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The Texas Comptroller’s Office has suspended the state’s long-running Historically Underutilized Business (HUB) program, halting new and renewed certifications for minority-, women- and veteran-owned businesses while officials review its legality under recent court rulings and state policy.
Acting Comptroller Kelly Hancock announced the decision Monday, saying the agency will conduct an administrative and legal review of the program to ensure compliance with the Texas and U.S. constitutions. The review follows Gov. Greg Abbott’s January executive order banning diversity, equity and inclusion practices in state agencies.
“Texans deserve a level playing field where government contracts are earned by performance and best value — nothing more, nothing less,” Hancock said in a statement.
The HUB program, created in the 1990s under then-Gov. George W. Bush, was designed to help businesses owned by minorities, women and service-disabled veterans compete for state contracts. It did not guarantee contracts but gave certified firms access to procurement notices and vendor listings.
About 16,000 firms are currently certified under the HUB program, according to state data. In the first half of fiscal 2025, those companies accounted for roughly 11 percent of statewide expenditures — about $2 billion in state spending. Women-owned and Hispanic-owned businesses made up the largest share of HUB participants.
Existing certifications and contracts will remain valid, but the Comptroller’s Office will not process new or renewal applications until the review is complete. Officials have not said how long the suspension will last or whether the program could be permanently altered.
The move has drawn criticism from business and community leaders who say it could hurt small and minority-owned firms that depend on the certification to access state opportunities. Advocates in Houston, which has one of the largest concentrations of minority- and women-owned businesses in Texas, warned the decision could reduce competition and slow local economic growth.
Supporters of the freeze argue that government contracts should be awarded strictly on merit and cost-effectiveness, without considering race or gender.
The Comptroller’s Office said the review will examine the program’s administrative rules and may lead to new regulations designed to comply with constitutional limits on race- and sex-based criteria.
For now, minority and women-owned firms across Texas face uncertainty about how they will compete for billions in future state contracts — and whether the decades-old HUB program will ever return in its original form.