Acting Texas Comptroller Kelly Hancock has ordered an immediate freeze on all new and renewed certifications under the state’s Historically Underutilized Business (HUB) program, signaling a major shift in how Texas manages its minority and woman-owned business initiatives.
The announcement, sent to state agencies on Tuesday, pauses the certification process for businesses seeking to participate in state contracting through the HUB program. Companies already certified will remain eligible to compete for state work, and existing contracts will continue uninterrupted.
Hancock described the move as a precautionary step to ensure the program aligns with state and federal constitutional requirements, as well as recent directives from Gov. Greg Abbott. Executive Order GA-55, issued earlier this year, prohibits state agencies from using race or sex-based preferences when determining eligibility for government-funded benefits, including contracting opportunities.
“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. “Our office is committed to protecting taxpayer funds and ensuring that every Texas business has an equal opportunity to compete for government contracts. Today’s action reflects that commitment and reinforces Texas’ longstanding principles of fairness and accountability.”
The HUB program, created in the 1990s, was designed to increase state contracting opportunities for businesses at least 51% owned by women, minorities, and certain economically disadvantaged groups. In recent years, however, state and federal lawsuits have challenged the legality of government programs that consider race or gender as factors — particularly following landmark U.S. Supreme Court decisions limiting affirmative action policies in education.
The comptroller’s office said it will conduct a detailed review of the program’s administrative rules, especially in light of recent court rulings affecting broader diversity, equity, and inclusion (DEI) efforts nationwide. The review could result in adjustments to eligibility criteria, reporting requirements, or the complete restructuring of how the state measures diversity in procurement.
During the suspension, state agencies will continue to collect data on business participation in contracting, and companies may still register on the Centralized Master Bidders List, which allows them to compete for state contracts. The comptroller emphasized that competition for contracts remains open and that the freeze affects only the certification process.
No timeline was provided for the review’s completion, though the office indicated it would begin formal rulemaking in the coming months to ensure that state procurement procedures are “strictly race- and sex-neutral moving forward.”
It remains unclear how the suspension may affect small businesses that rely on HUB certification to improve visibility and competitiveness in state contracting. Advocacy groups and lawmakers are expected to respond as the review progresses, with some likely to argue the program remains necessary to prevent small and minority-owned businesses from being overshadowed by larger, more established contractors.
For now, state officials say the goal is clarity — and compliance.
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