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Traffic-signal maker flashing red over Indianapolis contract

September 4, 2010

The American Recovery and Reinvestment Act was intended to put Americans to work during the economic crash.

For a maker of LED traffic signals in the United States, at least, ARRA’s buy-American provision hasn’t always been the advantage it expected when bidding on contracts.

LED signal maker Dialight Corp., based in New Jersey, and Michigan-based traffic signal vendor Carrier & Gable, hoped the act’s broad intent of putting Americans to work might help them in a bid to supply the city of Indianapolis with 17,000 LED traffic signals.

The city is taking about $1 million of the ARRA money it’s getting through the Energy Efficiency and Conservation Block Grant to swap its traditional incandescent-bulb signals with more efficient LED versions to save $250,000 a year in electricity.

The Dialight/Carrier & Gable team’s bid was just $120 more than the winning, $570,250 bid from Indianapolis-based Morphey Construction, which will use signals sourced from Taiwan-based Leotek.

Leotek commands about one-third of the LED traffic signal market in the United States.

As it turns out, the “buy American” intent of the ARRA didn’t help Dialight. The federal government has waived certain buy-American provisions when it comes to some energy-efficiency projects—LED traffic lights among them.

A Department of Energy memorandum of decision issued in February states that LED lights and a handful of other electric products “are manufactured almost exclusively in China and Mexico.”

It explains that certain items are excluded from buy-American provisions if a good is not produced or manufactured in the United States “in sufficient and reasonably available quantities and of a satisfactory quality.”

Dialight, whose parent company is British, said it employs about 110 people at its traffic signal manufacturing plant in Roxboro, N.C., and says its competitor makes its signals offshore.

“I think that’s the shame of it, really. The stimulus program was to stimulate growth” in U.S. jobs, said Dan Polito, chief marketing officer at Dialight’s 90-employee New Jersey operation.

Dialight also claims its LED signals are about 20 percent more efficient than Leotek’s and thus would save Indianapolis about $11,000 a year, plus reduce carbon dioxide emissions 77 metric tons annually.

The company said it’s been trying to appeal to Indianapolis city officials, but gets no response. Dialight also claims that, despite the buy-American waiver in the federal stimulus for LED signals, the city specified in bid documents that consideration would be given for U.S.-based manufacturing.

Department of Public Works spokesman Steve Hardiman reiterated the federal government’s buy-American waiver for LED lights.

“With this waiver in mind, we chose the lowest responsive bidder per purchasing requirements,” Hardiman said. “The city awarded Morphey Construction the LED contract based upon their status as the low bidder.”

As for Dialight’s assertion that its lights are more efficient than Leotek’s, Hardiman added: “At the time of the process, there was no objective source information presented that demonstrates Dialight’s LED traffic signals as more efficient.”

Polito countered that the $120 difference in the bids is too minute “for someone not to do due diligence.”

The winning bid will provide additional business for an Indianapolis firm—Morphey Construction—which will install the lights.•

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