Four business owners and a trade association are suing Texas over changes to the Historically Underutilized Business (HUB) program, alleging the acting Comptroller overstepped his authority and deprived them of contracts.
Four business owners and a trade association sued the state of Texas on Monday, seeking to reverse acting Comptroller Kelly Hancock’s emergency rules altering a state program intended to give additional exposure to economically disadvantaged groups in government contracting.
During an afternoon news conference in Austin, the business owners said they are suing because they all lost out on government contracts after Hancock stripped their Historically Underutilized Business Program certification in December.“In this country, the legislature passes the laws, not the comptroller, and Texas is no different,” Alphonso David, president & CEO of the Global Black Economic Forum, and lead counsel for the plaintiffs, wrote in a statement. “The HUB case highlights a fundamental American principle — members of the executive branch cannot rewrite laws passed by the state legislature. They cannot deny citizens of their legal rights without a court order, legislative approval, or due process. “Acting Comptroller Hancock took a program created by statute and rewrote it without any legal authority. His actions are baseless and unlawful and must be reversed.” The plaintiffs are seeking a temporary injunction to block Hancock’s emergency rules, as well as reinstatement to the HUB program while the lawsuit plays out in a Travis County district court. They are ultimately seeking a court order to restore the program to its original form, arguing that Hancock overstepped his statutory authority, deprived them of state contracts without due process and violated the Texas Constitution. The plaintiffs include Houston-based general contractors Ipsum General Contractors, LLC and Houston Construction Services; Sugarland-based medical technology distributor Mpulse Healthcare & Technology LLC; Burleson-based restoration firm Williams Professional Water Restoration Service LLC; and the greater Houston chapter of the National Association of Minority Contractors, a nonprofit trade association that represents 155 minority- and women-owned contractors. Along with Hancock, the lawsuit also names Texas Department of Transportation Executive Director Marc Williams, Texas Health and Human Services Commission Executive Commissioner Stephanie Muth and Texas Facilities Commission Executive Director Will McKerall, whose departments all implemented Hancock’s changes to the HUB program. In a statement Monday, Hancock defended the changes to HUB by pointing to the 2023 U.S. Supreme Court decision that ended affirmative action in college admissions and a 2025 executive order by Gov. Greg Abbott that banned DEI policies in Texas agencies. “Every Texas business is equally eligible to compete for state contracts, regardless of race or gender,” Hancock wrote. “Through the Centralized Master Bidders List, the primary system agencies use to notify vendors of bidding opportunities, any qualified business can register and compete. Texas will continue expanding opportunity for small businesses across our state the right way — rooted in fairness, equal treatment, and the Constitution.” The program was created through bipartisan legislation during the 1990s, intended to give minority- and women-owned businesses a leg up when seeking state contracts. The program does not set quotas for the contracting of HUB-certified businesses, but sets goals that state agencies generally strive to meet. HUB businesses received 3,634 contracts totaling more than $4 billion in 2024, according to the Comptroller’s Office. Republicans filed several bills aimed at killing the HUB program entirely last year in the Legislature. They all died without making progress in either chamber.would not issue new or renewed certifications under the program while it was reviewed , pushing the program into the national battle over government initiatives perceived to be “diversity, equity and inclusion.” The Comptroller’s Office then cited emergency powers to restructure the program in December, removing all women and minority business and limiting eligibility to only service-disabled veteran business owners. “Businesses deserve a level playing field where government contracts are earned by performance and best value — not race or sex quotas,” Hancock, who is running in aThat change shrank the program from more than 15,000 participants to just under 500.that the change risked undercutting their business strategy and would hurt their bottom line. State Sen. Royce West, a Dallas Democrat who co-authored the 1999 bill that codified the program into state law, said the Legislature, not the comptroller, is empowered to change the program. “The Legislature voted. The answer was no,” West said. “The Comptroller doesn’t get to override that decision because he disagrees with it — that’s not his role under the Texas Constitution, and these business owners deserve to have that principle upheld in court.”Ruben Mercado Jr., founder of Ipsum General Contractors, said a contract he was drafting a $1 million bid for was withdrawn after Hancock restructured the program in December. Wendell Stamley, president of the National Association of Minority Contractors, said its members in Texas have seen government contracts canceled and work they were expecting be unexpectedly returned to competitive bidding.Some Northwest Side apartment residents spend 2 days without electricitySan Antonio blood donations needed after Austin mass shooting impacts inventoryWar in Middle East leaves San Antonio family trapped in IsraelHere's your best chance to see the total lunar eclipse on TuesdayGet ready for election day in Bexar County- What are the big races happening?Faith leaders finish 90-mile walk calling for release of children, parents in ICE custodyIranian ballistic missile attacks strike heart of Tel AvivHighlights from President Trump's speech at the Port of Corpus ChristiSan Antonio Mayor Gina Ortiz Jones censured in historic firstPresident Trump orders 'Hamburgers for all' at a Texas WhataburgerSan Antonio's Animal Care Services is trying to track down a cat with a jar stuck on its headSan Antonio's Animal Care Services is trying to track down a cat with a jar stuck on its headDennis Quaid greets the crowd at President Trump's rallyDrone 12 captures video of new multimillion-dollar retail development on Northwest Side▶Mayor Gina Ortiz Jones proposes new commission to increase voter turnout in San AntonioAvery Everett is in Corpus Christi ahead of President Donald Trump’s expected visit on FridayAvery Everett is in Corpus Christi ahead of President Donald Trump’s expected visit on FridaySeguin is one of the fastest-growing cities in the U.S1:01State Rep. 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