Billions On The Line: Texas Suspends DEI Program That Excluded White Males

A Texas GOP official has suspended a statewide program that prioritized non-white male businesses in state contracting. 

Acting Texas Comptroller Kelly Hancock took action this week to suspend new approvals for companies to be certified as a Historically Underutilized Business, giving them benefits in competing for state jobs. Hancock said that the program was constitutionally questionable because of its emphasis on race. 

“In Texas, we don’t want to discriminate against anybody, and what this program does is literally discriminate against those that are white,” Hancock told The Daily Wire. “It’s just been around for a long time, and we’ve just kind of accepted it and not looked at the constitutionality of it.”

To be defined as a Historically Underutilized Business, the company must be more than 50% owned by black Americans, Hispanic Americans, Asian Pacific Americans, Native Americans, service-disabled veterans, or women. The program has been in place since 1991. Hancock explained the requirements as “unless you’re white, you qualify.” 

Advantages of being classified as a Historically Underutilized Business include opportunities to bid for contracts from around 300 state agencies that must make a “good faith” effort to reach out to them. 

For example, the Texas Department of Agriculture has set goals that aim for it to use so-called underutilized businesses for 11.2% of heavy construction jobs, 21.1% of building construction, 32.9% of special trade construction, 23.7% of professional service contracts, 26.6% of other service contracts, and 21.1% of commodities contracts. 

Currently, about 21% of Historically Underutilized Businesses participate in state contracts as prime contractors or subcontractors, receiving 11% of all state spending in total, according to the comptroller’s office. The total awards given to the businesses are over $4 billion, including $1.45 billion for women-owned businesses and $1.6 billion for Hispanic-owned businesses. 

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Hancock said that he was concerned about the process of verifying that one had experienced economic discrimination. 

“How do we audit that somebody was economically discriminated against?” he asked. “How do we verify the information of somebody being economically discriminated against? It’s got to be more than just skin color.”

He said that contracts should be awarded on the basis of merit, not race or ethnicity. 

The suspension of the program comes after Governor Greg Abbott issued an executive order prohibiting race and sex-based preferences when awarding government benefits.