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Texas HUB Program Faces Legal Scrutiny and Overhaul

  //business-finance.news-articles.net/content/202 .. b-program-faces-legal-scrutiny-and-overhaul.html
  Published in Business and Finance on Sunday, February 15th 2026 at 15:34 GMT by Houston Public Media
      Locales: Texas, UNITED STATES

Austin, Texas - February 15th, 2026 - Texas' Historically Underutilized Business (HUB) program, a cornerstone of the state's efforts to promote equity in government contracting, is undergoing a period of significant transformation. While the program remains a crucial lifeline for minority and women-owned businesses, it faces ongoing legal scrutiny and necessitates a recalibration to align with recent court rulings. The program, designed to level the playing field and address decades of systemic exclusion, is now tasked with adapting to a legal landscape increasingly resistant to race and gender-based preferences.

For decades, the HUB program has mandated that state agencies, cities, counties, and other governmental bodies allocate a designated portion of contracts to certified HUBs - businesses owned by minorities, women, and veterans. The intent was clear: to counteract historical disadvantages and foster economic mobility within underrepresented communities. Adriana Cruz, President of the Texas Association of Black Owned Businesses, powerfully articulates the program's significance, stating, "This is more than just a business opportunity, this is about equity and economic mobility. For decades, these businesses have been systematically excluded and disadvantaged from participating in government contracting."

However, the very foundation of the program - its reliance on race and gender as qualifying factors - has repeatedly invited legal challenges. The most recent, and perhaps most impactful, came in June of 2026 when the Texas Supreme Court issued a ruling suggesting the program likely violates the state constitution's prohibition of racial preferences. This decision sent shockwaves through the business community and prompted a swift response from the Texas Procurement and Support Services Commission (TexProc), the agency responsible for administering the HUB program.

Kim Martinez, CEO of TexProc, acknowledged the gravity of the situation. "We are mindful of the court's decision and working to make the adjustments necessary," she said. "Our goal is to ensure this program can still provide the level of opportunity and inclusion that was originally intended." The adjustments, however, represent a fundamental shift in the program's approach.

TexProc is now prioritizing businesses owned by women, veterans, and individuals residing in economically disadvantaged rural areas. While still focused on supporting underrepresented groups, the program is moving away from explicitly race-based criteria, opting instead for factors considered more legally defensible. This pivot has sparked debate among stakeholders. Some argue that it adequately addresses historical inequities while complying with the law, while others fear it will dilute the program's original intent and reduce opportunities for minority-owned businesses who may not also meet the criteria for women, veteran, or rural location status.

Carolyn Williams, owner of a Dallas-based construction company, emphasizes the program's importance: "This program is critical for our continued growth and success." Her sentiment is echoed by countless other HUB owners who rely on the program to compete for contracts they might otherwise be unable to secure. The program provides not only access to capital but also valuable networking opportunities and mentorship programs, fostering a supportive ecosystem for growing businesses.

The shift in program guidelines isn't without its challenges. Certification processes are being re-evaluated, and agencies are grappling with how to best implement the new priorities. There are concerns about potential delays in awarding contracts and the need for increased transparency in the selection process. Critics also point to the potential for unintended consequences, such as incentivizing businesses to relocate to rural areas solely to qualify for HUB benefits.

The legal battles are far from over. Opponents of the program argue that any consideration of demographic factors constitutes unconstitutional discrimination, while proponents contend that affirmative measures are necessary to remedy past injustices. The future of the HUB program hinges on the outcome of these ongoing legal proceedings and TexProc's ability to navigate the complex legal and political landscape.

Despite the uncertainty, one thing remains clear: the need to support minority and women-owned businesses in Texas is paramount. The HUB program, even in its evolving form, represents a significant step toward creating a more inclusive and equitable economic environment. As TexProc continues to adapt, it must prioritize transparency, accountability, and a commitment to ensuring that the program truly serves its intended purpose - to provide genuine opportunity for all Texans.