Metro is embroiled in a federal court battle with several construction companies over the transit authority's plans to award a $50 million contract to build a subway station on the long-delayed Green Line in Washington's low-income Shaw area.
At issue are allegations that a black-owned company seeking to do part of the work is a "sham." Metro officials refused to award the contract to a construction group that included the minority-run company. The rejected bidders then asked a federal judge to halt action on the project.
The dispute is under consideration by Judge Louis F. Oberdorfer in U.S. District Court here. Oberdorfer has not indicated when he will rule on the issue.
Metro officials have warned that any court order blocking work on the Shaw station could further delay the Green Line, the only unopened route in the planned 103-mile Metro system.
The Shaw station at Seventh Street NW, between R and S streets, has been scheduled to open in 1990.
The conflict also appears to reflect stepped-up efforts by Metro officials in recent years to increase awards of contracts and subcontracts to black-owned and other "disadvantaged" companies and to clamp down on abuses. The agency has tightened measures to screen out firms found to be fronts for white-run companies.
The current dispute centers on Vanessa General Builders Inc., a black-owned company based in Bridgeview, Ill.
Vanessa is a partner in a joint venture that submitted the lowest of 11 bids on the Shaw project. The venture, headed by the S.A. Healy Co. of McCook, Ill., estimated the cost of the job at $49.4 million.
The Healy-Vanessa bid sparked an immediate protest from the second-lowest bidder. The protest, which cited allegations labeling Vanessa a "sham," was filed by Mergentime Corp. of Flemington, N.J., and Perini Corp. of Framingham, Mass. The bid by the Mergentime-Perini joint venture was $50.9 million.
In March, Crain's Chicago Business, a weekly publication, listed Vanessa among several minority-run firms "fronting for white-owned concerns."
The article, which was cited in the Mergentime-Perini protest, said the fronts were uncovered in a three-month investigation by the weekly.
A federal investigation into the allegations surrounding Vanessa is under way, according to a U.S. Department of Transportation official.
Vanessa and Healy have denied the allegations, pointing to Vanessa's certification for minority business awards by government agencies in Chicago and elsewhere.
After an investigation, Metro officials rejected the Healy-Vanessa bid, saying they had found "a lack of good faith by the joint venture to comply" with minority business regulations.
The rules require that 20 percent of the work on subway construction projects be carried out by minority-owned companies.
"Vanessa would be a joint venture partner in name only and, in fact, would have no responsibility to manage or control the performance of any work, much less 20 percent," John S. Egbert, Metro's assistant general manager for design and construction, said in a three-page decision.
Metro officials contended that Vanessa had inadequate finances, lacked ability to obtain bonds, had no line of credit and would have no clear role in managing the Shaw project.
"Allowing an award under such circumstances has the effect of compromising the integrity of the competitive bid system," Metro's lawyers asserted.
The Healy-Vanessa group argued in its lawsuit that it has repeatedly shown a "commitment to meet" minority business requirements and that it should have been permitted by Metro to substitute other minority-owned companies for Vanessa after Vanessa was disqualified.
The joint venture said Metro had "no rational basis" for its actions and described the agency's refusal to accept its bid as "improper and without justification."
If Oberdorfer allows Metro to proceed with the Shaw project, the agency's board of directors is expected to award a contract soon, possibly Thursday. The judge initially refused a request by the Healy-Vanessa group to issue a temporary ban, citing Metro's agreement not to act before then.
Construction of the Green Line has been stalled repeatedly by lawsuits, neighborhood controversies and shortages of funds. In the past year, all major disputes over the line's proposed route have been settled, and Metro officials have begun negotiations to seek further federal funds for the line.
The court fight over the Shaw project is among several recent controversies involving minority businesses and other racial issues.
In April, Metro officials rejected all bids for a parking garage at the Green Line's planned Anacostia station, citing inadequate minority business participation. New bids are now being reviewed. In the second round, the lowest bid rose to $11.9 million, almost $900,000 higher than in the initial bidding.
Last fall, Metro officials temporarily delayed awarding a contract to excavate subway tunnels for the Green Line under the Anacostia River because of allegations that one company had business ties to South Africa.
Officials eventually awarded the contract after concluding that the link was "very remote."