How the Law To Prevent Discrimination and Encourage Minority Participation in Railroad Activities Is Being Implemented

CED-80-55: Published: Feb 1, 1980. Publicly Released: Feb 4, 1980.

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Under the Federal Railroad Administration's (FRA) regulations, recipients of federal financial assistance, and certain of their contractors and subcontractors, are required to take affirmative action to insure that minority persons and businesses have a fair opportunity to participate in employment and contractual opportunities resulting from the assistance. FRA organizations which administer the regulations are to: (1) review and approve recipients' affirmative action plans before financial assistance is granted, (2) monitor recipients' progress toward the goals established, and (3) investigate complaints. The Minority Business Resource Center (MBRC) was created under FRA to help assure that minority-owned businesses would be given the maximum practical opportunity to participate in business generated from public funds to the railroads by helping them to obtain contracts with the railroads.

Although FRA has initiated a number of corrective actions which should improve its implementation of the regulations, it has not adequately carried out its full responsibilities. GAO found that: (1) financial assistance was granted to recipients before their affirmative action plans (AAP's) were approved, and as of December 14, 1979, plans had not been approved for 10 States, Conrail, Amtrak, and the three major contractors working on the Northeast Corridor Improvement Project; (2) FRA has not systematically monitored recipients' progress; (3) two of the eight railroads receiving assistance have not submitted required reports on procurements from minority businesses; (4) additional efforts are needed to assure that claims are eligible; and (5) FRA policies and procedures relating to the goal for minority procurements and the requirement for recipients to monitor the progress of their contractors and subcontractors need to be clarified. While the number of minority contracts with the railroads has increased substantially, it is not possible to determine how much of the increase can be attributed to the activities of MBRC. A report prepared by an outside firm cited many problems which were inhibiting MBRC progress, but made many recommendations which the firm thought could increase MBRC progress.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Department of Transportation should monitor the compliance by FRA with its regulations to insure that assistance is not granted until the applicants' AAP's have been approved. FRA should direct MBRC to establish, and disseminate to all recipients, clear policies and procedures on: (1) the dollar base to which the minority procurement goal of 15 percent is supposed to be applied; and (2) what recipients and contractors are supposed to do to monitor the activities of their contractors and subcontractors.

    Agency Affected:


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