Editor's Notebook: Reforming procurement practices top of mind for public transit’s business community

In my first editor’s notebook of 2026, I focused on what transit agencies were telling us was going to be their biggest challenge of the year—which was communicating transit’s value.  

Coming back from the American Public Transportation Association’s (APTA) Business Members Annual Meeting, I heard a number of challenges the private sector is facing and what their priorities will be for this upcoming year. Importantly, just like transit agencies, the business community is still recovering from the COVID-19 pandemic. Supply chains are affecting inventory, tariffs are impacting contracts and a workforce shortage is hitting small businesses especially hard. To help address these challenges, businesses are working to be more nimble, leading efforts to minimize risk and ensuring they have a seat at the table for surface transportation reauthorization conversations.  

Tying together all of these themes was one of the biggest drivers of conversation: procurement reform. Whether it’s dealing with price escalation due to tariff impacts, reducing customization or better balancing risk via terms and conditions, companies from OEMs to sub-suppliers and consultants all have skin in the game.  

Business members noted during the conference that customizing bus vehicles can lead to higher upfront and long-term costs due to redesign, lack of after-market replacement parts and warranty challenges. APTA’s Bus Task Force 2.0 has made significant progress in standardizing bus procurement guidelines. Interested parties can now find the interactive files on APTA’s website, which includes technical specifications and terms and conditions language. Task force members shared that buses procured through this white book may be delivered faster and cost less. A standing committee plans to maintain these guidelines and continue working on standards for floor layouts and cybersecurity. Work is in the early stages of revising technical standards and terms and conditions for light-rail vehicles.  

However, where standardization may work best for vehicles and rolling stock, technology vendors shared overly prescriptive requests for proposals can stifle innovation. Early collaboration and more stakeholder engagement were emphasized to ensure agencies receive a solution best suited for their needs. They also voiced how open architecture and interoperability would help improve service reliability, emphasizing that sharing data and establishing partnerships would lead to better outcomes for customers. 

Regardless of what is being procured, every contract comes with some level of risk that’s typically spelled out in the terms and conditions. The language used today puts most risk on the private side, which leads to suppliers and consultants alike needing to acquire costly insurance—if the type of insurance is even available—and exposing them to other penalties. These risks are therefore reflected in the final price. Price escalations and payment milestones are also an ongoing challenge. Price escalations that started during the pandemic are ongoing due to tariffs, coupled with intense inflation. Without having contractual language that addresses potential cost increases, businesses note it’s difficult to bid on and lock in new contracts with a price point that could be two years out.  

The business community’s stance is that more balanced risk between parties is in everyone’s best interest. More balanced risk can lead to more bids on contracts; more bids can lead to more competitive pricing; and more competition can lead to more innovation.