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Minority business owners say they face discrimination in rail industry

"The majority of these minority contractors are usually taken out before they can even qualify for work for the railroads,” one business owner said.

Minority- and women-owned businesses face discrimination and other hardships while trying to obtain federal passenger rail contracts, the owners of several such companies told a House Transportation and Infrastructure subcommittee on Tuesday.

There’s a concerted effort by large prime contractors and owners to keep Black contractors out of federally funded infrastructure and the rail industry, said Kenneth Canty, who operates several companies including Freeland Construction, which has reconstructed railroad stations in several states.

“From a very young age, my life dream was to work on bridges,” Canty recalled, saying he was inspired by road trips he took with his father from Boston to Baltimore to see his ailing grandmother.

“There’s no coincidence that there’s a dearth of minority contractors who are in the rail infrastructure industry. The majority of these minority contractors are usually taken out before they can even qualify for work for the railroads,” he said.

Tuesday’s congressional hearing titled “Does Discrimination Exist in Federal Passenger Rail Contracting?” was to examine whether a Disadvantaged Business Enterprise program should be created for the Federal Railroad Administration to ensure minority contractors receive fair access to government grant money for passenger rail infrastructure projects.

The program, overseen by the Department of Transportation, is designed to increase participation of minority- and women-owned businesses in federally-funded highway, transit, airport and highway safety contracting projects.

The program already applies to several federal agencies under the Transportation Department, but it does not cover the Federal Railroad Administration or related passenger rail work.

Subcommittee on Railroads, Pipelines and Hazardous Materials  members said it's unclear why such a program doesn't exist.

Rep. Donald Payne Jr., D-N.J., who became the subcommittee chair in January, said one of his first priorities was to try to establish the Disadvantaged Business Enterprise program at the Federal Railroad Administration.

“Imagine my surprise when I found out that there,” wasn’t one, he said at the start of Tuesday’s hearing. “Unfortunately, I have since learned that much work still needs to be done to ensure that everyone has a fair shot at obtaining work on federal passenger rail contracts.”

Congressional leaders say they want to find out if there is discrimination in the rail section and, if so, determine how best to rectify it.

Minority contractors should have a fair shot at obtaining work on federal passenger rail contracts, Payne said.

“I know as a Black man, I know that feeling when people treat you differently because of the color of your skin. I know that when companies conspire against a supplier to shut out the only minority firm manufacturing a particular product, you’re being discriminated against,” he said.

Melvin Clark said that although his company, G.W. Peoples Contracting Company, has more than $22 million in annual sales, he’s faced discrimination in the passenger rail market over the years, adding many private railroad contractors don’t hire Black companies for high-profile jobs.

“We are more than qualified to do the work,” said Clark, whose company specializes in heavy rail construction, maintenance, repair, rehabilitation and track demolition.

Another witness, Victoria Malaszecki, president of Envision Consultants, said she’s faced hardships as a woman.

“I realize that I have become desensitized to the systemic discrimination that happens daily to me based on my gender. I thought that because I had worked hard, started from nothing, raised a family and am running a successful business that I am respected and equal to a man, but I am not,” she said.  

Rep. Hank Johnson, D-Ga., said he’s long been an advocate of making sure minorities in business are treated equally. 

“Unfortunately, however, there is no DBE program for federal funds administered under the Federal Railroad Administration despite systemic discrimination based on race and sex,” he said.

Rep. Marilyn Strickland, D-Wash., said more minority businesses in the rail industry are likely facing similar circumstances.

“They’ve been denied contracts, opportunities and fair consideration,” she said. 

Rep. Rick Crawford, R-Ark., asked the witnesses what the biggest barrier is for receiving passenger rail contracts.

“It is extremely difficult to compete for business when we cannot show any experience. And we cannot show any experience because we have no opportunity to get it,” said Gnanadesikan Ramanujam, president and chief executive officer of Somat Engineering Inc. “That has been a challenge for us.” 

The subcommittee will now focus on a disparity study that will report on minority- and women-owned business enterprise activity related to the Federal Railroad Administration's major grant and loan programs, after which Congress could possibly look further into the matter.