The Federal Transit Administration cleared the way Tuesday for Lawrence to hire MV Transportation to run its planned bus system.
Lawrence Bus Co. had contested the selection of MV in June, arguing the California company was improperly given preference because of its national experience and that the city-run service would compete with the local company.
Mokhtee Ahmad, FTA regional administrator, said in a letter received by the city and Lawrence Bus Tuesday that the city had acted properly.
The letter was welcome news to city officials, who have had to go through the proposal process twice after the first contract was thrown out because of problems with the way it was awarded.
"We tried very hard to follow FTA's process and do everything right," Karin Rexroad, city public transit administrator, said. "It's nice to have that acknowledged and move on to start providing the service."
Lawrence Bus owner Wayne Popp said he was unhappy with the decision.
"During this process, it has become very apparent for whatever reason that the commission does not want or support local private business," Popp said.
Popp is appealing the decision to the FTA's general counsel's office in Washington, D.C.
The city is moving ahead in negotiating a contract with MV, Rexroad said.
The process will be made somewhat easier because the city and MV had agreed on a contract before it was thrown out, Rexroad said. The new contract will cost an average of $1.77 million a year throughout three years. It is about $20,000 a year less than the earlier contract.
Rexroad said it would take about three months to set up the system once the contract is approved. But the city is having to wait at least a year for delivery of the 10 to 12 buses it agreed to purchase from El Dorado National.
Rexroad said she would like the city commissioners to reconsider their earlier decision against leasing buses until new vehicles can be delivered.