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October 7, 1981

Walter L. JONES, Walter L. Jones Development Corporation, Plaintiffs,
NIAGARA FRONTIER TRANSPORTATION AUTHORITY (NFTA), Urban Mass Transportation Administration (UMTA) New York State Department of Transportation (NYSDOT), Neal Cavanaugh & Siegfried Construction Co., Inc., John Sanders & Slattery Associates, Inc., Darling, Herbert F. and Earl Francis & John W. Cowper Co., Inc., S. H. Bartholomew & Fruin/Colnon/Tom Trayler and Traylor Bros., William Sterling & Onyx Equipment Co., Victor Scaravilli & S. & M. McHugh Kenney, Oscar Rayford & Universal Supply Equipment & Construction Co., John M. Fuhrmann & Construction Industry Employers Association, Edward Cole & Tresco Distributions, Carmen A. Gallo & Amiga Construction, Emanuel Humes & Humes Contracting Co., Joseph Myles & Trash Land Trucking, Robert Chester & Keystone Steel, Robert L. Pitts & P & S Supply, James Lyels & L & W Concrete, DeVilus Gray & Aftco International Trading Company, Paul Harrison & Downtown Dump Truck Service, Dean Williams & Native American Construction Co., William Taborn& Nelson Peters, Associates, Donald J. Blair & Building Trades Council of Buffalo & Vicinity, Ronald M. Fino & Laborers Local Union No. 210, Joseph F. Colern & Michael Fitzpatrick, Iron Workers Local Union No. 6, Leonard S. Coniglio & Cement Mason's Local Union No. 511, Herman F. Bodewes & Carpenters District Council, LeoHopkins & Operating Engineers Local Union Nos. 17, 17A, 17B, Lawrence J. Stroh & National Electrical Contractors Assc., Plumbing Contractors Association of Erie County, NY., Inc., Defendants

The opinion of the court was delivered by: ELFVIN


This civil rights action, commenced in the winter of 1980, revolves around the contracting practices of the Niagara Frontier Transportation Authority ("the NFTA") in the construction of the City of Buffalo's Light Rail Rapid Transit System ("the LRRT"). Plaintiff, *fn1" the Walter L. Jones Development Corporation, is a small, non-union general contracting firm which the NFTA has certified as a Minority Business Enterprise ("MBE"). The gravamen of the corporation's complaint is that defendants have individually and collectively discriminated against it by their refusal to award it prime contracts and to work with it on the LRRT construction project, thereby flouting their obligations under various provisions of the civil rights laws including, inter alia, the Fifth and Fourteenth Amendments to the United States Constitution, 42 U.S.C. §§ 1981, 1983, 1985, 2000d; section 19 (49 U.S.C. § 1615) of the Urban Mass Transportation Act ("the UMTA") of 1964, as amended (Pub.L. 95-599); and 400 C.F.R. § 23 et seq.

 Immediately before the court is plaintiff's motion for a preliminary injunction. The corporation seeks to prevent the NFTA from awarding two contracts on the LRRT project to prime contractors other than itself. Not surprisingly, plaintiff also requests the court to order the NFTA to award these two contracts to itself.

 The parties appeared in court Friday, August 21, 1981. Following oral argument I ordered the NFTA to refrain from taking further action regarding either of the disputed contracts. I also directed the parties to submit memoranda of law and to reappear in court on August 26, 1981 to provide additional relevant information.

 I have carefully reviewed the parties' pleadings, affidavits, relevant exhibits and legal briefs. For the reasons discussed below, I find that plaintiff has failed to satisfy its burden of showing that it is entitled to the extraordinary and drastic preliminary relief it desires.

 Factual Background

 Each of the contracts at issue entails the "cut and cover" construction of an underground subway station on the 6.4 mile LRRT system. Contract No. 1B4021 encompasses the substation at Allen and Main Streets and Contract No. 1B4032 involves the substation at Summer and Best Streets. These two construction jobs are apparently the last of seventeen prime contracts on the LRRT project to be awarded by the NFTA and approved by the UMTA. Once Contracts Nos. 1B4021 and 1B4032 are granted, the bidding and contracting process will be finished; no other contracts are to be awarded. Only the actual construction work will remain to be completed.

 It is undisputed that plaintiff submitted a bid of $ 10,418,487.50 for Contract No. 1B4032. Such bid was the fifth lowest of the bids, but extremely close to the engineer's estimate of $ 10,418,899.50. John W. Cowper Co., Inc. the low bidder, submitted a bid of $ 9,885,000.00. According to the parties, the NFTA awarded Contract 1B4032 to Cowper August 10, 1981. The final agreement has not yet been signed by all the parties, still needing the imprimatur of the NFTA's Contracting Officer.

 Contract No. 1B4021 has not yet been awarded. *fn2" However, the attorney for the NFTA indicated at oral argument August 21, 1981 that his client intended to award the prime construction contract to Albert Elia Building Co., Inc. Submitting a bid of $ 11,196,328.00, Elia was the second lowest bidder for the contract. Plaintiff was the low bidder with a bid of $ 8,725,292.00. The engineer's estimate for Contract No. 1B4021 was $ 9,640,016.73.

 With neither contract bid did plaintiff submit a 10% bid bond as required of all bidders by the bid specifications. According to the affidavit submitted by Theodore Beck, General Manager of the Metro Construction Division of the NFTA, plaintiff's failure to do so was a major reason its bids were rejected by the NFTA. A second critical consideration for denying plaintiff either contract appears to be NFTA's perception that plaintiff is not a "responsible and responsive" bidder. According to affiant Beck, the NFTA drew its conclusion from plaintiff's lack of sufficient financial resources (plaintiff had a total of $ 974 in corporate cash as of April 30, 1981), lack of necessary equipment (less than $ 50,000 worth) and lack of major contracting experience (according to plaintiff's experience questionnaire, the corporation has not engaged in a construction project valued at more than $ 136,000 in the past five years). Although plaintiff conceded at oral argument August 26, 1981 that it was a "broke" corporation, it strenuously rejected NFTA's contention that it was incapable of performing either of the contracts.


 As a threshold matter, defendants contend that plaintiff has failed to exhaust the administrative grievance procedures available to it under 49 C.F.R. § 23.73. As such, defendants maintain, plaintiff is precluded from seeking judicial redress. *fn3"

 Defendants' argument is without merit for several reasons. Initially, whatever else may be the case with respect to other types of lawsuits, civil rights actions are barred for failure to exhaust available administrative remedies only in limited circumstances. The United States Court of Appeals for the Second Circuit has held that conditions appropriate thereto include the assured existence of "speedy, sufficient and readily available administrative remedies remaining open to pursue." Swan v. Stoneman, 635 F.2d 97, 103 (2d Cir. 1980) (citing Morgan v. LaVallee, 526 F.2d 221, 224 (2d Cir. 1975)). Such administrative procedures must provide for representation by counsel, testimony under oath and the power to subpoena witnesses and papers, Gonzalez v. Shanker, 533 F.2d 832, 837 (2d Cir. 1976), and must include adequate procedures for the resolution of factual questions. Plano v. Baker, 504 F.2d 595, 598 (2d Cir. 1974); Swan v. Stoneman, supra, at 104. Finally, exhaustion is unnecessary if the administrative remedy is inadequate to vindicate the complainant's rights. Riley v. Ambach, -- - F.2d -- , -- (2d Cir., 1981); Patton v. Dumpson, 498 F. Supp. 933, 940 (S.D.N.Y.1980).

 Many of these components of a wholly adequate grievance procedure are not present in this case. The procedures outlined in 49 C.F.R. § 23.73 provide only a mechanism through which a grievant can file a written complaint which will trigger a unilateral investigation by the Secretary of Transportation. 49 C.F.R. § 23.73(b). If the Secretary finds failure to comply by the recipient (e.g., the NFTA) conciliation procedures may be initiated by the Secretary with the recipient. 49 C.F.R. §§ 23.73(d), 23.81. If ...

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