A South Carolina company that builds specialized rail equipment has filed a federal lawsuit accusing the Greater Cleveland Regional Transit Authority of approving the design for a $3.2 million work locomotive, then rejecting the finished vehicle and refusing to pay $658,240 for its delivery. Geismar North America, Inc. says GCRTA also seized $2.3 million already paid toward the project and moved to claim the company's performance bond after the vehicle allegedly failed acceptance testing earlier this year.
The lawsuit, filed Monday in the U.S. District Court for the Northern District of Ohio under case number 1:26-cv-01874, lays out a dispute that hinges on a single technical phrase buried in a years-old solicitation. As reported by Cleveland.com, Geismar says GCRTA's 2021 solicitation appeared to require the locomotive to tow 90 tons at 40 mph on a 5% grade, a steep incline that would be an unusually demanding benchmark for this class of maintenance vehicle. GCRTA officials have countered that the real requirement was towing 90 tons at 40 mph on level track, with the 5% grade specification applying only to a slower, roughly 5 mph towing scenario, according to the lawsuit.
A Contract Years in the Making
GCRTA's Board of Trustees originally authorized the deal, Contract No. 2021-089, in April 2022, agreeing to pay Geismar up to $3,291,204.80 to build a new work locomotive with a cab crane, flat deck, Tier 4 diesel engine, and narrower profile, according to GCRTA board records. The vehicle was meant to replace an aging work car and consolidate snowplowing, heavy equipment hauling, and disabled-train towing into a single machine. GCRTA's July 2021 request for proposals drew downloads from 29 interested vendors, but only three submitted formal bids before Geismar was chosen based on its product design, reputation, and pricing.
Geismar says it relied on GCRTA's specifications when designing and pricing the vehicle, and finished building it in June 2025, delivering it that same month for inspection, commissioning, and acceptance testing. The company argues GCRTA's interpretation of the towing requirement contradicted the agency's own pre-bid clarification and the design it had already approved. Beaufort, South Carolina-based Geismar operated for more than 40 years under the name Modern Track Machinery before rebranding in 2018, and has supplied rail equipment to transit agencies including MARTA, NJ Transit, PATH, and SEPTA.
Testing Dispute Escalates
By February, GCRTA had listed the diesel engine's pull-load requirement as 40 mph at a 5% grade during testing and determined that the travel-speed requirement had not been achieved, according to the lawsuit. GCRTA said the locomotive failed acceptance testing and told Geismar the vehicle had no value to the agency. GCRTA also moved that month to recover money already paid to Geismar and filed a claim against the company's performance bond.
Geismar asked whether the 40-mph requirement applied to level track and, in March, submitted a plan to address the remaining testing issues. GCRTA refused to resume testing and instead demanded that Geismar remove the locomotive from its facility, the lawsuit states. In May, GCRTA terminated the contract for default, according to the filing. Geismar is now asking the court to reform the agreement, declare that GCRTA improperly interpreted the contract, and award damages.
A Second Contract Caught in the Crossfire
The dispute has spilled into a separate deal between the two parties. In August 2024, GCRTA awarded Geismar a second contract, worth $5,165,257, to build an Overhead Catenary Maintenance Vehicle, or line car, intended to replace PWR-032, a Tokyu line car built in 1977 that could no longer clear the updated platform dimensions required by GCRTA's newer train fleet, per GCRTA committee records. Geismar had been selected as the lowest responsive bidder over competitor Plasser American Corp.
Geismar accuses GCRTA of improperly terminating that second, unrelated contract as well. The company says GCRTA has suspended the line car project and has not paid for work already completed on it, even though the contract was valued separately from the disputed work locomotive. GCRTA had planned to use $2.6 million in federal funds to help pay for the line car.
Why the Timing Matters
The standoff lands in the middle of GCRTA's largest capital undertaking in agency history: a $450 million modernization of its 34-mile rail network that includes replacing the entire 40-year-old passenger fleet with up to 60 new Siemens S200 light rail vehicles, according to Cleveland Magazine. That broader overhaul requires retrofitting maintenance facilities and altering platform clearances across the Red, Blue, and Green lines so a single standardized train model can serve every route, which is why updated support vehicles like the work locomotive and line car became necessary in the first place.
The rail fleet modernization program is funded through $241.2 million in federal allocations alongside $104.46 million in GCRTA funds, $60.54 million from the Ohio Department of Transportation, and $28.8 million from the Northeast Ohio Areawide Coordinating Agency, according to GCRTA's own funding breakdown. Both of Geismar's contracts had been approved with a 0% Disadvantaged Business Enterprise goal, reflecting the highly specialized, custom nature of the equipment involved.
Cleveland.com reporter Adam Ferrise, who covers federal courts for the outlet and Plain Dealer and has worked there since 2013, first detailed the filing. The case adds to a run of scrutiny GCRTA has faced this year, including a bus crash investigation and disruptions on the Red Line that pushed commuters onto shuttle buses earlier this summer.
