[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                    DOES DISCRIMINATION EXIST IN FEDERAL 
                    PASSENGER RAIL CONTRACTING?

=======================================================================

                                (117-33)

                             REMOTE HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON RAILROADS, PIPELINES,
                        AND HAZARDOUS MATERIALS

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            NOVEMBER 9, 2021

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure
             
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


     Available online at: https://www.govinfo.gov/committee/house-
     transportation?path=/browsecommittee/chamber/house/committee/
                             transportation
                             
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
47-135 PDF                 WASHINGTON : 2022                     
          
-----------------------------------------------------------------------------------   
 
             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

  PETER A. DeFAZIO, Oregon, Chair
SAM GRAVES, Missouri                 ELEANOR HOLMES NORTON,
DON YOUNG, Alaska                      District of Columbia
ERIC A. ``RICK'' CRAWFORD, Arkansas  EDDIE BERNICE JOHNSON, Texas
BOB GIBBS, Ohio                      RICK LARSEN, Washington
DANIEL WEBSTER, Florida              GRACE F. NAPOLITANO, California
THOMAS MASSIE, Kentucky              STEVE COHEN, Tennessee
SCOTT PERRY, Pennsylvania            ALBIO SIRES, New Jersey
RODNEY DAVIS, Illinois               JOHN GARAMENDI, California
JOHN KATKO, New York                 HENRY C. ``HANK'' JOHNSON, Jr., 
BRIAN BABIN, Texas                   Georgia
GARRET GRAVES, Louisiana             ANDRE CARSON, Indiana
DAVID ROUZER, North Carolina         DINA TITUS, Nevada
MIKE BOST, Illinois                  SEAN PATRICK MALONEY, New York
RANDY K. WEBER, Sr., Texas           JARED HUFFMAN, California
DOUG LaMALFA, California             JULIA BROWNLEY, California
BRUCE WESTERMAN, Arkansas            FREDERICA S. WILSON, Florida
BRIAN J. MAST, Florida               DONALD M. PAYNE, Jr., New Jersey
MIKE GALLAGHER, Wisconsin            ALAN S. LOWENTHAL, California
BRIAN K. FITZPATRICK, Pennsylvania   MARK DeSAULNIER, California
JENNIFFER GONZALEZ-COLON,            STEPHEN F. LYNCH, Massachusetts
  Puerto Rico                        SALUD O. CARBAJAL, California
TROY BALDERSON, Ohio                 ANTHONY G. BROWN, Maryland
PETE STAUBER, Minnesota              TOM MALINOWSKI, New Jersey
TIM BURCHETT, Tennessee              GREG STANTON, Arizona
DUSTY JOHNSON, South Dakota          COLIN Z. ALLRED, Texas
JEFFERSON VAN DREW, New Jersey       SHARICE DAVIDS, Kansas, Vice Chair
MICHAEL GUEST, Mississippi           JESUS G. ``CHUY'' GARCIA, Illinois
TROY E. NEHLS, Texas                 ANTONIO DELGADO, New York
NANCY MACE, South Carolina           CHRIS PAPPAS, New Hampshire
NICOLE MALLIOTAKIS, New York         CONOR LAMB, Pennsylvania
BETH VAN DUYNE, Texas                SETH MOULTON, Massachusetts
CARLOS A. GIMENEZ, Florida           JAKE AUCHINCLOSS, Massachusetts
MICHELLE STEEL, California           CAROLYN BOURDEAUX, Georgia
                                     KAIALI`I KAHELE, Hawaii
                                     MARILYN STRICKLAND, Washington
                                     NIKEMA WILLIAMS, Georgia
                                     MARIE NEWMAN, Illinois
                                     TROY A. CARTER, Louisiana

     Subcommittee on Railroads, Pipelines, and Hazardous Materials

DONALD M. PAYNE, Jr., New Jersey, 
               Chair
ERIC A. ``RICK'' CRAWFORD, Arkansas  TOM MALINOWSKI, New Jersey
SCOTT PERRY, Pennsylvania            SETH MOULTON, Massachusetts
RODNEY DAVIS, Illinois               MARIE NEWMAN, Illinois
MIKE BOST, Illinois                  STEVE COHEN, Tennessee
RANDY K. WEBER, Sr., Texas           ALBIO SIRES, New Jersey
DOUG LaMALFA, California             ANDRE CARSON, Indiana
BRUCE WESTERMAN, Arkansas            FREDERICA S. WILSON, Florida
BRIAN K. FITZPATRICK, Pennsylvania   JESUS G. ``CHUY'' GARCIA, Illinois
TROY BALDERSON, Ohio                 MARILYN STRICKLAND, Washington,
PETE STAUBER, Minnesota                Vice Chair
TIM BURCHETT, Tennessee              GRACE F. NAPOLITANO, California
DUSTY JOHNSON, South Dakota          HENRY C. ``HANK'' JOHNSON, Jr., 
TROY E. NEHLS, Texas                 Georgia
MICHELLE STEEL, California           DINA TITUS, Nevada
SAM GRAVES, Missouri (Ex Officio)    JARED HUFFMAN, California
                                     STEPHEN F. LYNCH, Massachusetts
                                     JAKE AUCHINCLOSS, Massachusetts
                                     TROY A. CARTER, Louisiana
                                     PETER A. DeFAZIO, Oregon (Ex 
                                     Officio)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                 STATEMENTS OF MEMBERS OF THE COMMITTEE

Hon. Donald M. Payne, Jr., a Representative in Congress from the 
  State of New Jersey, and Chair, Subcommittee on Railroads, 
  Pipelines, and Hazardous Materials, opening statement..........     1
    Prepared statement...........................................     3
Hon. Eric A. ``Rick'' Crawford, a Representative in Congress from 
  the State of Arkansas, and Ranking Member, Subcommittee on 
  Railroads, Pipelines, and Hazardous Materials, opening 
  statement......................................................     4
    Prepared statement...........................................     4
Hon. Marilyn Strickland, a Representative in Congress from the 
  State of Washington, and Vice Chair, Subcommittee on Railroads, 
  Pipelines, and Hazardous Materials, prepared statement.........    43
Hon. Sam Graves, a Representative in Congress from the State of 
  Missouri, and Ranking Member, Committee on Transportation and 
  Infrastructure, prepared statement.............................    53

                               WITNESSES

Kenneth B. Canty, P.E., President and Chief Executive Officer, 
  Janus Materials, oral statement................................     5
    Prepared statement...........................................     7
Melvin E. Clark, Jr., Esq., Owner, Chairman, and Chief Executive 
  Officer, G.W. Peoples Contracting Company, Inc., oral statement    10
    Prepared statement...........................................    12
Victoria Malaszecki, President and Chief Executive Officer, 
  Envision Consultants, Ltd., oral statement.....................    15
    Prepared statement...........................................    17
Francisco Otero, Founder, President, and Chief Executive Officer, 
  PACO Group, Inc., oral statement...............................    21
    Prepared statement...........................................    22
Gnanadesikan ``Ram'' Ramanujam, P.E., President and Chief 
  Executive Officer, Somat Engineering, Inc., oral statement.....    24
    Prepared statement...........................................    25
Evalynn A. ``Eve'' Williams, President and Chief Executive 
  Officer, Dikita Enterprises, Inc., oral statement..............    29
    Prepared statement...........................................    31

                       SUBMISSIONS FOR THE RECORD

Submissions for the Record by Hon. Donald M. Payne, Jr.:
    Statement of Ian Jefferies, President and Chief Executive 
      Officer, Association of American Railroads.................    35
    Letter of November 22, 2021, from Laura C. Dutton, Former 
      Administrative Assistant, Atlantic Meridian Contracting 
      Corp., Inc.................................................    53
    Letter from Richard J. Ellis, Jr., Controller, Atlantic 
      Meridian Contracting Corp., Inc............................    54

                                APPENDIX

Question from Hon. Donald M. Payne, Jr. to Gnanadesikan ``Ram'' 
  Ramanujam, P.E., President and Chief Executive Officer, Somat 
  Engineering, Inc...............................................    57
  
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                            November 4, 2021

    SUMMARY OF SUBJECT MATTER

    TO:       Members, Subcommittee on Railroads, Pipelines, 
and Hazardous Materials
    FROM:   Staff, Subcommittee on Railroads, Pipelines, and 
Hazardous Materials
    RE:       Subcommittee Hearing on ``Does Discrimination 
Exist in Federal Passenger Rail Contracting?''



                                PURPOSE

    The Subcommittee on Railroads, Pipelines, and Hazardous 
Materials will meet on Tuesday, November 9, 2021, at 11:00 a.m. 
EDT in 2167 Rayburn House Office Building and via Zoom to hold 
a hearing titled ``Does Discrimination Exist in Federal 
Passenger Rail Contracting?'' The Subcommittee will hear 
testimony from witnesses from Janus Materials, G.W. Peoples 
Contracting Company, Envision Consultants, the PACO Group, 
Somat Engineering, and Dikita Engineering. The hearing will 
offer a chance to examine whether discrimination is present in 
federal passenger rail contracting.

                               BACKGROUND

    The U.S. Department of Transportation (USDOT) Disadvantaged 
Business Enterprise (DBE) Program was established to address 
discrimination against minority and women-owned businesses.\1\ 
The DBE program seeks to ensure those businesses are provided 
equal opportunities to compete for certain USDOT funded 
contracts administered by the Federal Highway Administration 
(FHWA), the Federal Aviation Administration (FAA), the Federal 
Transit Administration (FTA), and the National Highway Traffic 
Safety Administration (NHTSA).\2\ Currently, no such program 
exists for funds administered by the Federal Railroad 
Administration (FRA).
---------------------------------------------------------------------------
    \1\ USDOT Office of Civil Rights. Disadvantaged Business Enterprise 
(DBE) Program. U.S. Department of Transportation. Retrieved October 27, 
2021, from https://www.transportation.gov/civil-rights/disadvantaged-
business-enterprise
    \2\ 49 CFR 26.3.
---------------------------------------------------------------------------
    First established by federal regulation in 1980 as a 
minority and women's business enterprise program, the DBE 
program was later statutorily authorized for highway and 
transit transportation programs in 1983 by the Surface 
Transportation Assistance Act of 1982 (P.L. 97-424) to aid 
small businesses owned and operated by minorities facing 
historic and continuing discriminatory barriers to 
participation in the highways and transit programs.\3\
---------------------------------------------------------------------------
    \3\ USDOT Office of Civil Rights. Disadvantaged Business Enterprise 
(DBE) Program.
---------------------------------------------------------------------------
    DBE programs for women-owned businesses and the FAA's 
airport DBE program were primarily implemented by regulation 
until Congress enacted the Surface Transportation and Uniform 
Relocation Assistance Act of 1987 (P.L. 100-17) and the Airport 
and Airway Safety and Capacity Expansion Act of 1987 (P.L. 100-
223). These laws expanded the statutory authorization for 
highway, transit, and airport construction DBE programs to 
include women-controlled small businesses and codified the 
airport DBE program, respectively. The Airport and Airway 
Safety and Capacity Expansion Act also established a separate 
Airport Concession Disadvantaged Business Enterprise (ACDBE) 
Program administered by the FAA for airport concessions and 
related contracts.\4\ The highway and transit DBE program, the 
airport concession DBE program, and the airport construction 
DBE program are implemented pursuant to regulations established 
under 49 CFR part 26.
---------------------------------------------------------------------------
    \4\ Since the Airport and Airway Safety and Capacity Expansion Act 
P.L. 100-223 codified the airport construction DBE program and the 
ACBDE program, these programs do not require statutory reauthorization 
in the same manner as highway and transit DBE programs.
---------------------------------------------------------------------------
    Congress has regularly reauthorized the DBE program for 
highways and transit in successive surface transportation 
reauthorization bills, most recently with the enactment of the 
Fixing America's Surface Transportation (FAST) Act (P.L. 114-
94). H.R. 3684, the Infrastructure Investment and Jobs Act, 
reauthorized the surface DBE program.\5\
---------------------------------------------------------------------------
    \5\ In this memo, ``surface'' refers to highways and transit.
---------------------------------------------------------------------------

I. WHAT IS A DBE?

    For highways and transit and airport construction DBE 
program eligibility purposes, a DBE is defined as a small, for-
profit business where socially and economically disadvantaged 
individuals (1) own at least 51 percent of the economic 
interests of the entity, and (2) control and manage the 
business operations of the firm.\6\ A firm and its minority 
and/or women owners seeking certification as a DBE must meet: 
(1) an ownership and control test, (2) a personal net worth 
test, and (3) a size standard test, requirements for which are 
described in regulation.\7\
---------------------------------------------------------------------------
    \6\ 49 CFR 26.5.
    \7\ 49 CFR 26; 49 CFR 23.
---------------------------------------------------------------------------
    Under statute, ``socially disadvantaged'' refers to 
individuals or groups facing historic and ongoing 
discrimination, such as racial or ethnic prejudice or cultural 
bias due to membership in a particular group.\8\ Consistent 
with USDOT implementing regulations, minorities and women are 
presumed to be socially disadvantaged.\9\ Others may qualify as 
socially disadvantaged on a case-by-case basis.\10\
---------------------------------------------------------------------------
    \8\ 13 CFR 124.103.
    \9\ 49 CFR 26.67(a) and (b).
    \10\ 49 CFR 26.67(d).
---------------------------------------------------------------------------
    To be regarded as economically disadvantaged, an individual 
must, among other things, have a personal net worth that does 
not exceed $1.32 million, excluding the equity in the 
individual's primary residence and the value of their ownership 
interest in the firm seeking certification.\11\
---------------------------------------------------------------------------
    \11\ 49 CFR 26.67(a).
---------------------------------------------------------------------------
    To meet size standards for DBE eligibility and be regarded 
as a small business in the surface transportation sector, a 
business must meet the qualifications of a small business 
defined by the Small Business Administration (SBA) in 
accordance with the North American Industry Classification 
System (NAICS) codes relevant to the business and as defined by 
the annual gross receipts or employee number caps outlined for 
each industry code.\12\ In addition, the small business must 
not have average annual gross receipts over the firm's previous 
three fiscal years in excess of $23.98 million, regardless of 
the relevant NAICS code qualification.\13\
---------------------------------------------------------------------------
    \12\ 49 CFR 26.65(a).
    \13\ 49 CFR 26.65(b).
---------------------------------------------------------------------------

II. A DBE PROGRAM AT FRA

    Currently, FRA does not have specific statutory authority 
to administer a DBE program, unlike most other USDOT agencies. 
To authorize an FRA-administered DBE program, Congress must 
determine that there is need for such policy. Section 11310 of 
the 2015 FAST Act required FRA to conduct a disparity and 
availability study which will inform Congress of this need.
    This Subcommittee hearing will allow for Members to hear 
from six minority business leaders, each testifying to their 
personal experiences of discrimination on the basis of race or 
sex when working within the federally-funded passenger rail 
space.

                              WITNESS LIST

      Mr. Ken Canty, President and CEO, Janus Materials
      Mr. Melvin Clark, Chairman and CEO, G.W. Peoples 
Contracting Company
      Ms. Victoria Malaszecki, President and CEO, 
Envision Consultants
      Mr. Francisco Otero, President and CEO, PACO 
Group
      Mr. Gnanadesikan ``Ram'' Ramanujam, President and 
CEO, Somat Engineering
      Ms. Evalynn Williams, President, Dikita 
Engineering

 
    DOES DISCRIMINATION EXIST IN FEDERAL PASSENGER RAIL CONTRACTING?

                              ----------                              


                       TUESDAY, NOVEMBER 9, 2021

                  House of Representatives,
Subcommittee on Railroads, Pipelines, and Hazardous 
                                         Materials,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 11 a.m., in room 
2167 Rayburn House Office Building and via Zoom, Hon. Donald M. 
Payne, Jr. (Chair of the subcommittee) presiding.
    Members present in person: Mr. Payne, Jr.
    Members present remotely: Mr. Carson, Mr. Garcia of 
Illinois, Ms. Strickland, Mrs. Napolitano, Mr. Johnson of 
Georgia, Mr. Auchincloss, Mr. Carter of Louisiana, Ms. Norton, 
Mr. Crawford, Mr. Weber of Texas, Mr. LaMalfa, Mr. Fitzpatrick, 
Mr. Johnson of South Dakota, and Mrs. Steel.
    Mr. Payne. The subcommittee will come to order.
    I ask unanimous consent that the chair be authorized to 
declare a recess at any time during today's hearing.
    Without objection, so ordered.
    I also ask unanimous consent that Members not on the 
subcommittee be permitted to sit with the subcommittee at 
today's hearing and ask questions.
    Without objection, so ordered.
    As a reminder, please keep your microphones muted unless 
speaking. Should I hear any inadvertent background noise, I 
will request that the Member please mute their microphone.
    To insert a document into the record, please have your 
staff email it to [email protected].
    Good morning.
    When I had the honor of being selected by my colleagues to 
become the chairman of this subcommittee, one of my first 
priorities was seeing how I could bring equity to the rail 
sector.
    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.
    The first question I asked when I got the gavel was how we 
could strengthen the Disadvantaged Business Enterprise program 
at the Federal Railroad Administration. Imagine my surprise 
when I found out that there was no DBE program at the FRA.
    To be clear, today's hearing is not to debate the merits of 
creating a program. The purpose of today's hearing is to allow 
business owners to share their experiences of working in the 
rail sector. We are going to hear uncomfortable stories of very 
real discrimination that our witnesses have suffered. Today, 
our responsibility is to listen and reflect on each person's 
experience.
    I would be remiss if I didn't share my own experience. The 
question is often asked: How do you know when you are being 
discriminated against?
    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 are 
being discriminated against.
    I was fortunate. Because of Government intervention, that 
particular discrimination was stopped, although others have not 
been so lucky.
    The experiences we are going to hear today from our panel 
will be different than mine. The point of holding this hearing 
is to try to understand someone else's experience.
    I do not know what it is like to experience discrimination 
as a member of a different minority group, or what 
discrimination women face in an industry dominated by men. That 
is why we have invited a diverse panel of witnesses to share 
their unique experiences.
    I commend our witnesses for being courageous enough to 
share extremely personal and often painful experiences that 
should not happen in any setting, and least of all in 
professional settings.
    It is not easy to come forward and describe when 
discrimination has happened to you, but it is a necessary story 
to tell. I encourage all Members to listen closely to these 
experiences.
    Some Members may have gone through similar things and 
others may have not. We can't change what happened to our 
witnesses, but we have the privilege and the responsibility of 
being able to correct these injustices to ensure that future 
generations will be playing on a level field.
    What I want to prevent are instances where business owners 
decide that it isn't even worth trying to bid for work because 
they know that they will be judged by what they look like 
rather than the quality of their work.
    I commend the Biden administration for taking bold steps to 
ensuring diversity and inclusion. Secretary Buttigieg has 
committed to working with me and this committee to identify 
ways to create a fair shot to compete for Federal rail 
contracts.
    Information gathered from today's hearing will help inform 
Congress whether actions must be taken to address 
discrimination in the transportation sector. It is my sincere 
hope that today, Members can put themselves in other people's 
shoes, if just for a moment, to understand the damage a well-
entrenched system of discrimination can cause to business 
owners simply trying to provide for their families and succeed 
in the rail industry.
    Some uncomfortable conversations need to be had to bring 
about a positive result. These conversations are not easy, but 
they are necessary.
    I again thank the witnesses for being here, and I look 
forward to their testimony.
    I now call on the ranking member of the subcommittee, Mr. 
Crawford, for an opening statement.
    [Mr. Payne's prepared statement follows:]

                                 
 Prepared Statement of Hon. Donald M. Payne, Jr., a Representative in 
   Congress from the State of New Jersey, and Chair, Subcommittee on 
             Railroads, Pipelines, and Hazardous Materials
    Good morning. When I had the honor of being selected by my 
colleagues to become Chair of this subcommittee, one of my first 
priorities was seeing how I could help bring equity to the rail sector.
    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.
    The first question I asked when I got this gavel was how we could 
strengthen the Disadvantaged Business Enterprise program at the Federal 
Railroad Administration. Imagine my surprise when I found out that 
there was no DBE program at the FRA.
    To be clear, today's hearing is not to debate the merits of 
creating a program. The purpose of today's hearing is to allow 
business-owners to share their experiences of working in the rail 
sector.
    We are going to hear uncomfortable stories of the very real 
discrimination that our witnesses have suffered.
    Today, our responsibility is to listen and reflect on each person's 
experience.
    I would be remiss if I didn't share my own experience. The question 
is often asked: ``How do you know you are being discriminated 
against?''
    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 are 
being discriminated against.
    I was fortunate. Because of government intervention, that 
particular discrimination was stopped. Others have not been so lucky.
    The experiences we are going to hear today from our panel will be 
different than mine. The point of holding this hearing is to try to 
understand someone else's experience.
    I do not know what it is like to experience discrimination as a 
member of a different minority group or what discrimination women face 
in an industry dominated by men.
    That is why we have invited a diverse panel of witnesses to share 
their unique experiences.
    I commend our witnesses for being courageous enough to share 
extremely personal and often painful experiences that should not happen 
in any setting, and least of all in a professional setting.
    It is not easy to come forward and describe when discrimination has 
happened to you, but it is a necessary story to tell.
    I encourage all members to listen closely to these experiences. 
Some members may have gone through similar things and others may not 
have.
    We can't change what happened to our witnesses but we have the 
privilege and responsibility of being able to correct these injustices, 
to ensure that future generations will be playing on a level field.
    What I want to prevent are instances where business owners decide 
that it isn't even worth trying to bid for work because they know they 
will be judged by what they look like rather than the quality of their 
work.
    I commend the Biden administration for taking bold steps toward 
ensuring diversity and inclusion.
    Secretary Buttigieg has committed to working with me and this 
committee to identify ways to create a fair shot to compete for federal 
rail contracts.
    Information gathered from today's hearing will help inform Congress 
whether actions must be taken to address discrimination in the 
transportation sector.
    It is my sincere hope that today, members can put themselves in 
other people's shoes, if just for a moment, to understand the damage a 
well-entrenched system of discrimination can cause to business owners 
simply trying to provide for their families and succeed in the rail 
industry.
    Some uncomfortable conversations need to be had to bring about a 
positive result. These conversations are not easy, but they are 
necessary.
    I again thank the witnesses for being here and I look forward to 
their testimony.

    Mr. Crawford. Thank you, Chairman Payne, for holding the 
hearing.
    Thank you to our witnesses for participating today.
    Today's hearing will examine the need for a Disadvantaged 
Business Enterprise, or DBE, program, within the Department of 
Transportation for passenger rail contractors to ensure equal 
and fair access to Government grant money for rail 
infrastructure projects.
    The DBE program currently applies to airport construction, 
airport concessions, and surface transportation construction 
programs, but does not to passenger rail work.
    This committee has demonstrated a bipartisan commitment to 
DBE programs and to promoting fair and full access to 
transportation contracting opportunities.
    While the Federal Railroad Administration doesn't currently 
have statutory authority to administer a DBE program for 
passenger rail, the FRA has demonstrated its support of the DBE 
program objectives.
    The 2015 FAST Act directed the FRA to conduct a nationwide 
disparity and availability study on participation by minority-, 
women-, and veteran-owned small businesses in federally funded 
intercity passenger rail transportation projects. The study 
will inform Congress on whether legislation is needed to create 
a DBE program for passenger rail contracting.
    I commend the chair for holding the hearing today. And I 
yield back the balance of my time.
    [Mr. Crawford's prepared statement follows:]

                                 
Prepared Statement of Hon. Eric A. ``Rick'' Crawford, a Representative 
      in Congress from the State of Arkansas, and Ranking Member, 
     Subcommittee on Railroads, Pipelines, and Hazardous Materials
    Thank you, Chair Payne, for holding this hearing, and thank you to 
our witnesses for participating.
    Today's hearing will examine the need for a Disadvantaged Business 
Enterprise (DBE) Program within the Department of Transportation for 
passenger rail contractors to ensure equal and fair access to 
government grant money for rail infrastructure projects. The DBE 
program currently applies to airport construction, airport concessions, 
and surface transportation construction programs, but not to passenger 
rail work.
    This Committee has demonstrated a bipartisan commitment to the DBE 
program and to promoting fair and full access to transportation 
contracting opportunities.
    While the Federal Railroad Administration doesn't currently have 
statutory authority to administer a DBE program for passenger rail, the 
FRA has demonstrated its support of the DBE program objectives.
    The 2015 Fixing America's Surface Transportation Act, or FAST Act, 
directed the FRA to conduct a nationwide disparity and availability 
study on participation by minority, women, and veteran-owned small 
businesses in federally-funded intercity passenger rail transportation 
projects. The study will inform Congress on whether legislation is 
needed to create a DBE program for passenger rail contracting.
    I commend the Chair for holding this hearing today.
    Mr. Payne. The gentleman yields back.
    And so, we will now turn to our witnesses. And we will be 
hearing from testimony from witnesses followed by questions 
from Members. I would now like to welcome our witnesses.
    Mr. Ken Canty, president and CEO of Janus Materials. Mr. 
Melvin Clark, chairman and CEO of G.W. Peoples Contracting 
Company. Ms. Victoria Malaszecki, president and CEO of Envision 
Consultants. Mr. Francisco Otero, president and CEO of the PACO 
Group. Mr. Gnanadesikan Ramanujam, president and CEO of Somat 
Engineering. And last but not least, Ms. Evalynn Williams, 
president of Dikita Enterprises.
    Thank you for joining us today, and I look forward to your 
testimony.
    Without objection, our witnesses' full statements will be 
included in the record.
    Since your written testimony has been made a part of the 
record, the subcommittee requests that you limit your oral 
testimony to 5 minutes.
    Mr. Canty, you may proceed.

   TESTIMONY OF KENNETH B. CANTY, P.E., PRESIDENT AND CHIEF 
EXECUTIVE OFFICER, JANUS MATERIALS; MELVIN E. CLARK, Jr., Esq., 
  OWNER, CHAIRMAN, AND CHIEF EXECUTIVE OFFICER, G.W. PEOPLES 
 CONTRACTING COMPANY, INC.; VICTORIA MALASZECKI, PRESIDENT AND 
CHIEF EXECUTIVE OFFICER, ENVISION CONSULTANTS, LTD.; FRANCISCO 
 OTERO, FOUNDER, PRESIDENT, AND CHIEF EXECUTIVE OFFICER, PACO 
 GROUP, INC.; GNANADESIKAN ``RAM'' RAMANUJAM, P.E., PRESIDENT 
   AND CHIEF EXECUTIVE OFFICER, SOMAT ENGINEERING, INC.; AND 
  EVALYNN A. ``EVE'' WILLIAMS, PRESIDENT AND CHIEF EXECUTIVE 
               OFFICER, DIKITA ENTERPRISES, INC.

    Mr. Canty. Good morning, Mr. Chairman and members of the 
subcommittee.
    Whether it be the actions of Frederick Douglass in 1855, 
Rosa Parks a century later, or John Fitzgerald Johnson today, 
our country has a vigorous tradition of standing up to protest 
and advocate for marginalized peoples.
    This morning we find ourselves at a comparative inflection 
point in the rail and infrastructure industry.
    My name is Kenneth B. Canty. I am the president of Janus 
Materials. Janus, by using a process we have coined, 
``sustainable structural demolition and repurposing,'' deploys 
material from demolished bridges to combat climate change 
through net-zero carbon solutions.
    I am also the president of AMC Civil Corporation and 
Freeland Construction. I have been involved in this business 
and field since 1995 when I was hired as an engineering intern 
from UMass Amherst by Parsons Brinckerhoff to work on the 
design of what became known as the Big Dig.
    From a very young age, my life's dream was to work on 
bridges, as you can see behind me. This moved from being a 
dream to a reality due to the experience I had with my father, 
a World War II Pacific combat veteran, as he we would take me 
with him as a 6-year-old child on long drives from Boston to 
Baltimore to see his ailing mother. We would go over the George 
Washington Bridge down the New Jersey Turnpike to the Delaware 
Memorial Bridges.
    It was these occurrences that inspired me to be a bridge 
engineer. I would beg my dad to take the routes that were out 
of the way, like the Bay Bridge in Annapolis, to check it off 
the list.
    Through working on the Big Dig, I went down to Charleston 
to work on the Cooper River Bridges. And to make a long story 
short, I was able to use these experiences and qualifications 
to purchase my first business.
    Using the SBA's 8(a) program, we grew the company from 4 
people to over 50 in 4 years. We were working for the 
Departments of Defense, Agriculture, and Homeland Security, and 
the GSA, to name a few, for the express purpose of working with 
the railroad.
    As the railroads have a very high barrier for entry, and 
rightfully so, due to the extremely dangerous work it is and 
the impact it has on the traveling public, we made sure we had 
enough past performance work and capital and qualified 
personnel to approach Amtrak.
    We approached Amtrak in 2011, and after 3 years were 
awarded our first contract in 2014 to reconstruct railroad 
stations from Gainesville, Georgia; Prince, West Virginia; and 
throughout South Carolina and North Carolina. We also pursued 
work in North Dakota, Texas, Florida, and Washington, DC, as 
well as Connecticut.
    I must point out to this committee my path was very 
different than others, as I was able to use an established 
program that provides a path for a protected class of citizens, 
the 8(a) program.
    Furthermore, the work I was doing for Amtrak still existed 
in the framework of what we call ``vertical work,'' which is a 
place many minority contractors can succeed.
    However, my end goal remains ``horizontal work,'' which is 
bridges and tunnels and larger assets of infrastructure that 
hardly any Black contractors get into.
    I submit to this subcommittee that there is a concerted, 
coordinated effort of large prime contractors, and sometimes in 
conjunction with owners, to keep minority contractors, 
particularly Black contractors, out of the federally funded 
infrastructure industry, particularly rail.
    While others testifying today have certainly documented 
these actions, I would like to focus on my unfortunate set of 
experiences in the heavy civil industry.
    It is no coincidence there is a dearth of minority 
contractors who are in the rail industry. The majority of these 
minority contractors are usually taken out before they can even 
qualify for work for the railroads and usually under the 
auspices of the State DBE programs.
    I fully realize and accept that prime contractors do not 
want this conversation to be had. I also understand that I am 
likely to suffer an extreme backlash from these prime 
contractors and maybe even owners for coming before this 
committee and subcommittee.
    I accept this risk no matter what the cost. I stand before 
you knowing that this committee is the only body that can enact 
positive change for the minority business community and the 
United States as a whole. Too often these prime contractors are 
not punished for the behavior I will showcase below but are 
rewarded with hundreds of millions of dollars of more work.
    My experiences range throughout South Carolina, but I am 
going to take my remaining time to talk to you about what 
happened in Florida.
    We were contracted to demo a bridge in Florida by a firm 
many of you may be familiar with called Skanska. We started 
experiencing racial discrimination that went from simple acts 
of what might be called tomfoolery to erasing ignition codes 
off machines. That quickly accelerated to sinking of boats, 
sabotage of equipment, which we caught on video and has been 
submitted to this committee, and harassment by a tugboat that 
coincidentally was named after who was purported to be one of 
the high ranking members of the Ku Klux Klan and a Confederate 
war general, Albert Pike. We were demeaned on a regular basis, 
and I myself suffered this behavior.
    Mr. Chairman, I am sure you are aware that Skanska--maybe 
inadvertently--is being rewarded for their behavior by 
receiving a contract from New Jersey Transit for $1.5 billion 
for the construction of the North Portal Bridge. Why would 
anybody think that this behavior that they displayed would go 
away?
    Finally, I would like to just take 30 seconds and tell you 
that the financial implications have been huge. In addition to 
myself, companies in Louisiana, such as TK Towing, Cashman 
Equipment in Massachusetts, International Power Products in 
Maine, companies in Florida, and Urban Advisors in North 
Carolina have suffered greatly through this.
    I am in the midst of losing my house. I cannot provide care 
for my autistic children. And my wife has had to go back to 
work as opposed to raising the children. I have not been able 
to make a payroll. And I am afraid that with the infrastructure 
act that was just passed, I am not going to be able to 
participate at all, despite all of the great, hard-won 
experience I have.
    Thank you for this opportunity, and I sincerely pray that 
it spurs action by this body. Thank you.
    [Mr. Canty's prepared statement follows:]

                                 
   Prepared Statement of Kenneth B. Canty, P.E., President and Chief 
                   Executive Officer, Janus Materials
    Good morning, Mr. Chairman and members of this subcommittee. My 
name is Kenneth B. Canty and I am President of JANUS MATERIALS. JANUS, 
by using a process we have coined ``sustainable structural demolition 
and repurposing'', deploys material to combat climate change through 
net zero carbon solutions. I am also President of AMC CIVIL CORPORATION 
and FREELAND CONSTRUCTION. I have been involved with the Heavy Civil 
Infrastructure Field since 1995, when I was hired as an engineering 
intern by Parsons Brinckerhoff to work on design of what became the 
Central Artery / Third Harbor Tunnel Project, also known as the ``Big 
Dig''. From a very young age, my life dream was to work on bridges. 
This moved from being a dream to a reality due to the experiences I had 
with my father, a World War 2 Veteran, as he would take me with him as 
a 6-year-old child on the long drives from Boston to Baltimore to see 
his then ailing mother. This trip would take us over the George 
Washington Bridge, and over the New Jersey Turnpike to the Delaware 
Memorial Bridges. It was these occurrences that inspired me to be a 
bridge engineer as I would beg my dad to take routes that were out of 
the way like the Bay Bridge in Annapolis, in order for me to check off 
my list long span bridges that I hadn't crossed yet.
    I received a Civil Engineering Degree from the University of 
Massachusetts/Amherst in 1997 and was hired by a large General 
Contractor, Modern Continental Construction, in 1998 and continued to 
work on what would become the largest infrastructure project of the 
20th century. From here I went on to Charleston, SC to assist in the 
construction of the United States' largest cable stayed bridge over the 
Cooper River in Charleston, SC, and then was hired on by the same team 
I worked for in Boston to dismantle the old existing truss bridges that 
crossed the same river.
    I was able to use these unique sets of experiences and 
qualifications to purchase my first business, Freeland Construction. In 
short order, using the opening that the Small Business Administration's 
8(a) Program provided, I was able to grow the company from 5 employees 
to over 50 employees in 4 years. We developed an acute vision and goal 
to utilize these Federal Contracts for facets of the Department of 
Defense, Agriculture, Homeland Security, and General Services 
Administration, to name a few, to gain experience so that we could 
qualify for work with the Railroads. As the railroads have very high 
barriers of entry, and rightfully so, due to the extremely dangerous 
work it is and the impact it has on the traveling public, we made sure 
we had more than enough past performance, working capital, and 
qualified personnel, to approach the National Railroad Passenger 
Corporation, also know as AMTRAK. We approached Amtrak in October of 
2011 and were awarded our first contract in 2014 to reconstruct 
railroad stations in Gainesville, GA; Staunton, VA, Prince, WV; Camden, 
SC; and Charlotte, NC. Our success with Amtrak allowed us to travel the 
country pursuing work in North Dakota, Texas, Florida, Connecticut, and 
Washington, DC.
    I must point out to the committee that my path was very different 
than others as I was able to use an established program that provides a 
path for a protected class of citizens. Furthermore, the work I was 
doing for Amtrak still existed in the framework of what we in the 
industry refer to as ``vertical work'', which is a place where many 
black contractors can succeed. However, my end goal remains 
``horizontal work'' which consists of bridges, tunnels and other larger 
assets of infrastructure that hardly any black contractors can get 
into. These projects, while inherently more risky, provide much higher 
margins, less competition, and more market stability with Heavy 
Infrastructure being more adequately funded by Congress.
    I submit to this subcommittee, that there is a concerted, 
coordinated effort by Large Prime Contractors, and sometimes in 
conjunction with Owners, to keep Minority Contractors, particularly 
Black Contractors, out of the Federally Funded infrastructure industry. 
While others testifying today have certainly documented these actions, 
I would like to focus on my unfortunate experiences as a Heavy Civil 
Contractor and examples of discrimination whose ultimate purpose is to 
keep us out of the infrastructure industry. It is no coincidence that 
there is a dearth of Minority Contractors who are players in the Rail 
Industry. The majority of these minority contractors are taken out 
before they can even qualify to work for the Railroads, and usually 
under the auspices of the USDOT DBE program that States and 
Commonwealths are responsible for overseeing and enacting. There are 
challenges with the current DBE program's implementation--and I will 
outline below my experience with a firm that touts its ability to 
include DBE's--but the barrier of entry without the DBE program is too 
great.
    I fully realize, and accept, that certain Prime Contractors do not 
want this conversation to be had. I also understand that I am likely to 
suffer an extreme backlash from these Large Primes Contractors and 
maybe even Owners for coming before this Committee and Subcommittee. I 
accept this risk no matter what the cost. I stand before you knowing 
that this committee is the only body that can enact positive change for 
not only the Minority Business Community, but also for the United 
States as a whole. With the infrastructure issues in our country being 
past critical, it is going to take not just Large Businesses, but also 
small and minority businesses, to work together to enact these 
solutions that Congress and this Administration is funding through the 
historic Infrastructure Investment and Jobs Act Bill. The biggest issue 
from my viewpoint is not just passing the bill, but ensuring that there 
are enough companies to actually do the work. To this end, small and 
minority businesses are critical to achieve the needed work force.
    Too often, not only are Prime Contractors not punished for the 
behavior I will showcase below, but they are rewarded with hundreds of 
Millions of dollars in more work with absolutely no regard for the 
Black Owned firms, and lives, that they have destroyed. I have 
experienced this behavior on no less than three separate contracts, 
ranging from working for the US Army Corps of Engineers Charleston 
District (Fort Jackson, SC), to PCL / South Carolina Department of 
Transportation (Pee Dee River Bridge, Georgetown, SC), to most recently 
Skanska USA and Florida Department of Transportation for the 3 Mile 
Bridge in Pensacola, Florida. Due to time constraints, I will present 
the treatment I had at the hands of Skanska, as I believe they are one 
of the worst offenders in the business. Skanska is also one of the 
largest recipients of FRA funded work in the USA, and would 
correspondingly be one of the largest contractors to participate in a 
future Federal Railroad Disadvantaged Business Enterprise Program. In 
order to understand what very well would happen with this new potential 
program, one reasonably must look at past actions. Without 
accountability and corrective action, these bad actors will never 
change their behavior.
Skanska--3 Mile Bridge Construction Discriminatory Actions Against AMC 
                      CIVIL, Vendors and Suppliers
    I am an African American and the principal owner and operator of 
AMC Corp, a small and disadvantaged business that employs predominantly 
minority employees conducting demolition on civil projects. My firm was 
subcontracted to Skanska USA Civil Southeast, Inc. on an FDOT-owned, 
FHWA-assisted project in Pensacola, Florida. Though I previously worked 
for other divisions of Skanska, this was my first subcontract with 
Skanska Southeast and in Florida. Beginning in early 2020, I began to 
suspect that I was being subjected to racial discrimination by Skanska. 
First, I was not provided with sufficient information to appropriately 
bid the work. As an African American engineer and owner of a business, 
I was ignored and disrespected by Skanska Management when I raised 
legitimate questions about site conditions affecting some of the work 
we were to perform and in meetings. Instead of addressing the concerns 
I raised, Skanska failed to timely submit the matter to FDOT and 
insisted that AMC expend far more time and financial resources than 
allocated in the contract for certain portions of work; refused to pay 
for the work completed; delayed, interfered with, refused to allow us 
to perform the more profitable work in our contract; and Skanska 
personnel vandalized AMC's equipment, rendering it inoperable, all of 
which destroyed AMC's planned cashflow under the contract. Skanska then 
claimed AMC was in default on the contract for the delays and financial 
condition that it had caused. I made a complaint of race discrimination 
to FDOT regarding this behavior by Skanska, but FDOT took no action to 
remedy Skanska's discrimination. After my complaint, Skanska refused to 
pursue AMC's claim regarding the site conditions and gave AMC a notice 
of default. The discrimination and retaliation by Skanska and FDOT 
culminated in and caused the termination of AMC's subcontract on or 
about April 27, 2020. Skanska requested FDOT's approval of the 
termination and FDOT failed to take any action to stop the termination.
    I believe that my treatment on this project is the result of my 
race, black, and that my subsequent termination was due to both my race 
and in retaliation for having voiced complaints about Skanska. We were 
the only African American firm on site during the execution of our 
contract. As this is a federally-assisted project, these constitute 
violations by both Skanska and FDOT of Title VI of the Civil Rights Act 
of 1964.
Examples of Intimidation and Discrimination
    1)  After mobilization on November 19, 2019 our rented skid steer 
ignition code was erased out of the cab of the equipment. One of our 
tool boxes was locked without our knowledge and we had to drill the 
lock out of the toolbox. We originally thought these were pranks as we 
were the new guys on site.
    2)  Sinking of Crew Boat--We left site on 2/6/2020 due to bad 
weather. Our crew boat was brought in, and tied off per the report in 
Exhibit A.\\ As there was forecasted to be bad weather that night, we 
secured the vessel properly. When we came in the next morning, we found 
our crew boat sunk. After further investigation it was discovered that 
an Underwater Mechanix vessel (contract divers to Skanska) had been 
tied to our boat in such a way that would cause our boat to sink. 
Please see Exhibit A for Photographs and Report.
---------------------------------------------------------------------------
    \-\ Editor's note: Exhibits A-D referenced in Mr. Canty's prepared 
statement are retained in committee files.
---------------------------------------------------------------------------
    3)  Sabotage of our LaBounty UP-70 Muncher on March 17, 2020. 
Please see Exhibit B. We believe this was done in order to slow down 
our progress. As the video shows, the alleged suspect was already on 
the site and based on his familiarity of the site, appears to be a 
Skanska employee.
    4)  The Albert Pike Tugboat Interrupting our Work Flow--Please See 
Exhibit C. While we were working in the channel, every time a vessel 
would come by we would have to take our divers out of the water. There 
were more than a few instances that the Albert Pike would transit by 
with no cargo in tow, back and forth from one side of the bridge to 
another, so the only purpose of the movement appeared to be to 
interfere with our work and slow us down in completing the work. The 
name of this Tug Boat (named for a Confederate general reputed to be a 
high-ranking member of the Ku Klux Klan) was painted over after we left 
in order to hide its identity during the most recent racial civil 
unrest.
    5)  Animosity by senior Skanska Staff towards myself and other 
employees. Please See Exhibit D. Several times I was demeaned and 
treated with hostility that I felt was based on my race by Senior 
Skanska Staff. Numerous witnesses can attest to that behavior.
    6)  Retaliation due to Reporting the above Incidents to FDOT--After 
we experienced the allegations as described above, Skanska on or about 
March 30, 2020, took action to not use our participation for DBE Credit 
in order to justify terminating our contract. Please see correspondence 
between Skanska and FDOT. We have also included police reports from our 
Connex being broken into after we were terminated as well as all 
correspondence detailing why we believe that Skanska was operating in 
this way. See Exhibit D.

    Mr. Chairman, I am sure you are aware that Skanska, while maybe 
inadvertently, is being rewarded for their behavior by receiving an 
award from New Jersey Transit, for 1.5 Billion Dollars for the 
construction of the North Portal Bridge. Why would anyone think that 
the behavior they have displayed on other work involving Disadvantaged 
Contractors would not rear its ugly head on this extremely important 
piece of infrastructure?
    I also would finally like to point out that the cost of these 
discriminatory actions are not only harmful to my firm, they have also 
been devastating to Majority Owned Firms as well. These firms not only 
include TK Towing (Morgan City, LA), but Also Cashman Equipment 
(Braintree, MA), International Power Products (Acton, ME), Cowin 
Equipment (Pensacola, Florida), Urban Advisers (Charlotte, NC) and a 
host of other small businesses throughout the Mid Atlantic Region and 
Gulf Coast. Because of the discriminatory behavior that my firm 
experienced, these firms who worked for AMC Civil on this project 
suffered greatly as well.
    Lastly, the financial toll to myself because of this behavior has 
been beyond devastating. I am fighting to not lose my residence, am 
struggling with providing care for my two children who are on the 
Autism Spectrum, and in the midst of a pandemic my wife has had to go 
back to work being a grocer versus raise our children in order to keep 
food on the table. I have lost the majority of my employees, and have 
not been able to make a payroll in sometime. Additionally, the ability 
to procure work with the passage of the infrastructure bill is greatly 
at risk because of not being able to be on a firm personal and 
professional financial footing.
    Thank you.

    Mr. Payne. Thank you, sir, for that compelling testimony.
    Next, we will hear from Mr. Melvin Clark.
    Mr. Clark. Good morning. I am the chairman, CEO, and owner 
of G.W. Peoples Contracting Company. We are the only African-
American-owned rail contractor in the United States, 
specializing in heavy rail construction, maintenance, repair, 
rehabilitation, and track demolition, and we work all over the 
country.
    I want to thank the chairman, Mr. Payne, for having this 
hearing. I have been working and advocating for a minority 
business program at FRA for over 30 years. I have been in this 
industry close to 40 years.
    So, following the passage of the Reagan administration's 
Surface Transportation Act, I started a company called 
Metroplex. Metroplex was the first minority-owned railroad 
contractor in the United States, and we grew to be a nationally 
known and respected leader in this field.
    From the time that we started the company, I was a very 
strong minority business advocate. We did a number of things 
with SBA and DOT.
    However, our most significant success was starting the 
mentor-protege program at SBA. It was implemented during the 
Clinton administration. And Metroplex mentored my current 
company now, G.W. Peoples.
    I ended up selling Metroplex and coming back to G.W. 
Peoples in 2011, and we acquired full control there. It was a 
successful turnaround. We do over $22 million in annual sales. 
We have been the rail contractor for the Chicago Transit 
Authority, for example. We did the rehabilitation of the Dan 
Ryan Red Line. That was a very large project, $425 million to 
upgrade over 10 miles of the CTA system.
    The transit people and companies there at that time did not 
want any kind of minority company to come in and get any of the 
work. However, we went through the chairman of CTA and others, 
who granted us this opportunity, and we completed that job with 
over 70 percent minorities and women. It was one of which 
everyone was so very proud of, and we had established a place 
in Chicago.
    Despite the public support for our transit workforce, and 
the track work reflected the neighborhoods and the ridership of 
color, we were not successful in the heavy passenger rail 
market.
    The private railroads usually reserve the high-profile, 
high-profit, and labor-intensive work for themselves.
    For example, in Chicago, there was a project called the 
Englewood Flyover. It was a $93 million system with bridges to 
carry the Rock Island rail line over the Norfolk Southern/
Amtrak line, and it went through the heart of the South Side of 
Chicago.
    When the local public found out the size of the project, 
$93 million, when they found out also that the African-American 
firms only received $112,000, we argued and advocated that they 
should have somebody of color there. We were more than 
qualified to do the work. But they said they had no obligation 
to meet any kind of minority participation goals, and they paid 
no more than lip service to minority businesses in the 
community.
    It ended up really being a mess. One of the congressional 
supporters that we have now in Chicago, Bobby Rush, was able to 
help make a change there in their policies. However, there 
really is still nothing happening for us.
    So, anyway, as I said, I have been a minority business 
advocate for the time period I have been in business. I have 
served on all of the national organizations with regard to 
trade organizations with regard to rail.
    For example, at one of the organizations I was on the 
legislative committee, and one of the goals of the committee 
was to lobby to eliminate the DBE programs altogether at DOT 
and at the Defense Department.
    Mr. Payne. Excuse me, Mr. Clark. Could you wrap up? Your 
time has expired. So just give us a quick summation.
    Mr. Clark. Well, I am going to give you a quick summation 
of what I was going to say.
    There were two major high-speed rail projects that you may 
know about in Florida and in Las Vegas. Both were going to use 
G.W. Peoples to do the track work until they found out they did 
not have any kind of minority participation goals. Thus, and 
therefore, we were shut out of this. And I can't think of a 
better example of discrimination and the need for a policy here 
for minority business than that.
    [Mr. Clark's prepared statement follows:]

                                 
Prepared Statement of Melvin E. Clark, Jr., Esq., Owner, Chairman, and 
    Chief Executive Officer, G.W. Peoples Contracting Company, Inc.
    My name is Melvin E. Clark, Jr. I am the Owner, Chairman and Chief 
Executive Officer of G. W. Peoples Contracting Co., Inc. (GWP). We are 
the only national contracting company that specializes in heavy rail 
construction, maintenance, repair, rehabilitation, and track 
demolition. I am also a long-time, active member of COMTO, the 
Conference of Minority Transportation Officials; however, the views I 
express in this testimony are my own and should not be construed as 
representing any official position of COMTO.
    I want to thank Chairman Donald Payne, Jr. Chair of the 
Transportation and Infrastructure Subcommittee on Railroads, Pipelines 
and Hazardous Materials, Ranking Member Rick Crawford, and the other 
Members of the Subcommittee for the opportunity to discuss key concerns 
and experiences of minority-owned--and more specifically, Black-owned--
businesses seeking to opportunities funded by programs funneled through 
the Federal Railroad Administration. I believe this to be a historic 
event and that it sets significant precedent since this is the first 
hearing of its kind dedicated to identifying the pervasive racial 
discrimination in FRA-funded infrastructure contracting and minority 
business participation.
    Before I begin, I do want to recognize the efforts of Deputy 
Administrator Amit Bose who, since his appointment, has been very 
aggressive in facilitating meetings between the private sector and 
quasi-public railroad trade associations and representatives of 
minority businesses groups. I understand these have been productive and 
hopefully will lead to further conversations and teaming opportunities. 
Also, the FRA has successfully negotiated state agency agreements that 
provide opportunities for small and minority businesses. However, I 
understand that, unfortunately, those agreements are facing backlash 
from groups who oppose the negotiated goals, most notably in 
California.
    As you may know, I have been in the heavy rail industry for going 
on forty years. I first began my legal career with a prominent 
Pittsburgh law firm, as a corporate and labor attorney, prior to 
joining the Tax Division of the U.S. Department of Justice. Following 
the passenger of the Reagan Administration's Surface Transportation 
Act, in 1983, with my father's support, I founded Metroplex 
Corporation, the nation's first minority-owned railroad construction 
company which I grew into a nationally-known and widely-respected 
leader in its field. The company won multi-million dollar contracts for 
prestigious transit projects across the country, including the Alameda 
LRT Corridor in Los Angeles ($65 million), the Bay Area Rapid Transit 
Project in San Francisco ($35 million) and the New Jersey Transit 
Project in Camden ($50 million). During this time, Metroplex signed the 
first SBA-sanctioned mentor-protege agreement with the fledging 
company, G. W. Peoples Contracting.
    In 2011, I was able to acquire full control of G. W. Peoples. GWP 
can now boast a successful turnaround, producing over $22 million in 
annual sales. GWP was the DBE rail contractor for the Chicago Transit 
Authority's (CTA) rehabilitation of the Dan Ryan Red Line, a $425 
million project to upgrade 10.2 miles of the CTA system where GWP was 
able to ensure that over 70% of its workforce on the project was 
minority (men and women). (We hire from the chronically unemployed: 
people who look like us.) GWP also built the Atlanta Downtown Streetcar 
Line and the downtown rail line through the Central Business District 
of Dallas. Importantly, I must point out that these were all Federal 
Transit Administration (FTA) funded projects.
    Therefore, I do want to begin by being perfectly and adamantly 
clear about my position: the Federal Railroad Administration, the only 
major USDOT agency exempted, must implement a program to set goals for 
participation of disadvantaged business enterprises, i.e., a robust, 
efficient, and effective DBE program.
    Again, while we do appreciate that the FRA is facilitating face-to-
face discussions in order to give the pseudo-private railroads and 
large contractors a chance to engage with DBE and MBEs, I understand 
that the agenda for the majority-owned firms is to try to avoid goals 
on contracts or projects funded through FRA. However, good faith and 
cordial chats have not been enough in the past and they will no longer 
fly for companies like mine and individuals like myself who have 
faced--and faced down--overt racial discrimination throughout my 
railroad career. To put it bluntly, if they don't have to, they won't.
    The role of the Federal Railroad Administration is to focus is on 
maintaining current rail services and infrastructure (maintenance and 
repair), strategically expanding, and improving the rail network (new 
construction and upgrades) to accommodate growing travel and freight 
demand and providing leadership in national and regional system 
planning and development (transit-oriented development and workforce 
skills training).
    I believe it is important to define what I mean when I refer to FRA 
funded projects. I have learned that the Federal Railroad 
Administration itself has been working aggressively to be inclusive of 
small, minority and women owned business within its own agency, 
including through Buy America rules, administrative and general 
management consulting, supplies and services, and information 
technology equipment, services, and software.
    But the FRA's authority and responsibility, as noted above in the 
above paragraph, go beyond its own agency to the entire nation and all 
public funds dispersed through its budget. The agency needs to be 
cognizant of the systemic discriminatory practices and the racial and 
cultural implications attached to these funds.
    I am referring to high-profile, labor-intensive projects, including 
building and construction. According to a 2016 report published by the 
Minority Business Development Agency (MBDA), a federal agency 
established during the Nixon Administration and requiring annual 
reauthorization, minority business owners have historically been 
systemically excluded from securing often lucrative federal contracts 
for infrastructure work (emphasis added), such as building bridges and 
highways. I would add railroads to that list, and I must point out that 
it's particularly telling that, having reviewed the MBDA website and 
its publications, rail infrastructure is so glaringly absent from MBDA 
studies on minority business.
    I believe the reason may be that it has been an extraordinarily 
unwelcome space for minority-owned businesses and that racial 
inequities were so institutionalized that even the only federal agency 
whose mission is solely dedicated to the growth and competitiveness of 
minority business enterprises, seemed resigned to the inherent 
procurement disparities in the railroad construction industry.
    However, we believe that the FRA procurement minority disparity 
study, mandated by the FAST Act and currently close to conclusion, will 
result in the predictable conclusion: to reiterate, racial 
discrimination is real and minority business owners have historically 
and systematically been excluded from securing lucrative federal 
contracts for rail infrastructure work.
    I have spent decades meeting with and proselytizing to half a dozen 
Administrations, continually making the argument that USDOT needed to 
address the contracting playing field at FRA, skewed towards large and 
majority-owned firms, by implementing DBE goals for FRA funds. Although 
many beneficiaries of FRA's programs will argue that they are private 
entities and that DBE goals should not apply, we believe this to be 
disingenuous rationalization. Federal rail grants, guaranteed credit 
and loan programs, highway-rail crossing safety projects, mean that 
hundreds of millions of dollars are funneled into state and local rail 
agency coffers. FRA does not pull this money out of the air: these 
funds come from minority taxpayers and fees from minority 
transportation users. In fact, according to data from the National 
Minority Suppliers Development Council (NMSDC), minority-owned 
businesses contribute close to $49 billion in local, state, and federal 
tax revenues. It is only fair that recipients of those tax dollars 
should be accountable to the minority business community.
    GWP has been--literally and figuratively--both breaking ground and 
laying the groundwork for future minority entrepreneurs to pursue 
transportation construction as a start-up option. But the opportunities 
have not been built and they have not come.
    I point out again that GWP continues to be the only Black company 
in this particular construction niche, and we have found the position a 
hard row to hoe. It is an absurd set of circumstances considering the 
fact that the DBE program is nearly 40 years old, established during 
the Reagan Administration by the Surface Transportation Act of 1983, 
for transit and highways. Despite the revolutionary shifts in social, 
cultural, racial, and ethnic demographics in the U.S. between now and 
the last millennium, minority business has made so little progress 
making inroads into the railroad contracting arena. This is in the face 
of the impressive strides made in DBE participation percentages in the 
transit and highway sectors--both of which have implemented robust DBE 
programs. I believe this can only be attributed to the racial bias in 
infused in the procurement processes.
    As I stated, I have been in the rail construction industry for four 
decades. Over that period. I have been an active member in the National 
Railroad Construction and Maintenance Association, Inc. (NRC) and the 
Association of General Contractors (AGC), the latter of which we were 
members of the Diversity and Inclusion Task Force. We have attended 
networking events for the Railway Engineering-Maintenance Suppliers 
Association, Inc. (REMSA), the American Short Line and Regional 
Railroad Association (ASLRRA) and the National Railroad Passenger 
Corporation (AMTRAK). We have been part of many conversations with the 
Association of American Railroads (AAR); yet the only diversity in 
their vocabulary on the AAR website relates to diversification of 
services in the context of profit.
    Most railroad and contracting trade organizations basically exist 
to protect the interests of majority-owned firms. Each has stated for 
the public record that they strongly oppose goals for FRA funds. This 
is particularly ironic since they all insist that they do not receive 
any public funds. If that were truly the case and they do not receive 
FRA money, why would it impact them if there was an FRA DBE program? At 
most, they should be indifferent.
    At one of the organizations, I served on its legislative committee. 
One of the goals of that committee was to lobby for eliminating the DBE 
program altogether at USDOT. Thankfully, I was present during a 
strategy meeting, and I was aggressive enough to successfully thwart an 
overt effort to try to terminate the program. However, the 
organization's official position continues to be opposition to--if not 
termination of--minority business participation goals.
    Forty years of effort and struggle against the monolithic, i.e., 
large, powerful, and intractable ``private'' railroads, for barely a 
mere sliver of the massive contracting pie: this has been my 
experience.
    According to sources, Chicago is North America's largest rail hub, 
and remains unsurpassed in the total number of passenger and freight 
trains that converge on any city on the continent. Chicago is also a 
major hub for Amtrak, with dozens of different lines terminating at the 
city's Union Station. The city has the second largest Black population 
in the country. One would think this location would be ripe for heavy 
rail construction opportunities. Indeed, GWP established an office in 
the city, and achieved significant success working with the Chicago 
Transit Authority (CTA), the city's light rail system, where we 
received kudos for our work and our employment recruitment efforts. 
However, the heavy rail passenger side offered a completely different 
scenario.
    While I credit the Chicago Region Environmental and Transportation 
Efficiency (CREATE) agency and its member heavy railroads who have 
worked hard and been successful in meeting and exceeding its D/MBE 
goals in Chicago, there have been few to no opportunities in passenger 
railroad track construction.
    Despite public support for GWP in Chicago where our transit 
workforce on trackwork reflected the neighborhoods and the ridership of 
color, GWP has not been successful in the heavy passenger rail market. 
The private railroads reserve the high-profile, higher-profit and 
labor-intense work for themselves. While I do not intend to disparage 
micro-businesses, trucking firms, materials suppliers, IT services, 
consulting or even Caucasian-women owned (WBE) businesses, meeting 
goals in this manner may not produce the job creation nor the necessary 
fuel for economic growth for underserved communities intended by the 
program's crafters.
    To be more specific, in Chicago, a project called the Englewood 
Flyover, a $93 million system of bridges to carry the METRA Rock Island 
rail line over the Norfolk Southern/Amtrak line, went through the heart 
of the South Side of Chicago. Local protests over the clear racial 
discrimination were held when the public learned that African-American-
owned firms received $112,000 while white-owned firms received $90.5 
million, the difference made up of Hispanic and Asian-owned firms. 
Ultimately, I understand the amount awarded to minority firms was $4 
million, including Black, Hispanic, and Asian, a mere pittance; 
however, none went to minority track construction contractors. That $93 
million was FRA funds, and although GWP worked hard to get CREATE, 
Norfolk Southern and Amtrak to see the racial inequity in this 
scenario, since NS and Amtrak had no obligation to meet a minority-
participation goal, they paid little more than lip-service to minority 
businesses and to the minority community. This is not just bad business 
practices; it translates into outright racially discriminatory 
practices.
    Some, but not all, ``private'' rail construction contracts are bid 
publicly and over the years, we have worked to stay on top of the 
pipeline of projects: we have tried to follow the money and to stay 
ahead of the game on rail construction jobs. As is typical in the 
industry, we have attended pre-bids and site visits in advance of 
submitting proposals. However, we found ourselves in that very 
unwelcoming space: once GWP identified itself as a DBE/MBE, we were 
advised in no uncertain terms to leave and that if we ever mentioned 
the phrase (DBE/MBE) again, our representatives would be escorted out.
    As GWP became known in the industry and our national reputation 
grew, we were viewed as competitors, not partners, and shunned for this 
reason, which simply added insult to injury. GWP was left off 
solicitation lists even when we were registered, pre-qualified vendors. 
On the few occasions when we have been able to submit a bid, the only 
feedback we receive is who the successful bidder is. We are unable to 
find out where we placed in the bid results in order to conduct post-
mortem benchmarking. We would learn later, usually through our 
Caucasian employees with long careers in the industry and access to 
this information through the ``old boys'' network, what the true bid 
results were. Put simply, lowest bidder, best value and diversity/
inclusion components are not always priority factors in making awards.
    Again, mind you, this was in the heavy rail sector. Although we 
managed to perform small, heavy rail industrial jobs because of 
contacts our employees had nurtured throughout their careers, GWP found 
success and truly established its reputation in the transit, light-rail 
industry (FTA) where opportunities (DBE goals) were made available and 
where we could compete more equitably on the playing field.
    As background, GWP was founded and incorporated in Western 
Pennsylvania and owned for forty years by individuals of Caucasian 
descent. It had established a strong reputation in that region until 
its owner passed away. At that point, GWP came under African-American 
ownership, continuing the firm's mission as a track construction 
contractor, and became an 8(a) and certified DBE two years later. The 
industry is a small community and Mr. George Peoples and later Dr. John 
Verna, the two previous owners, were readily recognized and warmly 
welcomed by their peers. However, that all reversed after the change in 
ownership. When GWP's Black owner began showing up at pre-bid meetings 
and site visits, the entire dynamics in the meeting room changed to 
palpable tension and it was as if a heavy curtain had fallen: GWP was 
blacked-out and blacklisted, so to speak. Indeed, it almost WAS 
``curtains'' for GWP until we became certified 8(a) when we were able 
to find work as a prime contractor, including on federally-funded 
Defense Department and Corps of Engineers projects, set aside for 8(a) 
firms. Although majority firms continued to respond to the term 
``minority-owned'' as though there was a bad smell, they held their 
noses and did attempt to team with us on these lucrative jobs: finally, 
they needed us. That program leveled the playing field, at least during 
our nine-year tenure as an 8(a).
    Over the past decade, there have been several high-speed passenger 
rail projects in the works, including Brightline (Miami to Orlando, 
FL), and Brightline West (formerly known as Xpress West, Las Vegas to 
Victorville, CA). At one point, the two projects were candidates for 
federal rail grants and loans, and USDOT, as a condition of those 
funds, insisted on DBE/MBE participation. In fact, the owner of Xpress 
West approached me to assist in developing a minority-business program. 
GWP was actively courted as a subcontractor on both these multi-billion 
dollar projects. That was until a change in Administrations led to a 
removal of that condition. Once the owners of these project learned 
that goals would no longer be applied, i.e., once those goals went 
away, GWP was sent away. We had devoted an extraordinary amount of time 
and effort into putting our proposals together, but afterward, we were 
simply and unceremoniously ghosted: no one responded to our proposals, 
and no one returned our calls.
    In closing, I do want to again say, unequivocally, minority 
business owners have historically and systematically been discriminated 
against by being excluded from opportunities to secure lucrative 
federal contracts for rail infrastructure work. I know you have heard 
this before, but a DBE program in the Federal Railroad Administration 
would mean millions of dollars for the minority business community and 
thousands of jobs for the minority community.
    As Congress grows close to passing a comprehensive infrastructure 
bill, we have the opportunity at this point in history to right an 
egregious long-term wrong. We look forward to the Subcommittee and the 
FRA doing the right thing.
    As Chairman/CEO of G. W. Peoples, I thank you for your hard work on 
this important issue. I appreciate your time and attention, and for 
providing me and other minority business owners the opportunity to 
share our experiences of discrimination in federal passenger rail 
contracting. I will make myself available for any follow up questions 
or additional information, as requested.

    Mr. Payne. Thank you.
    Now we will move on to Ms. Malaszecki.
    Ms. Malaszecki. Good morning, Mr. Chairman and members of 
the subcommittee. My name is Victoria Malaszecki, and I am the 
president and CEO of Envision Consultants.
    My company is certified as a small woman-owned 
disadvantaged business enterprise in my home State of New 
Jersey and nine other States. We are headquartered in Mullica 
Hill, New Jersey, and have an office in Philadelphia, 
Pennsylvania. We are now approaching 27 years in business, with 
47 employees, and anticipate closing the year at $7.3 million 
in revenue.
    We work in the architectural, engineering, and construction 
industry, providing program and construction management 
services. Our market sectors include aviation, bridges, general 
buildings, educational K through 12, higher education, highway, 
transit, water/wastewater, and technology.
    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 have 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. Every day I must prove myself to owners, 
clients, and most disheartening, a few employees who have come 
and gone.
    I was almost put out of business by a large prime and moved 
the operations into my home to meet payroll and cut costs. To 
this day, I don't know how I survived that year, but I did. I 
could have thrown in the towel were it not for my family 
supporting me.
    I would not be here today if it were not for statutory 
requirements for women-owned businesses. Business is business, 
and the certifications do not guarantee work, but they level 
the playing field, allowing me to be in the game.
    The discrimination that continues daily is so subtle that 
it is overlooked. The anger, hostility, and hate from men when 
confronted by me is, I believe, grounded in disrespect. Yet, 
this behavior is not all men.
    What is concerning to me today is recognizing this 
hostility and disrespect to women on my management team and the 
young women entering the workforce. I must incorporate annual 
training in this area of discrimination that is not sexual. I 
would never have thought in 2021 that this is what is needed 
for workplace culture.
    The industry continues to be male dominated at all levels. 
I must be well versed in all aspects of business operations 
when many of the men I am working with only need to be 
knowledgeable in one aspect.
    A few of the daily experiences I encounter after all of 
these years are: What is your education? What is your 
background? What can you do for me? You are not allowed to 
speak to any division of the agency or owner. You are not 
allowed to attend the preproposal meetings.
    Ninety-nine percent of the time I do not receive a copy of 
the submitted proposal. I hear that, ``We negotiated your rates 
and fee. We request you to start work without an executed 
contract.'' And too many times the dollar values assigned to my 
firm in winning a proposal never result in any revenue.
    In conclusion, my story reflected in the written testimony 
identifies that discrimination against women exists in this 
industry, and that there is a need for establishing goals in 
Federal passenger rail contracting.
    Envision has only pursued two procurements in Federal 
passenger rail in 27 years of doing business. If this arena 
opens to include small woman- and minority-owned businesses, 
like other agencies of the Government, such as the Federal 
Transit Administration and the Federal Highway Administration, 
I would pursue additional contracts.
    If there is no incentive to utilize firms like mine, they 
will not be utilized. The large private national and global 
firms will continue to strengthen and dominate this market via 
mergers and acquisitions, performing 100 percent of the work on 
their own.
    With only a few large players winning and performing the 
work, more and more conflicts of interest will arise. This is 
an opportunity only if the agency is ready to procure with a 
small woman- or minority-owned firm.
    Thank you.
    [Ms. Malaszecki's prepared statement follows:]

                                 
    Prepared Statement of Victoria Malaszecki, President and Chief 
             Executive Officer, Envision Consultants, Ltd.
    My name is Victoria Malaszecki, and I am the President & CEO of 
Envision Consultants, Ltd. My company is certified as a small woman-
owned disadvantaged business enterprise (DBE) in my home state of New 
Jersey and nine other states. We are headquartered in Mullica Hill, New 
Jersey and have an office in Philadelphia, Pennsylvania. On December 4, 
1994, Envision was incorporated and is now approaching 27 years in 
business with forty-seven employees and anticipate closing the year at 
$7.3 M in revenue. We work in the Architectural, Engineering and 
Construction (AEC) Industry providing Program and Construction 
Management services specializing in Project Controls, Public Outreach 
and Technology Services. Our market sectors include Aviation, Bridges, 
General Buildings, Educational K-12, Higher Education, Highway, Rail, 
Transit, Water/Wastewater and Technology. I am honored to be here today 
to share my story as it relates to ``Identifying Discrimination in 
Federal Passenger Rail Contracting''.
    As a young girl my mother told me I could be anything I wanted to 
be when I grew up. She was my world, my best friend, my mentor, my 
inspiration. My world was rocked when she died--I was 15 years old. The 
youngest of five children and the mistake coming 10 years later after 
the youngest of their four children. My father did not understand me, I 
always asked too many questions. I was always debating both him and my 
brother. During high school there was no girls' soccer team and my 
father would not allow me to play on the boys' team. He turned to 
alcohol after she died and did not know what to do with a teenage girl. 
He told me not to go to college as ``You will just grow up and get 
married and have children like your sister.'' My father died one week 
after my high school graduation. At his funeral friends and family told 
me his was proud of me going to college. I was the first one in my 
family to attend college and obtain degree(s).
    In preparing for today I realized that I have become desensitized 
to the systemic discrimination that happens daily to me based on my 
gender. I thought that because I have worked hard, started from 
nothing, raised a family and am running a successful business that I am 
respected. That was the message to young girls in the 1980's: you can 
have it all--marriage, motherhood and a career. But I am wrong. It is 
2021 and I thought I was respected and equal to a man, but the cold 
hard reality is that I am not. I have to prove myself everyday to 
owners, clients and most disheartening a few employees who have come 
and gone. ``Disadvantaged'' is not the best term since I put myself 
through college, with no healthcare, no parents, $25,000 dollars to my 
name and a mortgage to pay on my parents' home after they died. I made 
it. Not really. I am constantly proving myself. So many times, when in 
a conversation with a few people and introductions are made I am asked 
what my background is, my education but a man is not.
    Additionally, I have come a long way from the beginning to the 
firm's present success. Almost put out of business by a large prime 
(outstanding invoices for over one year) and moved the operations in my 
home to meet payroll and cut costs. To this day I don't know how I 
survived that year, but I did. I could have thrown in the towel were it 
not for my family supporting me.
    Similarly, there is the analogy in the medical profession that the 
doctor needs to role play and be the patient for empathy and 
understanding. I would suggest that the same role playing should be 
incorporated into the orientation for all employees in the AEC 
industry. Empathy and understanding at all levels that the women and 
minority firms being utilized on projects are real and are responsible 
for the livelihoods of their employees (payroll, medical benefits, 
PTO). ``Just because you have to use them'' doesn't mean that the 
business is not as real as yours.
    For instance, a project manager for a Prime (firm who has the 
contractual relationship with the owner) should understand that the 
invoice sitting in his bin should be processed efficiently, the 
accounting department should understand why they are calling for 
payment. Since I am not allowed to call the Owner (at times that 
language is written in the contract) we are making collection calls to 
the Prime. Recently, I contacted the Owner since my CFO, also a woman, 
was getting nowhere with the collection calls. I was sent a high 
priority email from the male VP citing the contract terms. In a follow 
up conversation with the male VP, I highlighted that there was no such 
clause in his contract and that I simply inquired if payment was made 
since we were out 8 months. In the end and two months after my inquiry 
both firms were in fact paid for the outstanding invoices. This email 
was sent to my team and his team putting my firm in its place. You see 
I am not supposed to be a Prime. I am to stay in my lane as a 
subcontractor. As he was about to renew his contract for the fourth and 
final year, I suggested that the remaining budget in my contract be 
utilized for his other subcontractor and Envision will no longer be his 
subcontractor.
    Most importantly, I have encountered countless lessons and 
obstacles that required me to have the patience, strength, and 
persistence to learn and grow. I would not be here today if it was not 
for the statutory requirements for woman owned businesses. Business is 
business and the certifications do not guarantee work, but they level 
the playing field allowing me to be in the game. Unfortunately, my 27 
years of experience in the rail business has taught me that I am not 
welcomed or respected without proving myself in each and every 
opportunity.
    Before I get into my examples, I would like to share with you the 
typical experiences I have experienced as a woman business owner. The 
discrimination that continues daily is systemic, ingrained and so 
subtle that it is overlooked. The anger, hostility and hate from men 
when confronted by me is, I believe, grounded in disrespect. Open 
hostility to me privately and in front of other women but not in front 
of other men. What is most concerning to me today is recognizing this 
hostility and disrespect to women on my management team. As I continue 
to grow, I am blending the skill sets amongst generations but have 
noticed that I must incorporate annual training in this area of 
discrimination that is not sexual. I never would have thought that this 
is what is needed for workplace culture and necessary for young women 
just entering the workforce.
    Specifically, a man will question me on a decision but will not 
question another man even if it is the same decision. The AEC industry 
continues to be male dominated at all levels. I am constantly having to 
prove myself in all aspects of business operations, when many of the 
men I'm working with only need to be knowledgeable in one aspect. If I 
question a man or challenge a man, I've been told I'm confrontational, 
I don't know what I'm talking about, or flat out I'm wrong. When in 
fact most of the time I'm right and it is very hard for a man to come 
back and admit that he was incorrect, and I was right. Why are we on 
the battlefield? Why are we competing based on gender?
    Yet this behavior is not all men. I have a male mentor who is a 
business owner, who shares his experiences and insights and we attempt 
to have lunch on an annual basis. At a Women in Transportation Seminar 
(WTS) event we were casually speaking about a situation I encountered 
and his response to me was ``Vicki, you are teaching me things now that 
I have never encountered. I'm learning from you.''
    To illustrate the issue that women and minority firms experience 
with procurement is due to the privity of the prime contract, are not 
allowed to have access to procurement, accounting, engineering, or any 
division of the owner. There is the exception of the EEO office. This 
leaves us powerless and without intelligence of the solicitation on the 
street to streamline our teaming efforts. If there is a conflict or 
inequity, then we can file a complaint. If I ever filed a complaint, I 
would never get work again.
    When I team on pursuits there is a conversation, an agreement on 
scope of services, a cost proposal and company information. 99% of the 
time I never receive a copy of the team proposal for our records. There 
is a general lack of communication to inform us of a win or loss. Many 
times, it is an afterthought on the Prime's part and we are asked to 
start work without an executed contract. I don't allow working without 
a contract or notice to proceed anymore. Too many times the dollar 
values assigned to my firm in a winning proposal never result in any 
revenue to my firm.
    In 2006 I sat down with a Project Manager (PM) for a large new 
contract. We discussed staffing and between the time of bidding and 
winning, one of my employees was reassigned. He thought I was doing a 
`bait and switch' which I was not. He told me what the rate should be, 
said find someone, and stated, ``A mom could do it.'' Being a `Mom', I 
did not sign the contract since if this man showed this level of 
disrespect to the female president of the company, how would he treat a 
female employee of mine working side by side in a trailer on a 
construction project site. When I reached out to another large firm who 
also was a subcontractor on this same contract, and spoke to that 
firm's vice president, his response was, ``Calm down Norma Rae.'' In 
the end, this contract come up unexpectedly prior to COVID and after 
delays in any signed contract or Notice to Proceed, I rechecked the 
contract and it included an old overhead (OH) rate. The current PM is a 
woman and the contract manager wondered why I never had a subcontract--
then I remembered the above. Prior to signing I explained to her that 
since I do not have a contract, I should not be held to an OH in 2006 
when times and the firm were different. She in turn then submitted the 
latest OH for themselves and all subconsultants and we proceeded to 
meet our deliverables. I do not believe I would have had a similar 
experience if the PM had been a male.
    I'm asked, `What can you do for me?' If I cannot meet with the 
owners, agency representatives and I cannot speak with them what can I 
do for them. In the beginning, I could not even get owner references. 
As I grew in experience, I have asked, and we have a few now. The only 
way I have been able to strengthen my network has been by leading a 
variety of professional organizations. This has provided the 
opportunity to meet and get to know clients who would never get to know 
me because of my subcontractor status. This adds a burden to DBE's 
trying to establish themselves and growing their portfolio of services.
    Sometimes, my company will pass on pursuing certain contracts. If I 
say `pass' on a pursuit, the response comes back `why?' Why do I need 
to explain my decision? This is not a question asked of male-owned 
firms.
    I have many specific examples of discrimination that I've faced 
over my career that I can recall in detail.
    I hired a senior manager from a firm who at the time was our 
biggest client. I was told to go meet with the President of the firm, a 
male, and make amends so that our firms can continue to work together. 
I knew within two months that this new hire was not going to last as he 
did not want to take direction from me, undermined my decisions, and 
created a toxic work environment. Why do I need to make amends when 
someone joins my firm, when the firm will hire an employee from another 
competitor and then the two will joint venture contracts together? Why 
the double standard?
    Another time, I spoke with a male Prime contractor regarding a 
contract for my firm. He said to me, ``During the negotiations, we 
negotiated your employees' rate with the Agency PM.'' I responded that 
I did not negotiate this rate nor am I going to take a 15 dollar an 
hour hit on his direct rate. The PM went to my lead (male) and 
discussed with him the situation to see if he could get around this. My 
employee sent him back to me.
    In September 2014, I was awarded a Prime contract with the FTA as 
the managing partner of a JV. I teamed with another woman owned firm. 
Shortly after award the owner of the other firm wanted out of the 
contract. The FTA Contracting Officer, a woman, walked me through what 
I needed to do to dissolve the agreement. The FTA had the confidence in 
awarding the contract solely to Envision. I am extremely grateful to 
the FTA in having the confidence for us to be a Prime, it has been a 
large learning curve but I and my team now understand all aspects of 
being a Federal Contractor and were successful in receiving our second 
Prime Award with the FTA in 2019.
    During the last quarter of 2012, a solicitation DTRT5714D30008 was 
placed on the street, and I teamed with three large Prime Contractors 
to bid on the work. Two of the three firms I had worked with in the 
past, one I had never worked with before. Two firms were successful and 
awarded the contract. The third firm, the one I had never worked with 
before never informed me of their success or failure in securing a 
contract. I spent time (and therefore money) with the firm upfront to 
put together components of their bid proposal and then never heard from 
them again despite numerous attempts to contact the firm.
    On another occasion, a Prime firm was awarded a contract to do 
program management oversight. The cost proposal submission included 
information that Envision would participate in up to $1,043, 964 of 
contract work (Indefinite Delivery Indefinite Quantity). A letter from 
the agency to the Prime stated ``In accordance with FAR Clause 52.244-
2, entitled ``Subcontracts'' (OCT 2010), consent cannot be granted for 
any of your proposed subcontractors.'' The Prime responded, ``In the 
case of Envision and any other subcontractors listed in this proposal, 
these firms have been subcontractors to [us] on other federal 
contracts. Typically, [we] have worked with all the firms on a cost-
reimbursement, time-and-materials, or labor-hour type basis.'' I never 
received a subcontract to execute.
    At another time, a Prime firm was also awarded a contract to do 
Program Management Oversight. Project amount to Envision $507,475 (IDIQ 
contract) from cost proposal submission. The Prime received the same 
letter as stated above. I received an executed contract and one task 
for $6,873.00; however never received notice to proceed to perform work 
and never billed. I remember this solicitation well and even contacted 
agency procurement for guidance to no avail. I provided the necessary 
supporting documentation in both cases. Federal Acquisition Regulations 
and federal government and agency-specific contract clauses were being 
thrown around and I was unable to get clarity. Since the Primes are 
engineers, not auditors, they also did not understand what the Agency 
was requesting, and expected me to simply know the answer. The Agency 
procurement made this complicated, cumbersome, time consuming and 
intimidating without understanding the rationale. When reaching out for 
help why is a man in procurement not asked to provide an explanation? I 
was not a new business; I was mature and experienced with an audited 
overhead statement.
    To further exemplify the treatment I've been faced with, in 2012, I 
teamed with a joint venture pursuit with two male-owned firms and 
completed all the necessary proposal documents, including a cost 
proposal for public outreach services. Envision's portion of the cost 
proposal was $1,164,240. At the time of contract review for execution, 
I was informed that Envision would only be performing services for one 
location as the contract was across multiple states, including New 
Jersey. Envision was not assigned New Jersey but Philadelphia as the 
joint venture spread the work to local firms. The JV did not share 
their plan to spread out the work with multiple additional vendors with 
me at the time of the proposal. We only received three task orders for 
a total of $99,072.18 over two years, and I was left out of the rest of 
the process.
    2012 was the first solicitation we teamed on for the FRA and to 
date I have not been invited to join subsequent teams for solicitations 
from this agency for the same scope of work since that time.
    If there is no incentive to utilize firms like mine, they will not 
be utilized. The large firms will pursue on their own and keep the work 
to themselves. As a business owner I made the decision not to search or 
pursue teaming opportunities in this arena after my experiences in 
2012-2014. If the arena opens to include and incorporate small woman 
and minority owned businesses like other agencies of government, such 
as the Federal Transit Administration and the Federal Highways 
Administration, I would pursue additional contracts.
    As Envision continues to grow, we will need to take on more Prime 
Contracts. If one agency of the government has confidence in my firm to 
be a Prime, then we should be able to compete for Prime Contracts with 
another agency. This would open another door to compete nationally for 
challenging projects that will have a social and economic impact.
    I was told years ago by a male agency procurement official ``You 
are not allowed to attend the pre-proposal meeting, only the Primes can 
attend.'' On the other hand, FTA reaches out to and includes DBEs 
intentionally for pre-proposal conferences, so DBEs can learn firsthand 
FTA's expectations and large firms can make contacts with potential 
sub-DBE's or joint venture opportunities.
    I do not have the luxury of staff positions solely for business 
development as a large firm does. Large firms have professionals who 
are employed full time with access to procurement staff and face to 
face meetings. In all my years of being in business, I have had five 
face to face meetings with an agency representative, none of which were 
with procurement. Why? Agencies will not meet with the small 
businesses. I refer to the importance of these meetings as 
`intelligence'. The large firm has the resources to mine the 
solicitation, meet and greet the agency, and establish a team. Firms 
like mine do not have this access unless they hire these types of 
professionals whose salaries can be higher than the owner, risking the 
woman and DBE certification.
    In conclusion, my story told above identifies that discrimination 
against women exists in this industry and that there is a need for 
establishing small woman and minority goals in Federal Passenger Rail 
Contracting. Unless there are goals established during procurement 
small woman and minority firms will not be utilized. Envision has 
pursued only two procurements outlined above in Federal Passenger Rail 
Contracting in 27 years of doing business. The large private national 
and global firms will continue to strengthen and dominate this market 
via mergers and acquisitions. Thus, performing practically 100% of the 
work to maintain their business interests respectively. The small woman 
and minority owned businesses still struggle to exist. With only a few 
large players winning and performing the work, more and more conflicts 
of interest will arise. This is an opportunity for small woman and 
minority owned firms to pursue, partner and team in other capacities 
with large firms only if the agency is ready to procure with a small 
woman or minority owned firm.

    Mr. Payne. Thank you very much.
    Now we will hear from Mr. Francisco Otero.
    Mr. Otero. Good morning to the committee. My name is 
Francisco Otero. I am the founder, president, and CEO of the 
PACO Group.
    PACO is a minority-owned and certified disadvantaged 
business enterprise that provides program and construction 
management consulting services. I started my company in 1989. 
Our headquarters are in New York City, and we maintain a 
regional office in Miami, Florida.
    My company specializes in providing project controls and 
related services nationally to Federal, State, local, and 
municipal government agencies that are involved in the design 
and construction of infrastructure and transportation projects.
    My company functions typically as an extension of an 
agency's staff, helping to protect their interests during the 
planning, design, bid/award, and construction phases of a 
project. Our services are intended to provide independent 
oversight support to the agency by monitoring and tracking the 
project's cost, schedule, and quality performance.
    My personal business experience is that it is almost 
impossible to compete with majority firms on federally funded 
projects due to their size, resources, and financial 
capabilities. I can honestly and emphatically attest to the 
fact that had it not been for the FTA's federally mandated DBE 
program, my company probably would not have been able to get 
started, much less survive for over 31 years.
    If you require proof, just look at the private sector of 
the construction industry where no DBE goals exist, and you 
will find barely any meaningful minority firm's participation.
    The DBE program provided my company the opportunity to 
subcontract with majority firms on federally funded FTA 
construction projects and has been the lifeline for contracting 
opportunities.
    As a matter of fact, the FTA's DBE program has enabled my 
company to participate on numerous high-profile mega projects, 
including Puerto Rico's Tren Urbano, New Jersey Transit's 
Hudson-Bergen Light Rail System, New Jersey Transit's Southern 
New Jersey Light Rail System, New York's East Side Access 
program, New York's Second Avenue Subway, and many, many other 
projects.
    One would think that the impressive resume of successful 
projects that my company has compiled over the years would be 
an adequate testimonial demonstrating the depth of our 
experience, capabilities, and qualifications.
    Unfortunately, that has not been the case. DBEs are 
relegated to seeking subcontracting opportunities with majority 
firms, and our teaming success, to a large part, depends on the 
majority firm's willingness and corporate culture towards 
diversity and inclusion.
    For the record, I do not expect any contract opportunity to 
be handed to me, and I don't feel any sense of entitlement. I 
freely and willingly embrace competing for work. I just expect 
the competition to be fair and that it provide a level playing 
field.
    I must admit that I do have a serious problem with and find 
completely unacceptable the way I am treated disrespectfully, 
rudely, and dismissively by many majority firms.
    I have on several occasions had a majority firm come right 
out and tell me they wish the DBE program would go away so that 
they would not have to bother teaming with firms like myself, 
that they would prefer being able to subcontract with whoever 
they want and not be forced to subcontract with DBE firms.
    They have gone so far as to say that DBEs are lazy, that 
the quality of their work is inferior, et cetera, et cetera, et 
cetera, all very stereotypical attitudes.
    Due to time, I will only mention one example, but in my 
written testimony there are many other examples of the type of 
discrimination that we face.
    So, in conclusion, recognizing that the small business 
sector is the economic engine driving the Nation's economy, it 
is important that DBEs can competitively participate on FRA 
federally funded railroad projects. The roles and opportunities 
that the FRA projects can provide will vary from track 
construction, to engineering, to design, to procurement of 
supplies, all that are intended to strengthen our rail systems 
nationally. This would mean millions of dollars for minority 
businesses and thousands of jobs within the minority community.
    PACO is ready, willing, and able to participate in FRA 
projects once the DBE program is implemented. I strongly 
encourage the congressional subcommittee to establish an FRA 
DBE program so that minority-owned businesses, such as myself, 
will have the opportunity to participate on these Federal 
projects as well.
    I thank you.
    [Mr. Otero's prepared statement follows:]

                                 
 Prepared Statement of Francisco Otero, Founder, President, and Chief 
                  Executive Officer, PACO Group, Inc.
    My name is Francisco Otero, I am the founder, President & CEO of 
the PACO Group, Inc. (PACO). PACO is a minority owned and certified 
Disadvantaged Business Enterprise (DBE) that provides Program & 
Construction Management consulting services. I started my company in 
1989 and our headquarters is located in New York City and we also 
maintain a regional office in Miami, Florida. My company specializes in 
providing Project Controls and related services nationally to Federal, 
State, local and municipal government agencies involved in the design 
and construction of infrastructure and transportation projects and 
programs. My company functions typically as an extension of the 
agencies' staff, helping to protect their interest during the planning, 
design, bid/award and construction phases of a project. Our services 
are intended to provide independent oversight support to the Agency by 
monitoring and tracking the project's costs, schedule, and quality 
performance. The specific services we offer include: Construction 
Schedule Management, Independent Cost Estimating, Project Cost Control, 
Document/Records Management, Claims Management, Risk Assessment, Value 
Engineering, Asset Management, Operational Analysis, Office 
Engineering, and Construction Inspection services.
    I serve on several civic and industry boards and have received many 
awards during my career. For over 20 years I have been an active member 
and have also served on the Board of the American Public Transportation 
Association (APTA), an international trade organization whose mission 
is to advocate, strengthen and improve public transportation. I also 
served a six-year term on the Board of Directors of the National 
Transit Cooperative Research Board. Additionally, I have a leadership 
role in numerous minority industry organizations including the 
Conference of Minority Transportation Officials (COMTO) and Latinos In 
Transit (LIT), where I advocate for leveling the playing field by 
providing meaningful procurement opportunities that enable capacity 
building for minority businesses. I am a Fellow at Rutgers University 
and Pontifical Javeriana University (Colombia, S.A.) where I am an 
invited guest lecturer teaching Configuration Management to the 
graduate and undergrad engineering students. I possess a Bachelor of 
Science degree, have written various ``white papers'' and made numerous 
presentations on Configuration Management.
    I was born and raised in Spanish Harlem (aka El Barrio) which is in 
the upper east side of Manhattan in New York City. My parents were 
first generation immigrants from Puerto Rico. This was a predominantly 
Puerto Rican neighborhood and even though we were very poor my parents 
were always able to provide for us. My first experience with 
discrimination was when I started my career working at a Fortune 500 
company. I observed after a while that all the supervisors, managers, 
and executives were white and mostly men. I did not at the time think 
anything of it until I had been working there long enough to inquire 
about promotional opportunities. I truly felt that I had paid my dues 
and I was qualified and merited a promotion based on my work 
performance. However, no promotional opportunity was ever afforded to 
me. I was shocked by this experience and learned a hard lesson about 
this so-called ``glass ceiling'' since I had grown up believing that 
one is judged by their abilities and not the color of one's skin. After 
working there for several years, I decided to leave and take a chance 
to be in control of my own destiny. I started my company with the hope 
of finding a niche in the highly competitive construction industry. 
However, I soon learned that as a minority owned business, I would 
continue to confront challenges and discrimination. This experience had 
a profound influence and committed me to wanting to build a diverse and 
inclusive organization. This philosophy is a principal part of my 
company's core values and is consistently practiced in our recruitment 
and talent acquisition policy. In fact, we currently employ 50 full-
time employees and 80% of our company's leadership team and 
approximately 65% of the overall staff is comprised of minorities and 
women.
    My personal business experience is that it is almost impossible to 
compete with majority prime firms on federally funded projects due to 
their size, resources and financial capabilities. I can honestly and 
emphatically attest to the fact that had it not been for the FTA 
federally mandated DBE program, my company probably would not have been 
able to get started, much less survive, for the past 31 plus years. If 
you require proof, just look at the private sector of the construction 
industry where no DBE goals exist and you will barely find any 
meaningful minority firms participation. The DBE program provided my 
company the opportunity to subcontract with majority firms on federally 
funded FTA construction projects and has been the lifeline for 
contracting opportunities. As a matter of fact, the FTA DBE program has 
enabled my company to participate on numerous high profile mega 
projects including: Puerto Rico's Tren Urbano Heavy Rail System; New 
Jersey Transit's Hudson/Bergen Light Rail System; New Jersey Transit's 
Southern NJ Light Rail System; New York City/Long Island Railroad's 
Eastside Access Program; New York City Transit's Second Avenue Subway 
System; New Jersey Transit's Sandy Recovery Program; New York City's 
Transit Sandy Recovery Program; Port Authority of NY&NJ's Sandy 
Recovery Program; Washington Metropolitan Area Transit Authority's 
Dulles Extension.
    One would think that the impressive resume of successful projects 
that my company has compiled over the years would be adequate 
testimonial demonstrating the depth of our experience, capabilities and 
qualifications. Unfortunately, that has not been the case! DBE firms 
are relegated to seeking subcontracting with majority firms and our 
teaming success, in large part, depends on the majority firm's 
willingness and corporate culture toward diversity and inclusion. For 
the record, I do not expect any contract opportunity to be handed to me 
nor do I feel any sense of entitlement. I freely and willingly embrace 
competing for work, I just expect the competition to be fair and that 
it provides a level playing field. I must admit that I do have a 
serious problem with and find completely unacceptable when I am treated 
disrespectfully, rudely and dismissively by majority firms. I have on 
several occasions had a majority firm come right out and tell me that 
they wish the DBE program would go away so that they would not have to 
bother teaming with minority firms. That they would prefer being able 
to subcontract with whoever they want and not be forced to subcontract 
with a DBE firm. They have gone so far as to state that all DBEs are 
lazy, that the quality of our work is inferior, etc. All very 
stereotypical attitudes and beliefs held by some, not all, majority 
firms and their employees.
    Another example of discrimination practice that I have personally 
experienced is at the Agencies' pre-bid conference. The pre-bid meeting 
is arranged by the Agency and is intended to provide an overview of the 
project and answer questions that prospective bidders may have 
regarding the Request for Proposal (RFP). These pre-bid meetings also 
serve as a networking opportunity for DBEs to meet with majority prime 
firms for potential teaming. The Agency also addresses the DBE goal 
requirements for the project. I have occasionally witnessed the 
majority firms strongly opposing and questioning the Agency's 
representative as to the need for DBE goals. The tone of their remarks 
are very racially charged and quite clearly expressing their 
disapproval of the DBE program and goals. I have heard them state ``we 
can't guarantee the quality or schedule of the project if you force us 
to subcontract 25-35% to DBEs''. They start making all kinds of excuses 
why the Agency should lower the DBE goal or eliminate it. So imagine 
approaching these majority firms to discuss subcontracting on this 
project after just witnessing their openly bigoted beliefs towards 
DBEs. Unfortunately, these procurements wind up being a ``shotgun 
marriage'' and I have found these teaming arrangements rarely turn out 
well for the DBE. The majority firm will do anything to make the 
relationship miserable to force the DBE to want to cancel their 
subcontract relationship. A common practice by some majority firms is 
holding back payments to DBEs to the point that we are in a serious 
cash flow situation. The majority firm will claim that they have not 
yet been paid by the client when in fact they have. They also refuse to 
adhere to the contract's terms and conditions regarding prompt payment. 
If the DBE complains to the Agency, this causes an even greater 
conflict in the relationship.
    In my opinion ideally, the DBE program should not only provide 
subcontracting opportunities but should also foster capacity building 
for DBE firms by providing meaningful participation. Obviously for this 
to work it requires a true partnership between the majority prime firm 
and the DBE that includes a mentoring-type relationship. The goal being 
that over time the DBE will build the capacity and be able to grow 
sufficiently to eventually prime opportunities or become an attractive 
joint venture teaming partner to majority firms. Hopefully some day, 
majority firms will come to the conclusion that embracing diversity and 
inclusion benefits us all.
    In conclusion, recognizing that the small business sector is the 
economic engine driving the nation's economy, it is important that DBEs 
can competitively participate on FRA federally funded railroad 
projects. The roles and opportunities that the FRA projects can provide 
will vary from track construction, to engineering/design, to 
procurement of supplies that are intended to strengthen our rail system 
nationally. This would mean millions of dollars for minority businesses 
and thousands of jobs for the minority communities. PACO is ready, 
willing, and able to participate in FRA projects once the DBE program 
is implemented. I strongly encourage the Congressional Committee to 
establish an FRA DBE program so that minority owned firms have the 
opportunity to participate on these federal projects as well.

    Mr. Payne. Thank you very much.
    Next we have Mr. Gnanadesikan Ramanujam.
    Mr. Ramanujam. Thank you, sir.
    1776, Philadelphia, Pennsylvania: ``We hold these truths to 
be self-evident, that all men are created equal, that they are 
endowed by their Creator with certain unalienable Rights, that 
among these are Life, Liberty, and the pursuit of Happiness.'' 
This is from the Declaration of Independence.
    Greetings, Chairman Payne and members of the committee. My 
name is Ram, and I am the president and CEO of Somat 
Engineering. We are a minority-owned consulting engineering 
business, headquartered in Detroit, Michigan, with offices in 
Cleveland, Ohio; Baltimore, Maryland; and Washington, DC.
    I start by saying, in business, both parties, in fact all 
parties, must get some benefit. That is an absolute must. My 
written testimony regarding the bias against minority firms and 
our difficulty to get work in the railroad industry is with 
your committee. I have presented three specific instances where 
I explicitly experienced how it feels to be treated differently 
because of how I look or how I sound.
    Number one, I was told to stay in my disadvantaged/minority 
lane and not aspire to grow in my profession and to compete 
with others.
    Number two, I was saddled--and I am saddled even right 
now--with different and unfair terms from all kinds of business 
partners, such as my financial institution, that many of my 
other nonminority competitors do not have to face.
    Number three, I found out about the racist and the sexist 
communication that goes on behind the veneer of civility. It is 
couched as humor, but it is there.
    But I am not here to complain. I am here to answer 
questions and to help make the case that a DBE program is 
essential to level the playing field for minority firms in the 
railroad industry.
    I am often asked how many times have I directly experienced 
discrimination, in writing or to my face verbally. My answer 
is: Not by a person in a position to give work out. No.
    But that is not surprising, because someone--anyone--who is 
engaged in questionable behavior, is unlikely to do so 
explicitly. The discrimination is subtle. It is unspoken.
    I just heard a new term recently, ``unconscious bias,'' 
``subconscious bias,'' whatever it may be. However, it is 
present. It can be inferred. How? By the work that we get--or 
rather, I should say, the lack of work that we have gotten.
    I am also asked to explain many times how a minority firm 
like Somat has been successful. We have offices in four cities, 
like I mentioned. If there is discrimination, how did this 
happen?
    But please note, Chairman and Members, the cities that we 
work in--Detroit, Cleveland, Baltimore, and Washington, DC--it 
is not by accident that we work in four majority-minority 
cities. We focus our energies on where we feel welcome, not 
where we are looked down upon.
    Our scriptures called us in my language [speaking foreign 
language]. We move away from that which is unpleasant and 
towards what is pleasant.
    Despite 35 years of recognitions and awards and a track 
record of performing higher end engineering services, such as 
expert review, expert witness, value engineering, we have 
performed zero--zero--work for the railroad industry and on 
FRA-funded projects. To me, this speaks volumes.
    Well, I end as I began, by saying that in business, all 
parties must benefit. This program is not an entitlement 
program, and those who do not perform, DBE or not, must be 
weeded out. The FRA and the industry will reap the benefit of 
competition and innovation with this inclusive action.
    I welcome your questions. Thank you.
    [Mr. Ramanujam's prepared statement follows:]

                                 
 Prepared Statement of Gnanadesikan ``Ram'' Ramanujam, P.E., President 
          and Chief Executive Officer, Somat Engineering, Inc.
    Greetings, Honorable Chairman Payne and other committee members:
    My name is Gnanadesikan Ramanujam. I go by one name ``Ram'' (like 
Prince and Madonna). I am the president and CEO of Somat Engineering, 
Inc. (Somat), a Detroit, Michigan, headquartered small, minority, 
disadvantaged engineering consulting business. I use the word 
``business'' deliberately because in business both parties must get 
some benefit, and because ``business'' depends on ``relationships''. 
Business does not, and cannot, co-exist with an attitude of 
entitlement.
    We have been in business since 1986, and we currently provide 
geotechnical, environmental, civil and structural engineering, 
construction inspection, material testing and project/program 
management services. Our focus is on aging infrastructure in our older 
urban areas, and we have offices in Detroit, Michigan; Cleveland, Ohio; 
Baltimore, Maryland; and Washington, DC. Our staff level fluctuates 
between 60 and 100 individuals due to the seasonality of construction 
work.
    Somat did NOT have the Disadvantaged Business Enterprise (DBE) 
certification for about the first ten years of our existence. We 
provided services primarily to local municipalities as a subconsultant 
to local, mainstream engineering consultants. Quality and delivery have 
been Somat's trademark, and we earned repeat business, as well as some 
new business via word-of-mouth referrals. We employed between 10 to 20 
people up to that point, working on small local projects which had 
modest budgets.
    In the mid 1990s, one of our clients told us about the Department 
of Transportation (DOT) DBE program and encouraged us to apply for it. 
We had not worked on any State DOT projects at that time, but our 
client pushed us to get certified explaining it would help them, as 
well as us, if Somat got DBE certified.
    In 1995, we worked on our first DOT funded bridge project, the 
Baldwin Road Bridge over I-75 in Auburn Hills, Michigan. After that, 
our DOT work really took off thanks to a robust DBE program and our 
continued emphasis on quality and delivery. Within a few years, in 
2004, Somat was nationally recognized by the Federal Highway 
Administration (FHWA) as the DBE Firm of the Year, and I received the 
award from then Transportation Secretary Norman Mineta in Washington, 
DC. In 2013, we also received the Historically Underutilized Business 
(HUB) Firm of the Year from the Conference of Minority Transportation 
Officials (COMTO) in Jacksonville, Florida. Today, our annual revenue 
from DOT work runs in six figure dollar amounts for highway and bridge 
related engineering and construction inspection & material testing 
work.
    We have done similarly well in the aviation sector and have worked 
on multiple major and smaller airports in Michigan and Ohio, again, 
thanks to a robust DBE/SBE (small business enterprise) program 
advocated by the Federal Aviation Administration (FAA). I am pleased to 
say that the Wayne County Airport Authority (WCAA) in Romulus, Michigan 
is currently soliciting Request for Proposals (RFP's) for consulting 
engineering services at Detroit Metropolitan Wayne County Airport that 
includes a Mentor/Protege provision in the solicitations aimed at 
increasing DBE/MBE/SBE participation. I say this because in the 25+ 
years that Somat has provided professional services to the WCAA, this 
is the 1st time this provision has been included in the RFP's.
    I take pride in saying our work has been the best testimonial for 
our technical competence:
      Somat works for multiple national consulting engineering 
firms in MI, OH, MD and DC on water/wastewater, highway, aviation, 
energy, and education projects, with all of them being for repeat 
customers.
      Somat has worked on several signature private sector 
projects like the new Detroit Lions football stadium; the new Detroit 
Tigers baseball stadium; the new Little Caesars Arena (LCA) 
Entertainment Complex for the Detroit Red Wings and Detroit Pistons; 
the new Henry Ford Hospital complex in West Bloomfield, Michigan; and 
multiple automotive suppliers. There is little to no tolerance for 
shoddy work in the private sector and pay is tied to delivery and 
quality of services provided.
      Somat has provided expert review services, as well as 
expert witness services, to national firms, private owners, and 
agencies in multiple states in the Midwest, and even in Russia for a 
General Motors plant in St. Petersburg.

    Interestingly, and sadly, despite our success over the past 35 
years, we find the playing field is still not level for DBE/MBE/SBE 
firms unless the owners and the agencies promote that concept.
    In our own case, the prime consultant that strongly, and 
repeatedly, pushed Somat to get the DBE certification, waited until we 
were DBE certified before offering us the opportunity to be on their 
team. I understand they would have been unable to get the credit for 
DBE participation if we were not certified, but my point is that the 
quality of our work would not have been any different whether we were 
certified as a DBE or not. The fact that the Federal Highway 
Administration (FHWA) implemented a robust DBE program is the only 
reason that particular prime consultant gave Somat a chance on that 
first project in 1995. Without such a program, I have no doubt that 
Somat would not be doing highway and bridge work today.
    Another concrete example of how DBE firms face the challenge of a 
non-level playing field comes to mind: in 2008, Somat lost our DBE 
certification because the size standards for small engineering 
businesses had not been adjusted for inflation. The reaction from our 
prime consultants was akin to a spigot being turned off. Even though 
there was not another DBE firm providing geotechnical engineering 
services (with our quality), the prime consultants removed Somat from 
their project teams, gave the work to other majority owned geotechnical 
companies, and tried to meet their DBE commitments by giving other 
disciplines of design work such as survey, maintenance of traffic, 
etc., to DBE firms. In some cases, the prime firms submitted good faith 
effort documentation to the agency to show they were unable to find a 
DBE to do the work.
    This clearly indicated two facts to me: first, the prime firms were 
pleased with the quality of our work. They were not taking Somat on 
their team solely because of our lack of the DBE certification. Second, 
despite being satisfied with our work quality the prime firms 
gravitated to a non-minority firm when we lost our DBE certification. 
When a prime consultant chooses a non-DBE, non-minority firm instead of 
a non-DBE minority firm (despite a long working relationship, expert 
level work, national recognition etc.), that is a clear indicator the 
playing field is definitely uphill.
    Moreover, when we temporarily lost our DBE certification, other 
prime consultants stopped taking Somat on their teams for DOT work. I 
spoke with the leaders of at least seven national and large regional 
firms about being shut-out. All of them were professional, honest and 
apologetic. They explained that the only reason they stopped teaming 
with Somat was our lack of the DBE certification, and they would resume 
doing business with us if we were to get the DBE certification back.
    Our revenue dropped below the federal small business size standard 
(annual revenue of four and a half million dollars at that time), and 
we obtained our DBE certification, again. Thankfully, the small 
business administration adjusted the small business standard after 
that, and we continue to be DBE certified.
    Having been in this business for over thirty years, I have 
personally experienced situations that definitely felt discriminatory 
to me. They are hurtful to recall, even now. The way I have handled 
such instances is to be practical, determine whether this is a client 
we want to continue to work for, swallow my pride and accept the bad 
with the good. Life will throw lemons at us, and we have learned how to 
make lemonade. The alternative is to forget the dream, close the 
business and work for somebody else. I will mention a few examples of 
my personal experience with discrimination:
    1.  We did a fair amount of business as a subconsultant to a large 
consulting engineering firm in Michigan for the Department of 
Transportation. As we gained experience, developed some relationships 
at the agency, and gained confidence, we started pursuing some smaller 
projects as a prime consultant. We were even successful in winning a 
prime contract and getting the best of this consultant in the process 
after declining to be their subconsultant on that pursuit. They were 
not pleased, and let us know very clearly that if we were to stray from 
the DBE lane and compete as a prime consultant, they would not work 
with us. Subsequently, they declined to be our subconsultant for a 
proposal we were well positioned to win and in fact, did win. It is the 
prerogative of a business to decide who they do business with. However, 
in this instance, I felt we were being schooled and put in our place as 
a minority owned firm for daring to dream that merit, quality and 
delivery of professional engineering services is what matters. One's 
socio-economic status or race should not determine one's dream nor the 
outcome for that matter.
    2.  Even the most basic of business functions can be, and is, a 
challenge. Banking is one example. We struggled to get a line of credit 
from a bank when we opened for business, and frequently used personal 
credit cards and short-term personal loans to make payroll. However, 
after 35 years in business, we find that banking is still a challenge. 
Despite never having missed payroll, paying payroll taxes in a timely 
manner, never filing for bankruptcy, having managed our line of credit 
responsibly, having the requisite insurance coverages, using our 
personal home equity line of credit, etc., I still have to provide a 
personal guarantee to the bank that allows them to take anything and 
everything in my name or in my wife's name should we default on a loan 
or the line of credit. In speaking to other non-minority companies of 
our size, I have not found a single firm that requires their major 
shareholders to give a personal guarantee to their bank. This puts 
tremendous pressure on me, and impacts every action and reaction of 
mine. Someone who is not in my shoes cannot understand my situation.
    3.  About twelve years ago, I received an email from a senior level 
management person with a company we do business with. The subject line 
was innocuous. When I opened the email, it consisted of several racist 
and sexist jokes. I was one of many recipients, and I was the only 
minority recipient. I felt that I was included by mistake. While I knew 
this person somewhat well through professional dealings, we did not 
have the relationship to share such jokes. Neither the sender nor I 
ever brought this email up, later. I would not have guessed that this 
person or many of the other recipients would be enjoying such dark, 
discriminatory, humor behind our backs. Thoughts lead to actions, and I 
wonder how much influence this attitude has on the teaming decisions of 
such leaders. Considering the difficulty of being selected for a prime 
consultant's team when there is no DBE goal, such an attitude clearly 
has a lot of bearing on who gets the call to be on the team.

    Coming now to the Federal Railroad Administration (FRA), and to the 
railroad industry more particularly, this is our experience:
    Zero! Zilch! Nada!
    Yes, it is true, and it is troubling, that in 35 years of being in 
business successfully, Somat has not worked for the railroad industry, 
nor have we worked on any FRA funded project.
    This begs the questions, ``Is Somat interested in railroad work and 
did Somat pursue railroad opportunities?'' I shall attempt to answer 
both these legitimate questions.
    To the first question, yes, Somat is definitely interested in 
railroad related engineering and construction inspection, material 
testing and project/program management work. We are passionate about, 
and are in the business of, infrastructure consulting and engineering. 
Railroads are an integral part of infrastructure.
    Moreover, having grown up in Africa and in India during my younger 
days, I have observed how passenger rail benefits the lower economic 
classes of society who do not have the means to own their own cars, or 
purchase their own plane tickets. After coming to the United States, I 
saw with my own eyes the even starker disparity here. Therefore, I have 
an interest in railroad work from a social, humanitarian and moral 
angle, as well. Equity in transportation is a civil right.
    To be clear, it is not as though Somat has not done any work 
related to railroads in our thirty-five years in business. We have 
worked on multiple railroad grade crossing improvement projects, grade 
separation projects and some light rail projects. The key point to note 
is that all of Somat's work for these projects was performed for either 
State agency, County government or local municipality contracts, 
primarily as a part of their roadway/highway programs. Not a single 
railroad project Somat has worked on was performed for the railroad 
industry or for FRA funded contracts.
    Coming to the second question, has Somat pursued railroad work? The 
short answer is, ``Not vigorously.'' Let me explain.
    As I stated in the beginning, business depends on relationships and 
relationships are developed over time if, and that is a big IF, there 
is an opportunity to make a personal connection. There is no question 
of relationship when there is no personal connection.
    This really translates to the age-old question of the chicken or 
the egg--getting selected to be on a team versus having the necessary 
experience to be selected. Why would the railroad industry take a 
chance on an engineering firm that has never designed tracks, signals, 
or structures before? Having said that, how will Somat and other DBE 
firms ever gain the necessary experience to be selected?
    Consider the following:
      Somat works for several national and international 
infrastructure engineering and consulting firms for other modes of 
transportation, and for other sectors of infrastructure such as water/
wastewater, energy etc. These firms are involved with railroads, but 
they have never taken us on their teams for railroad work. There is no 
incentive, and so, they do not want to risk losing a contract because 
of having an inexperienced DBE subconsultant on their team.
      Somat has worked on railroad crossings, grade 
separations, bus stations, transit centers, major utilities, and 
multiple large and complex buildings. Our skills are pertinent, and 
transferable, to structures and infrastructure related to the railroad 
industry. However, we cannot show past experience working for the 
railroad industry or on FRA projects.
      Somat has experienced, first hand, the instantaneous 
change in the reception we get due to the loss of the DBE 
certification. When such is the case, even with a robust DBE program, 
it is not difficult to fathom the reception we see in the railroad 
industry in the absence of a DBE program.
      At Somat, we have asked the larger firms and looked at 
RFPs and RFQs from the railroad industry to try and branch out. 
However, running a small, disadvantaged business takes a lot of time 
and when you factor in--cash flow issues, line of credit issues, 
staffing issues, etc., that disproportionately impacts minority DBEs. 
Time is the one resource that cannot be replenished, and we do not have 
the luxury of wasting it on pie-in-the-sky pursuits which is what the 
railroad industry is for us, without a DBE program by the FRA.

    There is a bias that is not favorable to minority DBE firms, able 
and looking to do quality work in the railroad industry. It may be 
unintentional (in some cases), but it is present, it is subtle, and it 
is systemic. The experience of this bias cannot be explained because it 
takes one to know one. The experience of enjoying a rare, fine, wine 
cannot be explained in a million words. One has to actually taste the 
wine. However, we can infer or conclude there is a bias against 
minorities in the railroad sector based on actual data. What percentage 
of railroad work goes to minority owned companies, compared to the 
percentage for highway, transit, aviation or maritime work that goes to 
minority owned firms? Anecdotally, the numbers are not even close and 
speak louder than I could ever shout.
    At this juncture, I must state that Administrator Amit Bose is 
doing all that is possible to help minorities and DBEs, given that he 
inherited this situation. In 2015, Congress mandated that FRA perform a 
disparity study in the FAST Act Bill. This was put on hold indefinitely 
by the Trump administration. Administrator Bose has picked it back up 
and is currently executing the disparity study. In addition, the 
administrator has been responsive to organizations such as the 
Conference of Minority Transportation Officials (COMTO) that work hard 
to level the playing field. However, he cannot do this by himself. He 
needs help.
    I strongly plead to you, Chairman Payne and to your committee, to 
set right this inequity. Other transportation modes within the US DOT 
all have robust DBE programs, and have given opportunities to DBE 
firms. It is imperative, and only fair, that the FRA also have a DBE 
program.
    I end as I began--in business both parties must benefit. The DBE 
program is not an entitlement program. The DBE firms must deliver the 
goods. Firms that do not deliver will drop off or will be dropped off. 
Prime consultants and the industry will still have options such as Good 
Faith Efforts to ensure they are not saddled with non-performing DBE 
companies.
    On behalf of the DBE community, I am requesting you to open the 
door. It is up to DBEs to earn our seat at the table, but absent the 
opportunity to even make the interview cut, we will be destined to 
languish forever outside the door.
    I will be more than happy to answer any questions. Thank you for 
your time.

    Mr. Payne. Thank you very much. I think that is a very 
important point you made. This is about leveling the playing 
field and everyone having the opportunity to compete in this 
great Nation.
    Next, we will have Ms. Evalynn Williams.
    Ms. Williams. Thank you, and good morning.
    I am the president and CEO of Dikita Enterprises, a family-
owned minority engineering firm located in Dallas, Texas. We 
will celebrate our 42nd year in business this month. In the 
transit and rail industry, we provide civil rail design, rail 
program and construction management, and transit market 
research.
    My father, Lucious Williams, founded the firm in 1979 in 
Milwaukee, Wisconsin, and moved the firm to Dallas, where I was 
attending college, in 1983.
    I am currently an executive board member of APTA, which is 
the American Public Transportation Association, and I am the 
first African-American female to chair APTA's Business Member 
Board of Governors.
    When we started the business in 1979, minority programs, 
such as the Minority Business Enterprise program, was the only 
way we could get work. Sadly, today, that continues to be the 
main driver.
    I remember my father applying for certification in 1983 and 
having to report on paper his recollections of how he was 
discriminated against. It was one of the many requirements of 
the long, arduous certification process. I recall how painful 
it was for him then and how I learned about the awful 
experiences he had endured.
    In the 1940s, when my father was younger, he played for the 
old Negro Baseball League and played for the Memphis Reds. He 
explained about being called racial slurs and having to go 
around the back to get leftovers from diners. When he was on 
the road, they weren't allowed to go into the White-owned 
establishments or sleep in regular motel beds. He and his team 
often slept on the bus or in cars.
    I think this is where my children and I get our ``can-do, 
don't stop, get it done'' attitude. Being pioneers as the first 
Black firm to get Government contracts--or one of them--we were 
often targeted. We survived, however, despite the many hurdles 
we had to climb, hurdles that are extra because we are a Black 
engineering firm.
    Unless you walk in my shoes, you have no idea how 
unconscious the typical nonminority is about understanding 
these microaggressions.
    I remember, less than a decade ago, we competed for a 
project from a midsize transit system in another State. We did 
our homework, we understood the local politics, and we won the 
project.
    During the negotiations, however, we ran into a problem. 
While our fees were acceptable and our references did check 
out, the procurement officer was not comfortable in awarding us 
the project. He asked me for my tax returns, my financials, my 
banking credentials.
    This was not typical. And as I gathered this information, I 
became angry. I called his boss, who I knew through transit 
associations, and I complained. And when the officer called 
back, his tone had changed.
    I asked him, ``Why were you treating me so differently?'' 
He told me and confessed that he had never awarded such a large 
project to a Black company and he was just trying to ensure 
that we were financially able.
    The DBE program provides equity, which in turn helps to 
build financial capacity and workforce resources. However, 
being called ``disadvantaged'' is not a privilege, nor does it 
sound like a goal a company would strive to be. Quite frankly, 
it was embarrassing explaining this to my 22-year-old 
millennial why we were considered a disadvantaged business.
    It was then that I had the opportunity to recall my 
experiences as my father recalled some 35 years earlier. Fast 
forward, it was only a matter of time that she has now begun to 
have her own stories.
    Large corporations would self-perform 100 percent of the 
work if left unchecked, just as they do in the private sector.
    Once I was a member of a panel discussing the merits of the 
DBE program. The panel was comprised of industry professionals. 
To my surprise, one of the panelists of a very large firm 
openly admitted that, if it was not for the DBE program, they 
would not subcontract to DBE firms.
    He felt as though there should not be such a program and 
that the entire process was not warranted. He did not see this 
as discrimination but his right to contract as he pleased.
    His remark, it was hurtful, but it was not surprising. 
These are just a few episodes regarding practices that either 
keep minority firms small or run them out of business, 
especially African-American firms.
    Regarding work on an FRA, we have only had one project 
about 10 years ago. It was a customer satisfaction survey for 
Amtrak. But the fact that the FRA does not have a DBE program 
speaks volumes as to why we only had one single project in the 
last 42 years.
    The services and skill sets we offer to FTA- and FAA-funded 
projects are much transferable to the FRA rail projects. And I 
hope that the FRA will adopt a race-conscious DBE program.
    Thank you.
    [Ms. Williams' prepared statement follows:]

                                 
Prepared Statement of Evalynn A. ``Eve'' Williams, President and Chief 
              Executive Officer, Dikita Enterprises, Inc.
    My name is Evalynn Williams. Most people call me Eve. I am the 
President and CEO of Dikita (pronounced Da Kee, ta) Enterprises, Inc., 
a family-owned minority consulting engineering and architectural firm 
headquartered in Dallas, Texas. We will celebrate our 42nd year in 
business this month. In the transit and rail industry, we provide civil 
rail design, rail program and construction management, and transit 
market research. We employ 35-45 professionals from diverse 
nationalities, many whom are woman and/or of a minority classification. 
My father, Lucious Williams, founded the firm in 1979 in Milwaukee 
Wisconsin and moved the firm to Dallas, where I was attending college 
in 1983. I promised him 2 years as his CFO in exchange for paying off 
my $5,000 college loan. That was 38 years ago, and we've been partners 
ever since. Lucious owns 51% of the firm and I own 47%, while my oldest 
daughter owns 2%.
    We offer our services to mainly the governmental sectors, that are 
federally, state or locally funded. We have two division. Our 
engineering division provides services to public transit, highways, 
aviation, public educational institutions, including K-12 and higher 
education, municipalities for roadway and infrastructure projects. Our 
transit planning division provides market research to the transit 
industry. We have worked on multi-billion-dollar projects as well as 
those under $100,000. We have worked across the nation providing a 
variety of services, typically transit market research. We are 
certified in 19 locations across the nation. Being certified in many 
areas allow us to participate with different transit and rail 
properties.
    I have a BBA degree in information systems and an MBA in 
accounting. I serve on several civic boards and have won my share of 
awards. I am currently a member of COMTO and the American Public 
Transportation Association (APTA) board of directors. I am also the 
first African American female to chair APTA's distinguished Business 
Members Board of Governors. APTA membership includes at least 90% of 
all public transit organizations in North America and practically every 
large national commercial firm that does business with public transit 
authorities.
    In 2010, I became President and CEO of Dikita, and my father has 
remained active as the Chairman of the Board and Director of Government 
Affairs. Being a female, an African American, and a small business in 
the construction industry has had many challenges. There are certain 
systemic stereotypes that are associated with all the classes of 
categories I've mentioned, but typically they all have one thing in 
common. There is the general mentality that women and/or African 
Americans produce inferior work products. These certainly aid to create 
barriers for successfully contracting and being relevant in the 
industry. Of all these labels, I think being African American, however, 
presents the biggest challenge when competing for work.
    When we started the business in 1979, minority programs, such as 
the Minority Business Enterprise (MBE) program was the only way we 
could get work. Sadly, today that continues to be the main driver. I 
remember my father applying for certification in 1983 and having to 
report on paper his recollections of how he was discriminated against. 
It was one of the many requirements of the long arduous certification 
process.
    I recall how painful it was for him then and how I learned about 
the awful experiences he had endured. It isn't a typical conversation a 
father or a man has with his daughter. In the 40's, when my father was 
younger, he played for the Old Negro Baseball League and played for the 
Memphis Reds. He explained about being called racial slurs and having 
to go around to the back to get leftovers from diners. When they were 
on the road, they were not allowed to go into white-owned 
establishments or sleep in regular motel beds. He and the team often 
slept on the bus or in cars. Sometimes, there were Black families who 
agreed to let him and his teammates sleep at their houses. Having to 
explain instances of discrimination during the MBE certification 
process was an opportunity for me to learn history including the 
painful parts of racism. I think part of our success today comes from 
the strength and determination he endured growing up. This is where my 
children and I get our ``can-do, don't stop, get it done'' attitude.
    I believe his courage and relentless posture are why we are still 
standing today. We were the first Black firm to get prime contracts in 
most of the local federally and state-funded government civil 
engineering projects in Dallas. Even after 40 years we still make 
history occasionally being the first African American firm to prime 
projects in our local Dallas/Fort Worth area. Many of the firms we 
began with in the early 80s no longer exist for various reasons, but 
mostly because of the lack of resources, opportunities, and 
determination to withstand. Today, we are the oldest African American 
professional engineering firm in North Texas.
    I remember, less than a decade ago, we competed for a project from 
a mid-size transit system in another state. We did our homework, 
understood the local politics, developed a great team and submitted a 
winning proposal. The services we offered were part of a niche market 
and not many companies compete in the transit ridership survey market. 
We were shortlisted and granted an interview. The day before the 
interview we practiced with our team until we were perfect. The next 
day we walked away from the presentation knowing we had won. During 
negotiations, however, we ran into a problem. While our fee proposal of 
$400,000 was acceptable and our references had checked out, along with 
the previous experience, the procurement officer was not comfortable 
awarding the project. He asked me for tax returns, financials, and bank 
credentials. This was not typical. As I gathered this information, I 
became angry. This was unusual. So, I refused. I called the officer's 
boss and explained the situation and how offended I was. When the 
officer called back his tone had changed. I asked him why he was 
treating me differently. He told me that he had never awarded such a 
``large'' project to a Black company and he was trying to ensure we 
were financially able to complete the work. He didn't realize that his 
admission was discriminatory. He actually felt that an African American 
company would not be able to complete the job. Did it bother me? Not 
really. It was just blatant discrimination. What bothered me most was 
the ``normality'' of it all. He was being truthful and ignorant. As an 
African American, I always know, it just rare that people admit it. The 
bigger picture was winning the contract and doing a great job.
    Being a disadvantaged business has certainly helped level the 
playing field. As the CEO of a 2nd generation African American 
engineering and architectural firm, we would never have sustained had 
it not been for disparity programs such as the Federal DBE Program. 
Competition for prime contracts with the US Department of 
Transportation would be very difficult at best, and out of reach for 
most minority and women owned businesses (M/WBE) if it was not for the 
program. Being the proprietors of an African American consulting 
engineering firm is a rarity, relative to the majority of engineering 
firms in the US. It is also a rarity among African American owned 
businesses. We have been able to sustain mostly because of USDOT's FTA, 
FAA, and FWHA DBE programs, along with local SBE and MBE programs. I am 
certain without these initiatives and goals, we would not still be in 
business, at least not in this industry.
    It is almost impossible for DBE firms to compete with large 
national and international firms. They have the capacity and depth 
within their workforce and can pull from global office locations. And 
over the last 15 years, they have gotten even larger, which makes the 
expansion of the DBE Program is so extremely critical to firms such 
ours. It provides us with opportunities to join a team as a 
subconsultant, a prime or joint venture partner, which in turn helps to 
build financial capacity and workforce resources. It's because of the 
DBE program, Dikita had an opportunity to have a leadership role in a 
joint-venture with a large majority firm to design and build the last 3 
miles of Dallas Area Rapid Transit system (DART) light rail system. 
Sixty-one percent of contract dollars went to DBE firms. This 
experience is an example of an agency that is serious about DBE 
programs. When a system is serious about DBE participation, it 
encourages larger firms to form associations with smaller firms who 
ordinarily wouldn't have a chance to ``sit at the table''. The lessons 
and the viewpoint when you are a prime of a large rail construction 
project is much different than the view from the bottom up. It's not 
business as usual. In fact, it was probably the first time in my life 
that I had the opportunity to be at the helm of such a large contract 
and award contracts to so many smaller firms. We had 15 subconsultants, 
all women or minority-owned. The pride and work ethic of this team was 
powerful. We saved the agency over $4 million and DART was able to open 
for revenue service 2 months ahead of schedule. We all had ownership 
and we all felt engaged.
    This is a great example of how the DBE program can help to grow 
smaller firms. However, being called ``disadvantaged'' is not a 
privilege nor does it sound like a goal that a company would strive to 
be. The reality is, without the program we would not have a fair chance 
at competition. Quite frankly, it was embarrassing explaining to my 
then 22-year-old millennial, why we were considered a disadvantaged 
business. I can tell you that we had an engaging conversation and a 
history lesson spun from this exposure. My daughter had no idea of the 
struggle or the blatant discrimination my father and I experienced over 
the years. It was then I had the opportunity to recall my experiences, 
as my father had recalled and disclosed to me some 35 years earlier. 
Fast forward, it was only a matter of time that she had stories of her 
own. This is unfortunate because she has witnessed how easy it was for 
her college buddies to advance to higher positions with salaries that 
allowed them to live in much better apartments. As an African American, 
the possibility of advancement is much more of challenge. However, she 
has the generational tenacity to forge ahead, especially knowing what's 
ahead.
    As I explained to her, had we not become certified, we would not 
still be in this business; no matter how well we performed. The 
positive effects of the DBE program are evident when you look at 
private vs. public work. We do not compete well in the private sector 
where the work is typically won by the ``good ole boys''. In the public 
sector, large firms contract with us only to the extent that it will 
help them win the project. If the goal is 25%, then they will typically 
subcontract only that minimum amount, even though we are a proven 
entity and have the experience and capacity to handle much larger 
tasks. And if the goal is 25%, there might be 3 firms sharing that 
percentage. I've actually had conversations with firms who have 
admitted that they would not subcontract any work had there not been 
for a requirement.
    The truth is . . . if not for the DBE Program, large corporations 
would not share the work and would self-perform 100% of contract-work. 
This is very likely in the private sector. And sometimes, I think 
larger companies really regret having to share government-funded 
projects. Once, I was a member of a panel discussing the merits of the 
DBE program. The panel was comprised of industry companies and 
government agency staff. The audience included suppliers/manufacturers, 
engineers, consultants, large and small businesses, government staff 
and others. Each member of the panel discussed their experiences with 
the program. To my surprise, one panelist of a very large firm openly 
admitted that if it were not for the DBE program, he would not 
subcontract to DBE firms. He felt as though there should not be such a 
program and the entire process was not warranted. He did not see this 
as discrimination but as his right to contract as he pleased. His 
remark was hurtful, but not surprising to me. It just further justifies 
the need for equitable programs to lessen the consequences the past 
discriminatory practices.
    The firms I do business with are typically not as obvious as the 
ones mentioned above. Case in point. We were going after a project in a 
small suburban community near Dallas. I found out about the request for 
proposal because I had very strong relationships in that community. 
Much of the project was within our wheelhouse and we felt certain we 
could successfully propose and win. Since there were parts of the work 
that others could do better, we reached out to a nationally known local 
firm that we had worked with in the past. They were not aware of the 
opportunity. What happened later was shocking but not surprising. In an 
email thread that was inadvertently sent to me, I read a discussion 
that went something like this (all names are fictitious and are here to 
make the conversation easier to understand):
      John informed his boss Ted of XYZ company that I had 
called about them subcontracting to us to provide service on an 
upcoming proposal.
      Ted asked about scope and John explained it and thought 
Dikita and XYZ could do well since they have worked together in the 
past.
      Ted asked about the minority participation goal.
      John told him that there was no minority goal.
      Ted asked John why they would sub to Dikita.
      John reminded Ted that Dikita was very good at providing 
these type of specialty services
      Ted told John that XYZ was bigger and to dig into the 
opportunity.
      When John asked about participating with Dikita, Ted told 
him that since there was no minority participation, they would just do 
the project themselves.
      When John questioned Ted again, Ted told him that XYZ was 
bigger and to reject our offer.
      This is when John sent us an email rejecting our offer 
and inadvertently included the entire thread.

    This kind of conversation among large majority firms is not unusual 
and is a matter of practice. And often we only suspect or hear about 
why we were rejected from a third party. However, this was played out 
in an email and was so painful and disappointing.
    These are just a few episodes regarding practices that either keep 
minority firms small or run them out of business, especially African 
American firms. It's common knowledge that minority businesses often 
live month to month unless we have been successful in backfilling our 
pipelines with future projects. One of the most disheartening feelings 
is to know that you are only as good as the current project. We have 
had many relationships with larger firms and have provided excellent 
service, but it's never quite the excellent services in which you are 
remembered. We are the token DBE checkbox that fulfilled the 
requirement. This I say because I have witnessed the less than genuine 
relationships we have forged. We can perform exceptionally well for 
many years on a 5-year large project. However, I notice that when that 
same large firm is going for the exact project-type in another state, 
they will not invite us to the team. When I've asked about being on the 
team, the reply is the same, ``we needed you in Dallas, we have to use 
someone else in Houston''. When I question why, the answer is always 
``because you are only useful in Dallas and taking you to other cities 
or states doesn't help us to win, it's political'', even if we are the 
best in providing the services required. Well, that mentality keeps 
firms like mine small and confines us to our own neighborhoods. This is 
sometimes the unintended consequence of the program.
    Regarding work on an FRA project, we have had only one. We did do 
one project with a majority firm about 10 years ago. It was a customer 
satisfaction survey for AMTRAK. But the fact that FRA does not have a 
DBE program speaks volumes as to why perhaps we have had only a single 
opportunity in all of our 42 years. If majority firms were required to 
fulfill a goal, we would have had the opportunity to participate on a 
lot more projects because those firms who always get the work would 
have to share the work. If the USDOT was interested in helping firms of 
color, it would be natural for the railroad administration to mimic 
what the aviation, highway, and transit systems are doing to grow 
firms. Afterall, we want to Buy America or Buy American, but if we do 
not grow American companies to the point of sustainability, this 
initiative will fail. More of America is becoming a melting pot of the 
races therefore it seems the logical and most direct way to ensure that 
we are the America for all Americans, we ought to consider ensuring 
that the playing field is level across all of the USDOT's departments. 
Not just the well-funded and convenient ones. High Speed rail is 
coming. America is ready to catch up with the rest of the world. But 
who's going to build it?
    In conclusion, the disparity, and the inequities of our 
capitalistic society, coupled with the injustices from America's 
history of discriminatory practices against African Americans 
specifically, are reasons that DBE program must continue to exist and 
expand. This program is not a handout, it's a leg up. It forces the big 
companies and big government to play fairly, and quite frankly without 
it, we would be out of business at the expiration date of the last 
contracts in our pipeline. We'd love for the FRA to catch up with FTA, 
FAA, and FWHA. The services and skillsets we offer FTA funded projects 
are very much transferable to FRA rail projects.

    Mr. Payne. Thank you very much.
    We will now move on to Members' questions. Each Member will 
be recognized for 5 minutes, and I will start by recognizing 
myself.
    I ask unanimous consent to include for the record the 
written statement of the Association of American Railroads.
    Without objection, so ordered.
    [The information follows:]

                                 
  Statement of Ian Jefferies, President and Chief Executive Officer, 
  Association of American Railroads, Submitted for the Record by Hon. 
                          Donald M. Payne, Jr.
    On behalf of the members of the Association of American Railroads 
(AAR), thank you for the opportunity to submit this statement for the 
record. Freight railroads operating in the United States are the most 
productive and cost-effective in the world, connecting businesses with 
each other across the continent and with markets overseas through a 
private rail network spanning close to 140,000 miles. AAR members 
account for the vast majority of America's freight railroad mileage, 
employees, revenue, and traffic. Amtrak and several major commuter 
railroads are also AAR members.
    In recent years, railroads have also invested an average of $25 
billion per year--$740 billion since 1980--to maintain and modernize 
its private infrastructure and equipment, and to research and develop 
new technologies that will ultimately serve to improve safety and 
reduce greenhouse gas emissions. As a result of these efforts, the 
American Society of Civil Engineers has given the nation's rail network 
its highest grade as part of its Infrastructure Report Card. The net 
economic impact of these investments and rail operations generally is 
tangible. In 2017, Class I freight railroads supported 1.1 million jobs 
(approximately eight jobs for every railroad job), $219 billion in 
economic output, $71 billion in wages, and $26 billion in tax revenues. 
In addition, millions of people work at firms, including the tens of 
thousand of firms that are rail suppliers, that are more competitive 
because of freight railroads. Sustaining these critical investments 
will be essential for freight railroads to meet the anticipated 30 
percent growth in freight transportation demand by 2040 and ensure that 
our nation's families and businesses receive the goods they need.
    Maintaining a privately owned railroad network touching virtually 
every state in the nation requires a broad range of capital and 
maintenance spending on infrastructure, technology, equipment, and 
services. Examples of products and services often provided by diverse-
owned suppliers include construction services, equipment rentals, 
environmental services, information technology services, leadership 
training, legal services, lodging, machining and tooling, railcar 
lubricants, relocation services, staff augmentation, signal materials, 
and video production services.
                           Supplier Diversity
    For many decades, the nation's major freight railroads have been 
committed to fostering diversity in supplier networks, as diversity is 
an effective way to promote innovation, reduce costs, and improve 
service competition. This competition can also introduce new products, 
services, and solutions that might otherwise be unnoticed. In many 
cases, competition spurs further investment in the communities in which 
railroads operate, promoting job creation at the local level.
    Today, inclusive procurement is a core value of the leadership of 
the freight railroad industry. The railroad industry recognizes that 
commitment at the highest level of management is key to a successful 
supplier diversity program. Railroads have appointed specific 
individuals and diversity supplier teams within their companies to 
provide accountability, measurable tracking, and reporting milestones 
for senior management.
    To achieve results, the major Class I railroads have all initiated 
Supplier Diversity Programs aimed at disadvantaged, minority-owned, 
women-owned, and veteran-owned businesses. These programs operate in a 
variety of ways to generate annual improvements in the diversity of 
suppliers used by the railroad industry.
          Expanding Opportunities for Diverse-Owned Suppliers
    Railroads use a variety of strategies to expand the diversity of 
their supplier base. Some of these efforts include:
      Maintaining web-based portals for potential suppliers to 
submit profiles of their companies. This allows for suppliers to make 
themselves known to the railroads and to remain visible on an ongoing 
basis. Based on the materials and services noted, profiles can then be 
routed to appropriate sourcing teams. Managers in charge of supplier 
diversity actively monitor these portals and serve as a liaison between 
the railroads and their suppliers;
      Partnering with certification councils and other supplier 
diversity professionals;
      Sponsoring and participating in national, regional, and 
local events, such as one-on-one matchmaker meetings, roundtable 
sessions, business fairs, developmental sessions, and new member 
orientations. For example, certain railroads work with the following 
organizations: the National Center for American Indian Enterprise 
Development; the National Minority Supplier Development Council 
(NMSDC); the NMSDC Transportation Industry Group; the U.S. Hispanic 
Chamber of Commerce; the U.S. Pan Asian American Chamber of Commerce; 
the Women's Business Enterprise Council; the Woman Owned Small 
Business; various veteran support groups; the Agenda for Building 
Capacity; the Hispanic Contractors Association; the Hispanic American 
Construction Industry Association; and the Supplier Diversity 
Professional Work Group;
      Connecting current and potential disadvantaged businesses 
with buyers at other corporations to foster opportunities throughout 
the supply chain;
      Serving on boards of directors and on other committees, 
such as regional Women's Business Enterprise Councils and the National 
Minority Supplier Development Council's Transportation Industry Group;
      Advocating within the railroads for qualified suppliers 
through ongoing project status meetings, supplier review sessions, and 
buyer participation in events; and
      Guiding non-certified suppliers to become certified as a 
diverse-owned supplier.
                                 CREATE
    By way of example, the Chicago Region Environmental and 
Transportation Efficiency Program (CREATE) is a public-private 
partnership underway to complete roughly 70 railroad-related 
infrastructure improvement projects in the Chicago region. These 
projects include building and repairing tracks and structures, 
upgrading signals and technology, and improving safety and delays at 
certain railroad crossings. CREATE partners, which include federal, 
state, city and county governments, major freight railroads, Amtrak, 
and local transit, have worked collaboratively to promote supplier 
diversity since its inception in 2003. A diverse supplier base has been 
actively recruited and encouraged to submit bids on projects, and data 
show that targets have often been met or exceeded. The most recent 
data, for example, show that 23 percent of the work performed on ten 
completed railroad projects, with $37 million in contracts awarded, 
went to disadvantaged business enterprises. This exceeded the target 
goal of 21 percent. The CREATE partners have hosted a series of 
disadvantaged business enterprise contractor diversity workshops in 
recent years to highlight upcoming bid opportunities within the CREATE 
Program. The most recent virtual workshop occurred in April 2021 that 
included participation with several local elected officials.
                      Effective Vetting Processes
    Freight railroads have established vetting processes to ensure that 
suppliers meet their requirements for a diverse-owned supplier. Part of 
that process is ensuring that a supplier qualifies as a disadvantaged 
business, including that the business must be at least 51 percent 
owned, operated, and controlled by a qualifying member of a diverse 
population (such as a veteran, minority, person with disabilities, 
female, or LGBT). This may also include reviews for qualification under 
certain governmental designations, such as HUBZone, Small Disadvantaged 
Business, Disadvantaged Business Enterprise, and 8(a) Business. 
Qualified owners must have control of the company and be active in day-
to-day management and daily business operations.
                    Labor Agreements and Outsourcing
    Approximately 84 percent of Class I railroad employees are 
unionized. Through collective bargaining, management and labor agree on 
the parameters of pay, benefits, and working conditions, as well as the 
types of services that can or cannot be outsourced. Depending on the 
project at hand, opportunities for contracting for services outside of 
the railroad labor workforce may be limited or not permitted. When 
labor agreements do allow for outsourcing, the railroad industry 
actively seeks diversity in its supplier network.
                               Conclusion
    AAR member railroads are committed to proactively identifying, 
attracting, and developing long-term partnerships with diverse and 
disadvantaged businesses. Doing so makes good business sense; it 
enhances value, competition, and innovation; and it is reflective of 
railroads' customer bases and the communities they serve.
    Mr. Payne. Ms. Williams, let me start by commending you for 
being here today and publicly sharing what is certainly an 
uncomfortable and unsettling experience. It is deeply troubling 
to hear that your company did not receive fair consideration 
for a project because there was no minority participation goal.
    If these goals were in place for projects and you had the 
opportunity to fairly compete, in what ways do you think that 
would have changed your business?
    Ms. Williams. One of the things that is troubling and is 
often a challenge for small and minority contractors is the 
ability for sustainability.
    As you know, in our arena, we live by projects, projects 
after projects, and the only way that you can be truly 
sustainable and successful in this business is by having 
continuous work. By having continuous work, you are able to 
have the workforce to move from one project to the other.
    Many times what happens to small businesses and African-
American businesses is that when the project is over, many 
times you do not get that continuity between projects, so you 
end up losing your workforce.
    And you know what is worse? What happens more than often is 
that your staff is now absorbed by your prime contractor, your 
prime consultant. You look around and your people are working 
for their people and advancing. And there you are left looking 
for more people.
    So that is the major reason why I think it would change.
    Mr. Payne. Thank you.
    Mr. Canty, I found your testimony quite profound in that 
you knew from a young age that you wanted to work in the rail 
space and continue to do so, despite the racial discrimination 
you have suffered.
    One of my priorities in examining racial discrimination in 
the Federal passenger rail contracting space is ensuring that 
minority men- and women-owned businesses have opportunities to 
build capacity and grow as large as multinational construction 
firms.
    If minority contractors like yourselves were not 
systematically excluded from the same kind of starting 
opportunities that were given to large multinational 
construction firms, what impact would that have?
    Mr. Canty. In 2014-2015 where we reached our apex, 
particularly when we were doing work with Amtrak, we were 
trending at 38 employees, we were in 14 different States, 5 
regional offices, and were working on an international office 
in Bulgaria.
    If we had been allowed to continue to move forward without 
this discrimination, we would have been definitely probably 
into our fifth or sixth large bridge demolition contract. The 
first one we did was in Charleston, South Carolina, in 2016 to 
2017. We would have been probably a force of 50 to 100 
employees at least. Definitely would have been in the $20 to 
$30 million range. And we would have actually been knocking on 
the door of not qualifying for the DBE program anymore, which 
is the whole point of the program, is not to qualify for it.
    Our goal was by 2018 to 2024 that we would have been 
exiting the DBE program. So we would have been playing a major 
role, and a major employer, particularly in Black and Brown 
communities, because we did have a program of hiring folks from 
the--we had literally a prison-to-work pipeline that we had 
enacted where we were hiring folks coming out, because 
construction is one of the industries that you can start from 
the bottom and go right to the top no matter what your 
background is.
    I have to tell you, the places we would have been would 
have been unlimited. The construction business, with all its 
issues, is still one of those businesses that you can do very 
well if you work hard, as long as you don't have to deal with 
the systemic discrimination.
    Thank you.
    Mr. Payne. Thank you very much.
    Now I will go to the ranking member, Mr. Crawford, for 5 
minutes.
    Mr. Crawford. Thank you, Mr. Chairman. I appreciate the 
opportunity.
    I just want to, to any of the panel that want to comment, 
what would you identify as the single biggest barrier that 
minority- and women-owned contractors face in receiving 
contracts for passenger rail projects?
    Mr. Ramanujam. Well, sir, it is a classic case of the 
chicken or the egg. 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. So, a 
lot of times that is what I have been told, that, ``We like 
you, but you do not have the experience.'' That has been a 
challenge for us.
    Mr. Crawford. Thank you.
    Anybody else want to weigh in on that?
    Mr. Canty. I would also add the financial constraints, some 
of them particularly unique to the minority business community.
    So, in order to get funding, including bonding, you have to 
have a certain net worth, or if you don't, then you basically 
hand over everything you own except a table and four chairs to 
the bonding company. But in order to be a DBE, you can't exceed 
a certain net worth.
    So, what we are finding is you get in, even if you get the 
financial background, sometimes owners, but definitely these 
primes, are using the bonding company in a term from the 1980s 
called ``bond 'em and break 'em.'' They will bond you, they 
will break you through the contract, you will lose everything 
you have, and you can't even start over at that point.
    I think the financial constraints are one of the biggest 
barriers of entry. And the rail work requires significant 
insurance, and that shouldn't change, but there has got to be 
some look at how you can be financially viable and not have it 
used against you.
    Mr. Crawford. Ms. Williams, anything to add?
    Ms. Williams. I wanted to ask you to repeat the question, 
please.
    Mr. Crawford. Sure. I am just trying to get a sense of what 
you find to be the single biggest barrier to being able to 
compete in receiving those contracts for passenger rail 
projects.
    Ms. Williams. I don't know if you are speaking of within 
the DBE, that arena that has established a DBE program, or you 
mean the FRA nonestablished----
    Mr. Crawford. Well, we have established that the FRA 
doesn't have a DBE, and so I am just trying to gauge the degree 
of difficulty and what is the single biggest barrier in that 
space outside of the DBE, what you find the most challenging.
    Ms. Williams. We probably can go back and look and see who 
is getting the projects, and they are probably the same guys 
that are getting the projects every time. And as long as they 
are getting them every time and then they don't have any kind 
of goal to bring anybody new, or bring in smaller or minority 
companies, they will continue doing what they are doing.
    So, the barrier is that there is a barrier. Nobody is going 
to--if I have been getting the contract for years and years, 
why would I bring on a small minority company? So, the barrier 
is because there is no incentive to do anything different.
    Mr. Crawford. Mr. Clark, anything to add?
    Mr. Clark. First of all, I agree with all our panelists 
here. But I have to break it down to a matter of greed.
    The prime contractors do not want to sub out any work that 
they do, because that is where they make the most money. So, 
they want to relegate you to smaller areas, such as trucking or 
maybe supplying materials.
    We as a rail contractor want to do rail projects. And we 
perform well when we are given an opportunity. But if they 
don't have to, unless they have an incentive to give out work 
that they do, they will not, and we find that to be a barrier 
to moving forward.
    There are some companies that have made it a habit of not 
giving out anything related to what they may do. And so, it is 
more difficult for us to break into the market. And if we do 
break into the market, then we become a hindrance to everybody 
there. Now everybody has to listen to us and listen to us 
trying to come in and do the work.
    Mr. Payne. Thank you. The gentleman's time has expired.
    We will now move on to Mr. Carson for 5 minutes.
    Mr. Carson. Thank you, Chairman.
    I really appreciate the testimony today and the leadership 
of our Chairman Payne.
    What do you all think would be the most impactful way to 
increase the number of Black and Brown professionals in the 
rail sector overall and the passenger rail sector in 
particular? Is this led by industry or is there more action 
needed from the FRA or DOT or even Amtrak to better implement 
programs that are already in place? And what new efforts might 
we consider? And what can the subcommittee do to advance 
diversity in aviation?
    Ms. Williams. I would like to answer that.
    One of the things that has to happen is what I see--and I 
have to commend the agency that has given me probably my 
biggest leg up and the most work, and that is Dallas Area Rapid 
Transit. And what they do is it starts at the top. It starts 
with the CEO. It starts at the board level. And it encouraged--
everyone knows, who goes to work for DART, that you are going 
to start off with the goal, but that is the minimum. That is 
the floor. You are not going to win if the goal is 30 percent 
and you come in with 30 percent.
    And case in point, we had a project that we had--I ended up 
as a joint venture partner 50/50, and we brought on 15 
different minority subs. We saved the agency $4 million, and we 
brought it in 2 months ahead of time. And the participation on 
that project was 61 percent. That doesn't happen unless it 
starts from the top down.
    Mr. Ramanujam. Representative Carson, this is Ram. Trickle-
down economics just does not seem to work when it comes to 
getting work with the railroad sector. So, to your question, 
would industry be the right people to take the charge? We have 
not seen that be effective. It has to be basically both a 
carrot and a stick approach from the Federal Government to 
ensure that there is some incentive for smaller minority firms 
to get some work. So that is what we feel.
    Mr. Canty. Kenneth Canty with Janus. You know, you have got 
a lot of these bad actors out there. They are typically large, 
large companies because they get away with this stuff. And I 
think the most effective thing you can do is make it part of 
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 size, $200 million, $300 million range, who started off 
as small guys, and they are not necessarily minority, but they 
started off as small guys, and they just don't tolerate this 
stuff. They just don't tolerate it. Because their bid, come in 
and work and we are going to give you a fair chance, and they 
haven't gotten so big where the racism is actually profitable 
to them.
    That is the thing, is the racism is profitable and 
discriminatory acts are profitable to these people. That is why 
they continue doing it. They do it because it is profitable.
    So, you have got--I think this committee--the agencies 
through the leadership of this committee have to make that--
even if you hear about it, it needs to be answered because 
where there is smoke, there is fire.
    Mr. Carson. That is helpful.
    Lastly, I am proud to represent the largest rail 
maintenance facility in Beech Grove, Indiana, one of the cities 
in my district, where they repair locomotives and passenger 
rail cars. They do great work there. We would like to see them 
do more, but there appears to be a closed process that is 
really hard to break if you don't know someone at the facility. 
And this challenge isn't unique to our district. It is a 
challenge for many facilities across the country, particularly 
as it relates to hiring Black and Brown applicants.
    What can be done to open these doors wider so we can bring 
in more diverse workers?
    This is an Amtrak maintenance facility, by the way.
    Mr. Clark. Well, I think it is incumbent upon us as 
minority contractors to reach out and try and train individuals 
who are interested in the work, for example, in the rail 
industry.
    We did the maintenance on the WMATA contract when they had 
the work that they had to complete very quickly, the fast-track 
part work. And we went to a trade school in Brooklyn and 
brought down over 50 students who had just graduated, and we 
gave them an opportunity to learn. We trained them. We gave 
them housing. And these graduates did a wonderful job for us as 
we completed the work successfully, and many of them now have 
careers in doing track work. So, we took it upon ourselves to 
do this.
    And now we do have another maintenance contract we are just 
starting today with Shell, and we have several people that are 
coming down to work on this project that we gave the 
opportunity to work in Washington 2 years ago.
    So, we have done this ourselves. I think there should be 
some kind of incentive to hire workers and train them, some 
kind of tax credits or something like that that would make a 
difference to the contractor and would make a difference in 
pricing that we would give to the prime contractors.
    Mr. Payne. Thank you.
    Mr. Carson. Thank you, Chairman.
    Mr. Payne. The Chair now recognizes Mr. LaMalfa for 5 
minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman. I appreciate working 
with you, ever since we have known each other at the beginning 
of our times in Congress together.
    So, I just would like to get Mr. Clark's attention for my 
questions on this here. Basically, what we are looking at here 
in California is the high-speed rail system that has been 
troubled from the very beginning. But, early on in the project, 
it was constantly accused of not getting minority companies 
involved. So, in 2010, a civil rights coalition claimed only 12 
out of 134 prime contractors were minority-owned firms.
    So, last week, the L.A. Times published a piece going into 
detail about the impacts it has been having on the communities 
themselves. We have disadvantaged communities that are seeing 
issues with the way the system is doing business.
    So, for example, in agriculture, farmers are having their 
land taken through eminent domain, yet it has taken years and 
years for them to get paid for it. The projects that are going 
through a lot of low-income neighborhoods, Black neighborhoods, 
Latino neighborhoods, it took down, in some cases, some very 
important institutions. Like in Fresno, the rescue mission 
there, for example, which helps a lot of people as a homeless 
shelter in the Central Valley. And Bakersfield is going to lose 
a homeless shelter here soon. So, the impact on communities is 
really tough, too.
    So, the project also at some point is supposed to go 
through San Jose, and it is going to go right straight through 
a Latino neighborhood there. So, these aren't obviously 
temporary. They will be forever as long as the rail is around.
    And so, for folks to get compensated, for them to even be 
heard as to whether this is a good idea to go through their 
neighborhood or such, coming back to the Fresno rescue mission, 
it took 8 years in a lawsuit to get compensated for their being 
damaged the way they were, being basically eviscerated.
    So, Mr. Clark, you are experienced in heavy rail. I would 
like to see what you think about some--has anything you have 
been involved with ever been asked to build tracks through 
these types of neighborhoods, through these types of shelters, 
and other things that are pretty critical towards the 
communities we are talking about here? And have they been held 
accountable for doing that kind of damage?
    Mr. Clark. Well, absolutely. In my initial testimony, I 
talked about what we did in Chicago. We worked with the Urban 
League, we worked with the churches, we worked with the 
community organizations to recruit and vet minorities and 
women. And, again, we took them and trained them on the job. 
On-the-job training is what we gave them. And they ended up 
working so very well that our prime contractor, who was one of 
the largest in the world, sent us home for 2 weeks so they 
could catch up with us.
    Now, we did that because we wanted to make sure the 
community was, one, benefiting with regard to the work and the 
opportunity that we could give them, but also to make sure that 
our reputation was such that we do more than just the work. We 
try to really make an impact in the community. We try to make 
sure our workforce looks like our ridership.
    So, everywhere we have gone, not just Chicago, we have done 
the same in Atlanta, we have done the same with MARTA, the 
transit organization there. We have done the same at DART.
    Ms. Williams testified about the 61-percent minority 
workforce that was with her joint venture. Well, we did those 
two the same. This is what we do. We look to make a difference.
    And when Donald Trump came in and tried to take away local 
workforce hiring, well, they were--the major companies wanted 
to bring in their workers and not really do anything for the 
community.
    Mr. LaMalfa. Right. That happens around here when we have 
these issues with the fires burning up the communities here in 
northern California, that is really difficult to overcome the 
barriers of small local companies, no matter their makeup, to 
overcome the big on that with getting contracts.
    A relative of mine has a small company, and he can hardly 
break into doing jobs at his unique business in the bay area, 
for example, because it is either you are too small or you are 
not in the union, for example. So, we have got issues across 
the board on that.
    As we have seen with high-speed rail, they pretty much have 
basically ignored local concerns and don't involve local 
private companies. Do you think that this will lead to even 
more problems on the California project or is that--you know, 
what do you think about that?
    Mr. Payne. Excuse me, but the gentleman's time has expired.
    Mr. LaMalfa. Wow, that was fast.
    OK. Thank you, Mr. Chairman.
    Mr. Payne. Thank you.
    Next, we will hear from the vice chair of the subcommittee, 
Ms. Strickland, for 5 minutes.
    Ms. Strickland. Thank you, Chairman Payne and Ranking 
Member Crawford.
    Mr. Chairman, I have an opening statement to enter into the 
record.
    Mr. Payne. Without objection.
    [The information follows:]

                                 
  Prepared Statement of Hon. Marilyn Strickland, a Representative in 
Congress from the State of Washington, and Vice Chair, Subcommittee on 
             Railroads, Pipelines, and Hazardous Materials
    Railroad expansion in the United States has historically depended 
upon discriminatory practices--from the railroads' Western expansion 
federal land grants that violated federal treaties with Indian tribes 
to limiting Black, Asian-Pacific Islanders and Latino American 
employment opportunities. The American railway labor force has been 
sharply segmented along gender, ethnic, and racial lines since its 
beginning in the late 1820s and early 1830s. Minority men played a 
critical role in constructing the infrastructure necessary to develop 
the railroad industry. Immigrants from China, Japan, and Mexico and 
formerly enslaved African Americans comprised much of the workforce 
that graded roadbeds, laid track, and ensured upkeep over rail networks 
throughout the U.S. White men avoided this work as it was considered 
arduous and dangerous. High level and well-paying jobs in the railroad 
industry were reserved for white men.
    In the Pre-Civil War era, southern railroad systems depended on the 
labor of enslaved individuals. Many railroads made up their entire 
train crews, except for conductors, with enslaved laborers. This meant 
enslaved individuals gained experience working as rail firemen, 
brakemen, and engineers. After the Civil War and Emancipation, southern 
railroads continued to rely on the labor of African Americans. The 
number of African American engineers dramatically decreased after the 
war; white workers were given preference after railroads were made to 
pay their African American workforce. In the south, African American 
rail operating employees were predominantly restricted to the roles of 
firemen and brakemen, or kept at the level of porter in name while 
performing the duties of firemen and brakemen. In the north, African 
Americans were entirely barred from the positions of fireman, brakemen, 
engineer, and conductor.
    In 1910, statistics collected by the U.S. Department of Commerce's 
Bureau of the Census indicate that railroads promoted only three 
African Americans from fireman to engineer for every hundred whites in 
the southern United States. In addition to promoting white men to the 
role of engineer, railroads also paid white workers in fireman and 
brakeman roles higher wages than their African American counterparts. 
This limitation of opportunity was reflected in union membership, 
exacerbated by some unions barring African American engineers from 
joining their membership.
    In 1957, a study conducted by the New York State Commission Against 
Discrimination and the New Jersey Division against Discrimination found 
that less than one percent of railroad operating jobs were held by 
African Americans. In 1962, Congress received testimony that southern 
railway labor forces had transformed from majority African American to 
overwhelmingly white. The witness, A. Philip Randolph, argued African 
Americans' rapid exit from railroad operating departments demonstrated 
the urgent need for fair employment legislation. Increased access of 
African Americans to good-paying railroad operating jobs was driven by 
the passage of the Civil Rights Act in 1964. However, discrimination 
has persisted.
    In 1976, Congress passed the Railroad Revitalization and Regulatory 
Reform Act (4R Act), which stated that activities funded by the bill 
must not discriminate against any person. In 1979, the Government 
Accountability Office (GAO) found the FRA was not effectively enforcing 
this provision of the law. The GAO stated that discrimination would 
persist unless, ``minority business enterprises and entrepreneurs were 
made aware of opportunities in which they could participate; and 
assistance was made available to them to overcome endemic problems of 
minority businesses in this country, i.e. lack of capital, lack of 
access to major markets and lack of sufficient supply of capable 
managers.'' GAO's principal findings noted marginal success in internal 
FRA efforts to prohibit discrimination on federal contracts and that 
progress was not substantial. Furthermore, in examining the industry 
climate for minority businesses, GAO quoted stakeholders describing the 
railroads receiving 4R Act funding as `` `dragging their feet' and . . 
. doing only what they are forced to do.''
    Women were also denied advancement to high-level and good-paying 
jobs in the railroad industry. Since the inception of railroading, 
women worked a variety of jobs including coach and depot cleaners, 
restaurant servers, passenger train hostesses, telegraphers, and 
clerks. The role of coach cleaner was most commonly filled by African 
American women. During WWI and WWII, employment of women on railroads 
spiked to fill vacancies left by men assigned to the war effort. While 
the experience women built in these roles allowed some to stay in the 
industry after the wars, most of their positions were returned to male 
workers. Women were firmly excluded from operating and skilled 
maintenance crafts until the 1970s.

    Ms. Strickland. And, Mr. Chairman, I want to thank you for 
your leadership in holding this important hearing today. And I 
especially want to thank all of the witnesses for your factual, 
compelling, and diverse stories of discrimination.
    The topic of this hearing today is, does discrimination 
exist in Federal passenger rail contracting? And without having 
to even do a disparity study, I knew the answer was yes, and 
those who have testified have demonstrated that.
    We also know that a lot of the racial and gender 
discrimination that exists through your stories and 
experiences, there are other people who have the same stories 
to tell, but they are just not here today. They have been 
denied contracts, opportunities, and fair consideration. And I 
sincerely thank all of our witnesses today.
    Mr. Clark, I would like to start with a question for you. 
In your testimony, you noted that some of the success that GWP 
has had after you acquired control, including serving as the 
DBE rail contractor for Chicago Transit Authority, can you 
please tell us about the differences your firm has experienced 
in pursuing projects with DBE programs, like FTA's, versus 
agencies that don't have the programs?
    Mr. Clark. Well, the agencies that don't have the program 
just don't give us any opportunity to work. I have been saying 
for a long time as an advocate that if they don't have to, they 
won't. They will not share anything. There are so many prime 
contractors now, OK, that we have good relationships with, that 
only call us when they have a project that requires some kind 
of goal to be met.
    So, other than that, we don't have that opportunity. Or if 
we do bid them--and sometimes we bid these contracts with 
private groups, OK, and agencies--they don't tell you where you 
stand in your bid. They just say who has won the job and they 
move on.
    So, we don't win those types of jobs. Actually, we are very 
seldom solicited. However, this week, something new happened--
last week, I am sorry--and we were actually sent a solicitation 
from Norfolk Southern, and we were knocked off our feet, OK, 
because we have been trying to get in to let them know what we 
do for the longest. And it was a minority business 
representative, and we were shocked because they never had 
anything like that before.
    So, I felt like what was going on, what is going on here 
today, and what has been pushed by the Congressional Black 
Caucus, is starting to make a difference. People are 
recognizing that they are going to have to accept this. And we 
can make a difference. We feel that we have made a difference 
as a small contractor in several States.
    Ms. Strickland. Thank you.
    I now want to turn to Mr. Canty. Sir, the examples of 
intimidation and blatant discrimination that you noted in your 
testimony is simply unconscionable. Could you talk more about 
the toll that takes on you as a contractor and business owner 
about what it takes to pursue action against these actions and 
how it affects your ability to compete?
    Mr. Canty. The toll it takes is--everybody on this Zoom, at 
the end of the day, we're not that different. We are all 
people. Right? We are all people. And the toll it takes on a 
person is indescribable. It is indescribable. It is the worst. 
I wouldn't wish this on anybody.
    We don't have time to get into it in totality, but the toll 
is indescribable. I mean, the toll it has on your families, the 
toll it has then on your ability to provide for your family, 
your ability to provide for your employees, is huge.
    So, there is a net ripple effect of bills that literally 
just can't get paid and net ripple effect of--and this is the 
reason I believe what was done to me was done was, as far as 
like [inaudible]--and I forgot to mention to you guys, I used 
to work for these guys as an employee for a joint venture. So, 
I knew them and they knew me. And I had the first mentor-
protege in the history of the United States DOT having served 
there with them. I think the reason why they do this is to make 
sure nobody else stands up, because their racism, it is 
profitable. It is profitable, so----
    Ms. Strickland. Thank you.
    And as we look at doing a DBE study, I also want to make 
sure that we are looking at both the carrot and stick. There 
must be enforcement and accountability.
    I yield back.
    Mr. Payne. The gentlewoman yields back, and she is 
absolutely correct.
    Next, we will have Mrs. Steel for 5 minutes.
    [Pause.]
    Mr. Payne. You are on mute.
    [Pause.]
    Mr. Payne. OK. Next, we will go to Mr. Johnson for 5 
minutes.
    Mr. Johnson of Georgia. Thank you, Mr. Chairman, for 
holding this very important hearing. And thank you to the 
witnesses for your time and your testimony.
    I have been a longstanding advocate of the DOT's 
Disadvantaged Business Enterprise program, which facilitates 
the success of women- and minority-owned businesses throughout 
the transportation sector. Unfortunately, however, there is no 
DBE program for Federal funds administered under the Federal 
Railroad Administration, the FRA, despite systemic 
discrimination based on race and sex that severely limits the 
economic prosperity of minority-owned businesses.
    Not only must Congress strengthen the existing DBE program 
under DOT, we must also establish a similar program under the 
FRA for the rail transportation industry. And this is crucial 
to mitigating inequality.
    Mr. Canty, your testimony asserts that discriminatory and 
unprofessional behavior by prime contractors has gone 
unpunished by Florida DOT, FDOT. And what is more, the FDOT has 
demonstrated a willingness to ignore discriminatory complaints 
altogether, allowing bad actors to receive additional funding.
    Your firm has engaged in work across the east coast and the 
South, including in my home State of Georgia. Based on your 
experience, how confident are you that the discriminatory 
experience you were subjected to is representative of that 
experienced by minority-owned firms across the country?
    Mr. Canty. I am very confident of it, because since my 
story has been told, I have had a plethora of folks send me 
information on it, including a picture of a noose on a job in 
LaGuardia by the same contractor, which I was blown away by, 
even with my experience of seeing what I have seen.
    So, it is absolutely representative. I think maybe the 
difference with me a little bit is I came up under these folks, 
so I was able to document in the way they were able to 
document, and that way it didn't just get swept under the rug.
    I am no tougher than any other man or woman or anybody 
here, but I mean--you know, you just can't give up. And no 
matter what, one day somebody will hear it. Some places in the 
country are worse than others.
    A lot of the reason nothing changes is that chain of 
custody from the State for them to really control it doesn't 
exist. Like in Florida, they really don't have any control over 
the prime, so----
    Mr. Johnson of Georgia. OK. Gotcha. Thank you.
    Mr. Ramanujam, your testimony indicates the challenges DBE 
businesses face due to current limitations in the program, such 
as how size standards for small businesses have not been 
adjusted for inflation. How does the lack of a uniform DBE size 
standard diminish a minority-owned prime contractor's ability 
to compete with non-DBE firms?
    Mr. Ramanujam. Thank you, sir. My testimony referred to the 
time when we actually lost our DBE status earlier. And it has 
since been adjusted, but it needs to be adjusted some more.
    To answer your question, the value of the dollar is not as 
much as it was before. We all know that, whether it is a gallon 
of milk or a gallon of gas. The projects that are coming out 
are much larger. And with the recent--and I thank all of you 
Members here for passing the infrastructure stimulus.
    With the recent infrastructure stimulus, the projects are 
much, much larger. The size standards are not amenable or 
favorable for a small firm like ours to even get anything as a 
prime. We are constantly having to depend being a sub, and once 
you are dependent on being a sub, your destiny is not in your 
hands.
    So, it is very real. It has a very limiting and a very 
negative impact on small businesses to not have the size 
standard pegged into inflation.
    Mr. Johnson of Georgia. All right. Thank you.
    Mr. Otero, I commend your leadership as a minority business 
owner for more than 30 years.
    How do you believe the existing DBE program can be 
strengthened to increase meaningful participation of businesses 
beyond subcontracting opportunities?
    Mr. Otero. Well, I think that what the program should also 
be focusing on is capacity building. All too often, we are 
given subcontracting an [inaudible] but it's just a point here, 
a point there, and that doesn't really help the small business 
in any way. There should be more of a mentoring relationship.
    But the agency has to be the one who drives this kind of 
philosophy that says, OK, you are going to have 10 or 5 
different subconsultants on this project, but what are their 
roles? That there is a meaningful role that that firm is going 
to provide that is going to help that firm grow its own 
capacity. Because if all you are doing is some menial type of 
task that is going to be what you are relegated to, all it is 
doing is satisfying the goal but not achieving the true spirit 
of what the program is intended for, which is have meaningful 
participation so that these firms are growing and are able to 
eventually survive on their own.
    Mr. Johnson of Georgia. Thank you, sir.
    And I yield back.
    Mr. Payne. The gentleman's time has expired.
    Next, we have Mr. Auchincloss for 5 minutes.
    Mr. Auchincloss. Thank you, Chair.
    This is a timely hearing to hold as, 3 days ago, the House 
passed, and the President signed into law, a historic 
investment in our Nation's infrastructure. The bipartisan 
infrastructure bill includes $66 billion for passenger and 
freight rail. Part of the bill's mission is to address the 
history of discrimination and how it has shaped our 
communities.
    The Disadvantaged Business Enterprise program was 
established under President Reagan, and yet four decades later, 
Federal contracting awards are still struggling to include 
smaller businesses that strengthen local economies and create 
good jobs. Notably, this designation does not currently exist 
within the FRA, the Federal Railroad Administration.
    As we make these news investments in rail made possible by 
BIF, especially the South Coast Rail in Massachusetts and 
potentially East-West Passenger Rail and North-South Rail Link 
as well, and further projects spurred by the passage of the 
infrastructure bill, we should not repeat the mistakes of the 
past.
    For Mr. Otero, you offered an idea in your testimony that 
the Disadvantaged Business Enterprise program should not only 
provide subcontracting opportunities, but should also foster 
capacity building for DBE firms by providing meaningful 
participation.
    Can you expand more on that idea? And would there be 
incentives to the mentoring entity or a post-mentorship 
evaluation for each participating company?
    Mr. Otero. In my experience, being in business for 32 years 
and being--I would say 80 percent of our work is as a 
subconsultant; 20 percent is prime. All too often, the prime 
thinks that by having 10, 15 subs on their proposal, that is 
the way to win. And they may win. But the problem is what work 
is being divvied out to those 15 subconsultants is menial. OK?
    What I try to talk to primes when they are giving me the 
opportunity to provide some input to how they are going to 
frame the team, I say, look at what are the scopes of services 
that you are going to sub out and give it to one or two firms 
and approach it that way, so that, at the end of the day, I 
know I am responsible for the following work, should we win.
    This way it is in my wheelhouse. I am using the staff and 
the capabilities that I have, and I am building that capacity 
and providing a meaningful service that I feel very capable of 
providing, so that it is a win-win situation all around.
    But a lot of times, the primes don't want to look at it 
that way. They just want to have the 15 window dressing of 
firms on the team, and what they wind up giving to them and how 
meaningful it is is not part of their philosophy in terms of 
diversity and inclusion.
    Mr. Auchincloss. That is helpful. I appreciate that 
insight.
    And then my final question for Ms. Malaszecki, you noted in 
your testimony that if the contracting arena becomes more 
tailored to support small women- and minority-owned businesses, 
like other agencies of Government, your business would 
certainly pursue additional contracts. What can the FTA and the 
FHWA do throughout these processes so that smaller businesses 
can equitably compete with the bigger entities?
    Ms. Malaszecki. Congressman, right now, I have been awarded 
two FTA contracts back to back 5 years as a prime contractor, 
nationwide contract for program management oversight. So, to 
answer that question as to the FTA, they are already doing it.
    It was a big learning curve. It starts with the procurement 
at the agency to assist someone like me to answer the 
questions. We have to do all the other work, but there is a lot 
of administrative background to be a Federal contractor.
    And the second time we went after the contract, it was 
competitive, and we are 1 of 5 small businesses out of 21 in 
the country that have this as a prime.
    What occurs, though--and many of the people speaking 
today--is it changes the game because the large prime 
contractors don't want me to be in that prime arena. They want 
me to stay where I am. And that is the piece that, with the DBE 
financial requirements and the different things that all of you 
have going on presently right now, is we are capable to get to 
that next level, but we are strapped by other different pieces, 
such as the financial capacity and our----
    Mr. Auchincloss. Thank you, ma'am. My time has expired I 
appreciate the answer.
    And I yield back.
    Mr. Payne. I thank the gentleman.
    Next, we will go to Mr. Garcia for 5 minutes.
    Mr. Garcia of Illinois. Thank you, Chairman Payne and 
Chairman DeFazio, for holding this very important hearing on 
whether discrimination exists in Federal passenger rail 
contracting.
    Congress recently passed historic infrastructure 
legislation that authorizes hundreds of billions of dollars in 
new infrastructure spending, including $66 billion for 
passenger and freight rail.
    As the U.S. Department of Transportation and State and 
local governments award contracts over the next few years to 
spend this historic amount of money, we must make sure that 
they include disadvantaged business enterprises in those 
contracts, especially Black-, Brown-, and women-owned 
businesses.
    I want to thank our brave witnesses here today for sharing 
their harrowing and painful stories of how they faced unjust 
discrimination as they sought to expand their contracting 
businesses. We must work in Congress to eliminate this 
insidious discrimination.
    A question for Mr. Melvin Clark. In your testimony, you 
mentioned how you established an office in Chicago and have 
worked successfully with the Chicago Transit Authority, most 
notably with respect to the rehabilitation of the Dan Ryan 
portion of the Red Line.
    Why have you had success in getting contracts from CTA? And 
what lessons can Congress take away from what CTA has 
implemented in terms of Disadvantaged Business Enterprise 
programs and goals?
    Mr. Clark. Well, one of the factors that I feel has made a 
difference for us is that we did something and were accepted by 
the minority community. When we came in to work on that 
project, as I told you, we went to the churches and the Urban 
League, and the city supported all of that. They saw people 
being hired and they saw a positive difference it made in the 
community.
    And so, we ended up becoming their contractor of choice, 
OK, because we were supported by more than just the fact that 
we can do the work, but that we were doing positive things. Our 
motto is to do well by doing good and----
    Mr. Garcia of Illinois. Local government made [inaudible].
    Mr. Clark. Hello? You are frozen.
    Hello?
    Mr. Payne. We are having a little bit of a technical 
difficulty here. We are going to see if we can get Mr. Garcia 
back up.
    Mr. Clark. OK.
    Mr. Payne. What we will do here is go to the gentleman from 
Louisiana, Mr. Carter, and we can come back to Mr. Garcia.
    [Pause.]
    Mr. Payne. Mr. Carter?
    [Pause.]
    Mr. Payne. We are having technical difficulties with 
everyone. Be patient with us for a second, please.
    [Pause.]
    Mr. Payne. We just ask the witnesses to be patient with us.
    [Pause.]
    Mr. Payne. Mr. Garcia? Mr. Garcia, can you hear me?
    Mr. Garcia of Illinois. Thank you so much, Mr. Chairman. I 
apologize, but I think we all had some technical issues. Yes, I 
can.
    Mr. Payne. OK. You can continue. You have about 3 minutes 
left.
    [Technical difficulties.]
    Mr. Payne. And it is not working.
    Mr. Clark. Hello, can you hear me now?
    Mr. Payne. Yes, we can hear you, sir, Mr. Clark.
    Mr. Clark. All right. Are we continuing or----
    Mr. Payne. Yes.
    Mr. Clark. OK. Well, he was talking about how the community 
and local government had embraced us, and I said yes, they 
have. In fact, when I was working on the fast-track program in 
Washington, they allowed me to come and recruit workers in 
Chicago, and we announced it on the radio. Some of the people 
and the deputy mayor were fully supportive of us. Actually, we 
brought buses to bring down workers to give them opportunities 
again that we had, that they didn't necessarily have in Chicago 
at the time. And those are the things that have endeared us to 
the community.
    And the prime contractors know now that G.W. Peoples makes 
a difference, and that CTA and the local government is very 
pleased with what we do and the way we do it, and so we are 
getting more opportunities.
    And we felt like it is not just low price that wins 
something, but it should be what difference are you making in a 
community when you have these kinds of opportunities.
    Mr. Payne. Thank you.
    Mr. Garcia?
    Mr. Garcia of Illinois. Yes. Can you hear me, Chairman?
    Mr. Payne. Yes, now we can.
    Mr. Garcia of Illinois. Chairman, can you hear me?
    Mr. Payne. Yes.
    Mr. Garcia of Illinois. Mr. Chairman? OK.
    Mr. Canty, you touched on the personal net wealth cap of 
$1.32 million and how the cap disadvantages DBEs. Can you 
expand on why the cap hurts the growth of DBEs and what you 
think Congress--if we should raise that cap?
    Mr. Canty. Yes, sir. Typically, when that cap comes into 
place where it is harmful is in the bonding program. And if you 
are living in an area, the majority of the area of the country, 
like the Northeast or Chicago or the west coast, your home is 
typically included in that equity, the value of your home--in 
the 8(a) program, it is not, but in the DOT programs, a lot of 
them they are and any retirement programs.
    So, if you have already been established, you have got to 
be very careful of not exceeding the cap. But in order to get 
the bonding you need, typically they are going to look at, if 
you want a $10 million bonding program, you have got to have $1 
million in the bank somewhere or you can't indemnify yourself; 
meaning, if it all goes wrong, you get to give up everything 
you have.
    So, perhaps there is a need for legislation where, for 
DBEs, you can either do jobs that don't require the same level 
of bonding or some kind of tweak to the bonding program, that 
could be where it is for DBEs specifically, or some change on 
the jobs where the jobs are actually self-insured anyway, the 
majority of them, and the DBE's bonding is covered by the 
prime's bond.
    Mr. Payne. Thank you very much.
    Mr. Garcia of Illinois. Thank you very much.
    Mr. Chairman, I yield back.
    Mr. Payne. The gentleman's time is expired.
    We are going to have Mr. Carter for 5 minutes.
    Mr. Carter of Louisiana. Mr. Chairman, thank you very much. 
I greatly appreciate the opportunity to address this 
significant issue.
    We know that DBEs historically have had a difficult time 
when cracking into the mainstream of doing business with 
majority firms and even with the Federal Government. We know 
that, currently, roughly 5 percent of Federal contracting 
dollars go to minority-owned businesses. So, that is something 
that we have to do a better job at. And I am very proud that 
this infrastructure bill establishes the Minority Business 
Development Agency within the Department of Commerce.
    So, to the panelists, I would ask that you gather as many 
of your experiences as possible and share them with us in 
writing so that we can--as this development of the Minority 
Business Development Agency is armed, we can begin by giving 
them all of the horror stories of things that you have 
experienced.
    I know that many times small businesses are choked when it 
comes to getting paid. The prime gets paid, and then the sub is 
choked for 90, 120 days and beyond, oftentimes making it next 
to impossible to run a business, because you need your 
resources; oftentimes to find that prime companies come in and 
then offer pennies on the dollar to close out a file where 
members of the minority community, minority businesses, women-
owned business have already expended resources.
    So, I would ask either of the panelists--or all of you, 
very briefly, because I have got a little bit of time, to share 
your experiences as it relates to the process of getting paid. 
Once a prime has been paid, oftentimes subs are left on the 
sideline waiting to be paid, oftentimes getting far less.
    Can anyone speak to that?
    Mr. Ramanujam. We have definitely--thank you, Congressman. 
We have definitely experienced that in terms of getting late 
payments. And as we speak right now, we have a really large 
national firm whose average AR days, that is the average number 
of days it takes them to pay us, is over 120 days.
    That goes to my second point in my testimony about the 
relationship and the difficulty of having a fair relationship 
with the bank, because we have to borrow. We have to borrow. 
And I have had to write off, or take less money on occasions, 
to take care of this. But it is a lot of stress. There is no 
cash flow, and I have----
    Mr. Carter of Louisiana. Absolutely. And I don't want to 
cut you off. I have got a little bit of time, but I agree. I 
appreciate that.
    I would like to hear from a few other panelists as well.
    Mr. Otero. I would like to address that as well.
    What we found is also sometimes the culprit is the agency 
itself. So, what we try to do is work with the agency to see if 
they can speed up the payment process internally, because that 
is what the prime is telling us, is that they haven't been 
paid, even though there is a prompt payment requirement in the 
contract. So, we talk to the agency also and make them aware of 
how much pain this causes us, and that sometimes sensitizes the 
agency to try to improve or monitor the invoicing cycle by the 
prime.
    Mr. Carter of Louisiana. But the issue that I am bringing 
forward is ones that I have heard a million times before. And 
while I acknowledge that the agency oftentimes could be the 
culprit, many times the culprit is the prime is paid and then 
withholds payment from the sub when you can least afford that.
    Mr. Clark, can you chime in for a brief second on that? And 
then I am going to ask--do it in 10 seconds because I have only 
got a little over a minute left.
    Mr. Clark. Yes, certainly. I think that there should be 
some legislation, regulations put in the DBE program where the 
minority business contractor, subcontractor, the small business 
normally, is paid within 30 days.
    Mr. Carter of Louisiana. A payment of some kind with the 
prime, right? When a prime is paid, they can pay you 
commensurate.
    Mr. Clark. Well, sometimes the prime is not paid because of 
their issues, and we as the small business are sitting around 
waiting. We are in that situation right now. OK? We had nothing 
to do with them not being paid. However, they are saying that 
we signed the same contract: ``paid when paid.'' That is what 
we are supposed to do. Well, I think--go ahead.
    Mr. Carter of Louisiana. Mr. Clark, I am sorry, I have got 
24 seconds, and it looks like Kenneth wants to jump in there 
real fast. Can you do it in about 5 seconds?
    Mr. Canty. I think the best way is to have 14-day pay terms 
just like the Small Business Act is used with the 8(a) program. 
And the prime should be required to pay, even if they haven't 
been paid within those 14 days, and they can carry the cost of 
that in their contract to the owner.
    Mr. Carter of Louisiana. In closing, what I would ask 
everyone to do is as I started: Cobble together as many of 
those experiences and give them to the committee in writing. 
Share with us your experiences. I mean, we have limited time to 
talk today. But as this development of the Minority Business 
Agency comes about, we want to be able to think about those 
problems that you had and address them in as thoughtful a way 
as possible.
    Does us no good to have a $1.2 trillion infrastructure bill 
if the people that are in the community that have been 
negatively impacted the most never have an opportunity to 
participate, to share your professional knowledge or skills, 
your wares.
    That is what we are here for, to make sure that we have 
equity in Federal Government contracting, but also to make sure 
that we create opportunities across the board.
    So I know I am out of time, Mr. Chairman. Thank you very 
much. I yield back.
    Mr. Payne. No, thank you. The gentleman's comments are well 
received.
    Next, I will ask Mrs. Steel if she has any questions for 
the witnesses.
    Mrs. Steel. Thank you, Mr. Chairman.
    Actually, I submitted written questions, so I think I am 
going to stay as-is, because they are almost the same as 
Congressman Doug LaMalfa, because I was quoting the L.A. Times 
and high-speed rail. So, I am just going to submit the written 
statements.
    Thank you, Mr. Chairman.
    Mr. Payne. OK. Thank you.
    That concludes our hearing today.
    And I would like to, again, thank each of the witnesses for 
their testimony today.
    I ask unanimous consent that the record of today's hearing 
remain open until such time as our witnesses have provided 
answers to any questions that may have been submitted to them 
in writing.
    I also ask unanimous consent that the record remain open 
for 15 days for any additional comments and information 
submitted by Members or witnesses to be included in the record 
of today's hearing.
    Without objection, so ordered.
    And the subcommittee stands adjourned.
    [Whereupon, at 12:47 p.m., the subcommittee was adjourned.]


                       Submissions for the Record

                              ----------                              

  Prepared Statement of Hon. Sam Graves, a Representative in Congress 
     from the State of Missouri, and Ranking Member, Committee on 
                   Transportation and Infrastructure
    Thank you, Chair Payne, and thank you to our witnesses for being 
here today.
    Thank you for calling today's hearing to examine the potential need 
for a Disadvantaged Business Enterprise, or DBE, program for passenger 
rail contracting.
    It has been roughly 40 years since Congress first created the DBE 
program, which was intended to help small businesses owned and 
controlled by those facing barriers in the transportation construction 
and airport concession industries.
    Congress has recognized the success of the DBE programs in the 
Department of Transportation by authorizing their continuation and 
making adjustments as needed.
    The Federal Railroad Administration is currently working on a 
disparity study that will inform Congress on the need to create a DBE 
program for passenger rail. I look forward to receiving the results of 
that study when it is complete.
    I look forward to hearing more from our witnesses on this subject.
    Thank you, Chair Payne. I yield back.

                                 
       Letter of November 22, 2021, from Laura C. Dutton, Former 
 Administrative Assistant, Atlantic Meridian Contracting Corp., Inc., 
         Submitted for the Record by Hon. Donald M. Payne, Jr.
                                                 November 22, 2021.
    To Whom It May Concern:
    I was employed by Atlantic Meridian Contracting Corp., Inc. (AMC), 
owned, by Mr. Kenneth Canty, from 10/14/2019 through 12/31/2020. I 
served as the Administrative and Accounting Assistant for the company 
and submitted billings on the company's behalf.
    Our biggest client during this period of time was Skanska 
Corporation. The project on which we were employed by Skanska was the 
New Pensacola Bridge. AMC was hired as a subcontractor to complete the 
demolition of the old bridge. I arranged for housing for our crew in 
Pensacola, I submitted Certified Payrolls weekly, and I submitted 
progress billings on the project.
    To the best of my recollection, Skanska rejected the majority of 
our billings, stating the billings were not accurate. Our company 
controller, Mr. Richard Ellis, made every effort to communicate with 
Skanska's accounts receivable department, the Skanska project managers, 
and other Skanska company representatives to try to get direction on 
how to correct the billings so that AMC could be paid. Each time we 
asked for clarification, Skanska would simply say we were not 
accomplishing the work for which we were billing.
    Likewise, our Certified Payroll reports were being rejected and, we 
felt, nitpicked. As soon as we corrected one issue, another issue would 
be found. For one particular date, there was a report from the Skanska 
project manager that two members of AMC's crew were interviewed. 
However, both those members were on personal leave and were not on the 
worksite day. We received a negative report for our payroll for that 
particular date because we had not reported hours worked for those two 
employees. It took several phone calls and emails back and forth to 
convince Skanska that their project manager was in error about the 
date. It certainly felt like harassment.
    I performed identical job duties previously for a white owned 
subcontractor, and my experience as a representative of that employer 
was quite different, virtually opposite as far as professional respect 
and open communication between contractor and subcontractor. My 
billings were almost never rejected and, if they were, the reason was 
clearly communicated with an opportunity to correct the issue. My 
experience with submitting Certified Payrolls on federally funded 
projects for a white owned subcontractor was also starkly different 
than when I worked for AMC. The payrolls were almost always accepted, 
and if there was ever an issue, it was due to a legitimate error on my 
part that I was given the opportunity to correct without undue scolding 
or threats of discontinuing the project.
    Mr. Canty was in constant contact with Skanska on every aspect of 
the Pensacola project, to include our progress billings. After several 
months of having our bills questioned and then rejected, Ken was told 
that Skanska had altered their Standard of Values (SOV). However, AMC 
was not allowed to alter our SOV to reflect what Skanska showed was the 
accurate picture of the costs of the project. An SOV is crucial to a 
contractor's being paid accurately for their work. It is the official 
itemized form on which billings are submitted. This was unacceptable 
and made it impossible for us to submit accurate billings. Not only was 
AMC's SOV different from Skanska's SOV; Mr. Canty also discovered that 
the specifics for the entire project were not presented to him 
accurately when he was awarded the job. This caused enormous cost 
overruns for an already expensive project for AMC. After months of 
rejected progress billings and no compensation from Skanska, AMC was no 
longer able to meet their financial obligations.
    Looking back on these events, there was no reason whatsoever for 
Skanska officials to behave so unprofessionally unless they were doing 
so deliberately to try to frustrate AMC's efforts. I believe it was 
March/April 2020 that AMC was sued by Skanska for failing to fulfill 
their contract, and AMC was terminated from the project. As you know, 
AMC has counter-sued, and Mr. Canty has filed a discrimination lawsuit 
as well. As a minority business owner, he has been subjected to the 
most egregious and blatant disrespect and unprofessional treatment 
imaginable. His employees were subjected to open racism and hostility 
on the jobsite in Pensacola. There were no repercussions for the 
offenders. Both in person and on paper, the discrimination was rampant 
throughout the project.
        Respectfully submitted,
                                           Laura C. Dutton,
    Former Administrative Assistant, Atlantic Meridian Contracting 
                                                        Corp., Inc.

Please allow my name above to serve as my signature.

                                 
   Letter from Richard J. Ellis, Jr., Controller, Atlantic Meridian 
  Contracting Corp., Inc., Submitted for the Record by Hon. Donald M. 
                               Payne, Jr.
    Honorable Donald M. Payne, Jr.,
    I am submitting this Letter Of Record on behalf of Mr. Kenneth 
Canty and his testimony of discrimination on the jobsite that Atlantic 
Meridian Contracting Corp was involved in.
    My name is Richard Joseph Ellis, Jr. I am a 66-year-old, Caucasian 
male. I am the Controller for AMC. I have worked in accounting for 46 
years for sole proprietors to corporations with multiple businesses and 
over 600 stores across the nation. My diversified experience over the 
46 years has given me insight into the various ways across the board 
that companies do business in paying their bills and in their day to 
day relationships with subcontractors and other AP vendors.
    What I have witnessed at AMC from SKANSKA I have never witnessed 
before. Their actions, which I will elaborate on further in the letter, 
show a distinct aggressiveness and intentional conflict to delay or 
avoid paying AMC at times when SKANSKA knew it was critical to get on 
time payment for labor and equipment which AMC had paid up front in 
order to provide the work that needed to get done.
    Over and over there were intentional challenges and avoidance 
openly to the point that it could only be because of Mr. Canty's race. 
It was so openly done to the point that they were not only being 
prejudiced but to the point of not trying to hide it because they acted 
like they thought they were immune to any action AMC would take to 
challenge them. To put it simply, it was like they were saying ``we are 
going to do this and there is nothing you can do about it''. I can't 
stress how much my disbelief was that they worked like this and that it 
was not just with the accounting dept, but seemed to be ingrained in 
the whole company attitude from other areas. ``We are the big boys on 
the block and we can do whatever we want.''
    I will start listing some examples of ways they intentionally hurt 
AMC which includes openly hiding site conditions they knew about that 
the Florida DOT provided them which they withheld from AMC, to delay 
tactics for payment and to actual onsite sabotage of working areas and 
conditions for our employees.
    A common delay practice they would use is to be nick picky about 
our Pay App. Each time it would be something and they would ask us to 
do this or that. Once I did and would resubmit, they would then tell us 
that the whole approval process had to start over and that our payment 
would now fall into a different pay period and we would have to wait 
another month. The corrections they would ask for were usually issues 
of presentation about how they wanted the Pay App, but that would 
change every time. They would constantly delay and keep pushing our 
payments back.
    On our final payment which was never paid, I talked to their 
Controller 3 or 4 times about when we would be paid. He would give me 
an actual date that the pay run would be made. Then when time came 
there was not payment. Time and again he told me the payment would be a 
certain date. Of course, we are budgeting our AP and Payroll based on 
that and when they did not pay then we would be in a worse position 
because we had already committed to making our payments based on 
receiving those funds. This occurred at least 3 times where they 
directly told me the date of payment. On my last contact with them 
about getting this payment, the Controller simply replied to me that 
there was no payment scheduled for AMC nor would there be. This after a 
month of emails promising us payment, telling us a payment date and 
then not paying.
    These occurrences continually happened and I have NEVER seen such 
outright deception that they openly did almost like saying, we can do 
whatever we want, you are just some little DBE minority owned company 
and we will pay or not pay when we tell you. They blatantly and openly 
did this over and over to us and I am absolutely sure it was because of 
Mr. Canty's race and his knowledge of the work being much better than 
theirs to the point they wanted to show him, yes you might be smarter 
but we are bigger!!!
    I humbly submit this as my opinion that there was outright racism 
from this company.
                                     Richard J. Ellis, Jr.,
              Controller, Atlantic Meridian Contracting Corp., Inc.


                               Appendix

                              ----------                              


    Question from Hon. Donald M. Payne, Jr. to Gnanadesikan ``Ram'' 
     Ramanujam, P.E., President and Chief Executive Officer, Somat 
                           Engineering, Inc.

    Question 1. No business should have the door closed on them before 
they can prove that they deserve a seat at the table.
    If this behavior continues, what do you see as the long-term 
consequences to minority and women-owned businesses looking to make 
their way into the rail industry?
    Answer. The consequences to minority and women-owned businesses are 
many, and impact different aspects of their existence, sustenance and 
growth.
    Financial consequence: Minority business that invest money, time 
and resources in building their skill set to serve the rail industry 
will suffer two ways. First, they would have wasted their resources 
because there will be no work--kind of like getting a degree in basket 
weaving. Second, they would have spent time that could have otherwise 
been spent on other productive pursuits, and time is a resource that 
cannot be replenished. Some businesses will even have to close their 
doors. These business owners will never realize, or will lose, the 
fruits of investment of multiple years of hard work and sacrifice.
    Educational consequence: It is an established fact that minority 
businesses are the ones that provide meaningful employment to minority 
populations, with opportunities to advance and evolve professionally. 
If the current behavior continues, minority students will not pursue 
education related to rail industry, further narrowing opportunities for 
minority and women businesses.
    Innovation and business consequences: Transportation in the 21st 
century is no longer in silos. Multimodal projects are being planned 
and executed all over the United States, with rail, transit and road 
modes intersecting each other. The lack of rail industry opportunities 
will severely and adversely impact minority and women businesses 
compete effectively for such work, and develop innovative solutions. 
This will actually reduce their ability to compete even in their 
traditional markets of transit and road work, or be relegated to 
commodity aspects of such work.
    Perception consequences: ``Perception is Reality.'' The lack of 
opportunity, and experience, in rail work will leave minority/women 
businesses without the opportunity to acquire that skill set. This in 
turn will cause a perception that such businesses are unable, or 
uninterested, to acquire those skills and become a complete, full-
service business. Once such a perception takes root, minority and women 
businesses will be considered even less for any opportunity. This is a 
highly impactful consequence.
    Social consequences: Failure is crushing to a person's confidence. 
The failure of multiple efforts to penetrate the rail industry, or keep 
a business open and running, will send a strong message to younger, 
future minority and women entrepreneurs. That message is that they are 
not welcome, not considered capable and should not aspire. That is a 
disastrous consequence for multiple future generations.
    In 1947, Jackie Robinson showed us that black folk can play major 
league baseball. Today, the FRA has the opportunity to show that 
minority folk can play ball in the rail industry.

                                [all]