between valuable technological innovation and unnecessary budgetary bloat will be one of the industry’s defining challenges over the next decade. The MTA, for instance, is actively transitioning toward open-platform technology mandates to ensure seamless hardware integration and maintain administrative flexibility when upgrading software in the future.
Official Statements and Legislative Perspectives
Redefining Agency-Manufacturer Collaboration
Procurement reform requires more than internal soul-searching among transit agencies; it demands a fundamental resetting of the relationship between public buyers and private-sector manufacturers.
Holly Arnold shared how the MTA took the proactive step of engaging directly with bus builders to understand why certain manufacturers routinely chose not to bid on the agency’s requests for proposals (RFPs). These candid conversations revealed that overly rigid contract terms, punitive bonding requirements, and unfavorable payment schedules were scaring away potential competitors.
Armed with this feedback, the MTA revised its contracting framework, adjusted bonding requirements where feasible, and introduced milestone-based payments. These adjustments successfully broadened the competitive bidding pool, lowered acquisition costs, and repaired strained relationships with manufacturers.
Legislative Action: The Transit Bus Affordability Act
The procurement crisis has also drawn the attention of federal lawmakers. In a separate discussion during the event, U.S. Representative Maxwell Frost (D-FL) sat down with Rebecca Higgins, vice president of policy at the Eno Center for Transportation, to discuss legislative remedies.
Rep. Frost is the sponsor of the bipartisan Transit Bus Affordability Act, landmark legislation that directs the Government Accountability Office (GAO) to conduct a comprehensive study on rising bus procurement costs and identify structural opportunities for regulatory and operational reform.
During their dialogue, Rep. Frost underscored that federal funding unpredictability remains a primary driver of the industry’s woes. When federal appropriations fluctuate or rely heavily on hyper-competitive discretionary grants rather than formula-based predictability, transit agencies are forced into erratic, stop-and-go purchasing cycles. This volatility prevents agencies from entering into multi-year, coordinated procurement contracts that could otherwise secure volume discounts and provide manufacturers with the stable production pipelines necessary to invest in domestic workforce development and tooling.
"There isn’t a magic lever to pull or a single silver bullet solution," Frost noted, cautioning that while agencies must trim non-essential customization, they should never compromise on foundational safety features or equitable access. Instead, agencies must carefully evaluate when customization enters the procurement timeline, ensuring that the primary objective—deploying safe, reliable rolling stock—is never obscured by vanity features.
Future Outlook: Refocusing on the Core Mission of Public Transit
As the U.S. transit bus industry navigates this pivotal juncture, the overarching consensus from the Brookings panel is clear: the ultimate metric of success is not how many custom bells and whistles an agency can pack onto a single vehicle, but rather the quality, reliability, and frequency of the service provided to the public.
Lisa Jerram of APTA encapsulated this philosophy succinctly: "What drives folks to use the bus is going to be a bus that shows up when it says it’s going to show up. Better amenities, not just on the bus, but also at bus shelters. The service is the more important thing. I would like us to focus on how we can provide the best service possible."
Looking ahead, the path to a sustainable transit future rests on three interconnected pillars:
- Standardization and Cooperative Purchasing: Agencies must lean heavily into existing frameworks—such as APTA’s "White Book" standard bus specifications and multi-agency state purchasing contracts—to drive down per-unit costs and accelerate delivery times. Regional standardization should be prioritized where environmental and operational conditions align.
- Technological Interoperability: Future technology deployments must prioritize open-architecture platforms, shielding agencies from proprietary vendor lock-in and curbing runaway software maintenance costs.
- Funding Predictability and Collaborative Governance: Federal policymakers must work toward stabilizing funding reauthorizations, replacing erratic grant cycles with predictable, multi-year funding streams that empower agencies to plan long-term fleet replacement schedules. Simultaneously, transit authorities must maintain open, collaborative dialogues with bus manufacturers to foster a healthy, competitive industrial base.
By embracing these systemic reforms, the U.S. transit industry can successfully break free from the trap of endless customization. The result will be healthier budgets, streamlined manufacturing supply chains, accelerated zero-emission fleet transitions, and—most importantly—more frequent, dependable buses rolling down the streets for the everyday riders who rely on them most.
