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Texas has suspended its long-standing program designed to help businesses owned by minorities and women secure state contracts. The office of Acting Comptroller Kelly Hancock announced the immediate suspension of new certifications for the Historically Underutilized Business (HUB) program, citing the need for a thorough legal review of its administration and rules.
The Comptroller's office clarified that while it will no longer accept new applications, current HUB certifications will remain valid. The program was established to provide greater exposure to businesses owned by women, minority groups, and service-disabled veterans in the state's procurement process. In fiscal year 2024, Texas spent $5.6 billion with HUB-certified firms, which accounted for approximately 16.5% of total state expenditures, according to state data.
In a statement, Hancock emphasized the goal of ensuring fairness in state contracting. "Businesses deserve a level playing field where government contracts are earned by performance," he stated, reinforcing that his office is committed to a system where price and value are the primary determinants in procurement. The move comes amid a broader national and state-level re-evaluation of diversity, equity, and inclusion (DEI) programs, following legal challenges in other jurisdictions.
The decision has drawn criticism from civil rights organizations and some lawmakers, who argue that the suspension could roll back decades of progress in promoting economic equity. They express concern that without the program's support, many small and minority-owned enterprises will struggle to compete for lucrative state contracts. The legal review was prompted by a desire to ensure the program's compliance with current legal standards regarding race- and gender-based classifications.
Advocates for the program maintain that it has been crucial for leveling a playing field that has historically favored larger, more established companies. As the state conducts its legal assessment, the future of how Texas engages with its diverse business community hangs in the balance.
