HOUSTON, TX — In a move that affects general contractors and subcontractors engaged in public works construction projects, HUB participation targets and points will not be used as evaluation levers, and solicitations must reflect race‑ and sex‑neutral practices. On October 30, 2025, Acting Texas Comptroller Kelly Hancock announced the suspension of the issuance and renewal of Historically Underutilized Business (HUB) certifications and announced a comprehensive review of HUB rules and administrative procedures to ensure “immediate compliance with the U.S. Constitution, Texas Constitution and Gov. Greg Abbott’s Executive Order GA-55.”
The Comptroller’s guidance reiterates that state agencies and institutions of higher education may not consider race, ethnicity, or sex in the award of contracts. While existing contracts remain unaffected, the change is immediate for solicitations and evaluations going forward. agencies may not award points in an evaluation, including through a HUB designation, based on the race, ethnicity or sex of the vendor. In the case of a tie bid, the contractor must be selected in accordance with the order of preference listed in the Texas Procurement and Contract Management Guide. The Comptroller will continue collecting business participation data and undertake rulemaking to adopt race‑ and sex‑neutral standards statewide.
General contractors should audit bid strategies, prequalification criteria, and subcontractor selection processes to remove any reliance on HUB certification or related preference points when proposing to state agencies or institutions. Where existing prime contracts reference HUB participation, evaluate contract language and compliance obligations, and seek guidance from the agency on expectations in light of the suspension and the prohibition of the HUB designation.
Subcontractors who have previously used HUB certification as part of their bidding strategy should pivot to focus on the non-HUB criteria in their bid packages. Keep meticulous records of bid submissions and selection communication to guard against disputes.
This change will increase the risk of bid protests and potential litigation where any party perceives a contract award was influenced by race‑ or sex‑based considerations. Robust documentation and comprehensive training are critical. Monitor forthcoming rulemaking and updated guidance from the Comptroller to refine policies and templates. In the interim, align all procurement and subcontracting practices to avoid HUB criteria and prepare for heightened public scrutiny of procurement files.
For further information on these developments, please contact Kevin Murphy or Bill Erwin.
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