Red State Governor Ends Race-Based Contracting, Calls For Lawmakers To Make Move Permanent

Republican Governor Henry McMaster moved to end race-based government contracting in South Carolina and called for lawmakers to take action to codify his executive actions. 

McMaster signed an executive order on Wednesday calling for state agencies to stop awarding contracts based on race. Under current state law, each state agency is required to propose a budget that awards 10% of spending to minority-owned businesses. 

“Today, I have ordered state agencies to halt all future spending, procurement or contract decisions that are based on race. The state laws requiring these quotas and racial set-asides are unconstitutional and discriminatory. Business with state government should be awarded based on merit and value to the taxpayer,” McMaster wrote on X. “Senate President Alexander and House Speaker Smith have agreed to lead the effort to repeal these laws when the General Assembly returns next month.”

South Carolina’s Department of Transportation is also required to hand out a minimum of 5% of its awards for certain contracts to minority-owned businesses. 

In his executive order, McMaster said that the state laws mandating race-based contracting “call for unlawful racial discrimination” and that they are policies that “rest on the false assumption that the solution to perceived historical wrongs is to racially discriminate against individuals in the present.” 

McMaster also said that the policies may violate President Donald Trump’s executive actions taking aim at diversity, equity, and inclusion policies. 

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South Carolina Senate President Thomas Alexander and House Speaker Murrell Smith, both Republicans, said they would move in January to codify the governor’s actions. 

“We are a nation and a state dedicated to the principle that ‘all men are created equal, endowed by their Creator,’ as reflected in the Constitution’s requirement of equal protection of the laws,” Alexander said. “When existing laws no longer align with that constitutional command, it is our duty to correct them. I am confident my colleagues in the Senate share my belief that state government must reflect equality under the law in all its endeavors and ensure our statutes fully comply with the Constitution.”

South Carolina Congressman Ralph Norman praised McMaster’s action and called for the state legislature to pass a “full DEI ban.”

Amid Trump’s war on DEI at the federal level, some lawmakers have turned to the state level to challenge programs that favor minority businesses. In October, Texas suspended a statewide program that prioritized non-white male businesses in state contracting. 

This was done through the Historically Underutilized Businesses, which received about 11% of state spending total. 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.