AUSTIN (Nexstar) — The Texas Comptroller of Public Accounts recently removed information from its website about the Historically Underutilized Business (HUB) program — which provides exposure to minority-owned and women-owned businesses in the government procurement process — to conduct a “legal review of the program’s administration and rules,” according to an agency spokesperson.
One of the architects of the decades-old program, state Sen. Royce West, D-Dallas, confirmed with Nexstar that a lawsuit against the state led to the decision to remove information about HUB from the agency’s website.
“There are people who clearly don’t want to see a HUB program in the state of Texas,” West explained. A spokesperson for the comptroller’s office said the agency continues to assist Texans with “questions or needs related to state procurement.”
What is the HP program?
The HUB program began in Texas in the 1990s and was codified by the state legislature in 1999. West co-authored the bill that legally created the program to ensure minorities and women were included in the mix to be government contractors. At the time the program began, West said minority business owners were never considered.
“We always talk about making sure we continue to have a strong business economy. That includes everyone,” West said. The program covers businesses in a range of services from heavy construction work to the provision of landscaping and promotional materials.
The program allows the Texas Comptroller to certify a business as a mall if a majority of the ownership is controlled by economically disadvantaged people. Government code An economically disadvantaged person is defined as someone who belongs to these groups:
- Black Americans
- Hispanic Americans
- slim
- Asian and Pacific Americans
- Native Americans
- Veterans who have at least a 20% service-connected disability.
The program not only identified centers, but also established requirements for state agencies when putting contracts out for bid. For any non-IT item valued between $10,000 and $25,000, the agency must solicit at least three bids from List of main bidders centraland two of them must be hubs.
For all types of contracts worth more than $100,000, agencies must “consider whether potential subcontracting opportunities exist and, if so, require a HUB subcontracting plan for vendor responses,” according to the Texas comptroller.
The State of Texas has established statewide HUB goals that it strives to achieve in the procurement and contracting process. The goals are based on a 2009 Texas disparity study, which was also removed from the comptroller’s website. Objectives include:
- 11.2% heavy construction other than building contracts
- 21.1% Building construction, including general contractor contracts and operational construction contracts
- 32.9% private commercial construction contracts
- 23.7% professional services contracts
- 26.0% other service contracts
- 21.1% commodity contracts
Who benefits from the HUB program?
Jancy Darling is the owner of Darling Promo, a promotional products company and authorized center in Texas. “Anything you can think of that has a logo, our company produces those products,” Darling explained.
The company started in 2007, and said it was difficult to get large contracts with state agencies for its services. She said the HUB program gave her a better opportunity to be considered for government contracts, but explained that her company still needed to put in the work to prove it was the best choice to be the vendor.
Your company must make the best financial offer to the state as well as provide the evidence and referrals you provide for the services the agency requests, Darling said. “It initially gave me the opportunity to get to know these government agencies that now know they can count on us,” Darling said of the HUB program.
Furthermore, Darling said she also attended several training courses offered by the HUB program which helped her manage her business better. She now holds official contracts with two government agencies, and if you ask her, she maintains that she earned those contracts through years of good service, not because it is a women-owned business.
“Just because we’re positioned doesn’t mean we get the job without merit,” Darling said.
HUB Program Critics
State Rep. Brian Harrison, R-Midlothian, has made it clear, from his social media to his comments on the House floor, that he is not a fan of diversity, equity and inclusion (DEI) policies in state government. Harrison calls the HUB DEI program on steroids.
“It is discrimination based on things like race, gender and ethnicity, in determining the award of multi-billion-dollar contracts,” Harrison explained.
He was happy to hear about the changes that had been made to the Comptroller’s website and hoped they would remain permanent. “It better be real,” Harrison said. “It better not just be optics of the appearance of change.”
He is not alone in his thinking. Earlier this year, Governor Greg Abbott issued an executive order directing state agencies to ban DEI policies. “We must always reject favoritism or discrimination based on race and allow people to advance based on talent and merit,” Abbott said in a press release.
Last November, a company called Aerospace Solutions has filed a lawsuit against Abbott and the Texas Comptroller’s Office. The non-HUB company alleged in its suit that because it did not qualify for the program, it was “at a significant disadvantage when bidding on government contracts.”
The company also alleges in the lawsuit that the HUB program violates the Equal Protection Clause not to discriminate on the basis of race.
West disagrees and says the HUB is a bona fide program. Eric McDaniel, a professor in the department of government at the University of Texas at Austin, said he sees the recent changes to the website as “part of a larger movement by the executive branch to limit what they consider to be DEI projects.”
Both West and McDaniel stress that the HUB program does not guarantee that the contract will be awarded to the minority company, but it does guarantee that the contract will be considered.
“Something like this is basically trying to make people aware of other businesses around that they can replicate,” McDaniel said.
Agencies are required to report whether they are meeting statewide HUB goals when they submit their budget request every two years. In the latest budget requestThe Texas Water Development Board (TWDB) reported that 12% of its expenditures in fiscal year 2023 were spent on HUB contracts. The agency fell short of the statewide target in three of the four HUB categories from which it is withdrawing.
In its explanation of why it fell 15.1% short of the professional services goal, the agency wrote that it “encourages HUB’s participation, but is required by law to award numerous engineering, accounting, and other professional services contracts based on qualifications and experience, improved, but fell short of the target.”
Harrison believes this number should be 0%.
What will happen next?
West said his office is working to find a copy of the recent lawsuit filed against the Texas Comptroller. He added that the Texas Attorney General’s Office, which typically defends the state in this case, is not part of the case. Instead, the comptroller hired outside counsel to file a lawsuit.
West added that he spoke with interim Comptroller Kelly Hancock about the recent developments, and said he was curious to see how the comptroller would react if the judge dismissed the case.