Minority and women-owned businesses face discrimination while attempting to win federal passenger rail contracts, businesses owners told the House Transportation & Infrastructure Committee on Tuesday.

“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,” said Kenneth Canty, who runs several companies, one of which has worked in railroad station reconstruction.

Canty said that large firms discriminating against minority subcontractors is common because it’s profitable. “You've got a lot of these bad actors out and they're typically large companies because they get away with this stuff,” he said.

“I think the most effective thing you can do is make it part of the the criteria for picking companies to do this work, if they have any of this in their background it needs to be used in evaluating if you want to use them for work because correspondingly there are some real good firms out there — medium medium sized, $2-300 million dollar range who they started off as small guys and they're not necessarily minority but they started off as small guys and they just don't tolerate this stuff,” Canty said.

“They haven't gotten so big where racism is actually profitable to them. That's the thing is the racism is profitable and discriminatory acts are profitable to these people that's why they continue doing it

The fact that there is no DBE program in the Federal Railroad Administration came as a surprise to Representative Donald Payne Jr., the chair of the Subcommittee on Railroads, Pipelines and Hazardous Materials. 

“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,” Rep. Payne said.

The subcommittee will work on conducting a disparity study on minority and women-owned businesses participation in FRA grants and loan programs.

Watch the full hearing here: