Tucson will collect about $1.7 million in liquidated damages from Vigor Works because the company was late in delivering streetcar vehicles, delaying the operation of the streetcar line.
Vigor is the new name of Oregon Iron Works, which was the parent company of now-closed United Streetcar. The company manufactured Tucson’s eight streetcars. It delivered the first one nearly a year late, delaying operations.
Under Tucson’s contract with the company, the city could have collected up to $2.9 million in late fees. Vigor disputed the amount it owed the city, and the two sides reached a settlement agreement this week.
In negotiations with the company, “we agreed that the amount of damages attributable to OIW’s (now, Vigor’s) delays was $1,695,600,” City Attorney Mike Rankin said in an email.
The damages won’t be paid in cash. Instead, the company agreed to provide parts and labor beyond its original contract amount, according to the settlement agreement.
Tucson chose Oregon Iron Works because of a “buy American” rule that came as a condition of the federal grant money the city used to pay for the streetcar project. The rule and grant were part of the American Recovery and Reinvestment Act.
The company was the first in 60 years to build streetcars in the U.S. and Tucson was one of its few customers.
The electric vehicles cost $38 million. The contract with the city also included replacement parts.
