Harris County Challenges Texas Comptroller's Rollback of Minority Business Program

Harris County threw its legal weight behind a lawsuit challenging Acting Texas Comptroller Kelly Hancock's overhaul of the state's Historically Underutilized Business program, warning that eliminating women- and minority-owned firms from state certification will shrink the county's bidder pool, drive up procurement costs, and drain local tax revenue.

The county filed an amicus brief on March 30 in the case now styled Ipsum General Contractors, LLC, et al. v. Kelly Hancock, et al., which was initiated March 2 by four minority- and women-owned Texas small businesses and the Greater Houston chapter of the National Association of Minority Contractors. Two of the lead plaintiffs, Ipsum General Contractors, LLC and Houston Construction Services, are Houston-based general contractors whose state HUB certifications have been effectively voided by Hancock's December 2025 emergency rules. Sugarland-based medical technology distributor Mpulse Healthcare and Technology LLC and a Burleson restoration firm, Williams Professional Water Restoration Service LLC, are also named plaintiffs.

The scale of the exclusion explains why Harris County moved quickly into the litigation. As of May 2025, there were 15,790 businesses certified under the HUB program statewide. Only 485 of them, roughly 3 percent, were owned by service-disabled veterans, the only category now eligible under Hancock's replacement program, Veteran Heroes United in Business, or VetHUB. The remaining 97 percent of previously certified firms lose their standing, including the general contractors, engineers, IT vendors, and professional services companies that routinely bid on Harris County projects.

The county's concern is rooted in its own procurement numbers. Before the Commissioners Court launched its Minority- and Women-Owned Business Enterprise program in November 2020, a disparity study by Colette Holt and Associates found that only 9 percent of Harris County contracting dollars went to M/WBEs, even though those firms represented 28 percent of the available market. The county set an aspirational goal of directing 30 percent of contract dollars to MWBEs and has more than doubled its certified spending since 2020. That benchmark depends directly on the state's HUB certification as its eligibility backbone. If the certification pipeline stays frozen, fewer firms qualify, bids narrow, and competition shrinks, which county officials say translates into higher costs and reduced tax investment in the Houston region.

Commissioner Adrian Garcia put the fiscal argument plainly: "The taxpayers will be the ones ultimately paying for it. When you eliminate minority and women-owned businesses from this program, you are shutting the door on entrepreneurs who are trying to grow their companies and create jobs."

Commissioner Rodney Ellis pressed the legal argument further: "Some want to re-rig the system and take us back to the way things used to be. We have suffered too long, fought too hard and made these changes, and we're not going back to the way things used to be."

The county's brief argues that Hancock, who holds an acting rather than confirmed title, bypassed the Texas Legislature when he restructured a program authorized under Texas Government Code Section 2161. Hancock froze all new and renewed HUB certifications on October 28, 2025, citing Governor Greg Abbott's Executive Order GA-55, then announced VetHUB emergency rules on December 2. He has defended the move as ending "DEI-based preferences in state contracting," and cited a pending equal-protection lawsuit by a non-HUB company, Aerospace Solutions, as partial justification. Critics note, however, that no state or federal court has ever ruled the HUB statute unconstitutional, making Hancock's pre-emptive elimination of the program the central legal flashpoint in Travis County court.