Texas Just Overhauled Its Small Business Set-Aside Program — What Vendors Need to Know

Texas has run a small-business set-aside program for more than 30 years. In December 2025, the state's acting comptroller issued emergency rules that effectively ended it — and replaced it with a program serving a much smaller group.

Here's what happened, where things stand today, and what it means if you bid on Texas state contracts.

What Was the HUB Program?

HUB stands for Historically Underutilized Business. The Texas HUB program — run by the Comptroller of Public Accounts — certified businesses owned by women, minorities, people with disabilities, and service-disabled veterans. Certified businesses received preferential consideration on state contracts. State agencies were required to report how much of their spending went to HUB firms.

At its peak, the HUB directory listed more than 15,000 certified businesses across Texas.

What Changed in December 2025?

On December 2, 2025, Acting Texas Comptroller Kelly Hancock issued emergency rules that removed all eligibility categories from the HUB program — except one: service-disabled veterans.

The program was renamed VetHUB (Veteran Heroes United in Business). To qualify now, a business must be at least 51% owned, managed, and operated by a service-disabled veteran with at least a 20% service-connected disability rating, as defined by the federal military department.

The result: more than 15,000 businesses had their HUB certifications revoked. The VetHUB directory now lists approximately 485 certified businesses.

Is There a Court Challenge?

Yes. In March 2026, four minority- and women-owned businesses and a contractor trade association filed suit against the Comptroller, arguing the emergency rules exceeded his legal authority and violated the plain text of the HUB Act — a law that has been on the books for more than three decades.

A Travis County district court judge granted a temporary injunction blocking the rule changes. But the ruling is narrow — it only protects the six specific businesses that filed the lawsuit. It does not restore HUB certification for the broader pool of decertified vendors.

The Comptroller's office has appealed. A trial is scheduled for November 9, 2026. Until the courts resolve this, the VetHUB rules are in effect for everyone else.

What This Means If You Bid on Texas Contracts

If you were HUB certified (and are not a service-disabled veteran): Your certification has been revoked. You are no longer listed in the state's VetHUB directory. This affects your eligibility for set-aside consideration and your value as a subcontractor on contracts that include a VetHUB subcontracting plan requirement.

If you are a service-disabled veteran: You can apply for VetHUB certification through the Comptroller's Certification Portal at no cost. The application process is similar to the old HUB process.

If you were not HUB certified: The practical change for you is smaller. You can still register on the Centralized Master Bidders List (CMBL) — the main Texas vendor database — for an annual fee of $70. CMBL registration lets you receive bid notifications by commodity code and respond to state solicitations. (Note: Texas uses NIGP commodity codes, not NAICS codes, for portal matching.)

For existing contracts: Contracts in place before December 2, 2025 are not affected. State agencies are not required to modify or cancel those agreements.

Where Bids Are Still Posted

The portal hasn't changed. The Electronic State Business Daily (ESBD) — at txsmartbuy.gov/esbd — is still where Texas state agencies post solicitations over $25,000. You don't need an account to search it. To respond to a solicitation, you need to be registered on the CMBL.

The Bottom Line

For most small businesses that previously held HUB certification, the path into Texas state contracts just got narrower. Set-aside opportunities have shrunk dramatically. Subcontracting plan requirements that once directed work toward minority- and women-owned businesses now point to a VetHUB list of fewer than 500 firms statewide.

The legal case is ongoing. A November 2026 trial could restore broader eligibility — or confirm the current rules. Until then, decertified vendors should focus on strong CMBL registration, selecting the right NIGP codes, and building a proposal record that scores on merit.

Want to explore procurement contacts across all 50 states? BPC's free state directory lists procurement portals, agency contacts, and set-aside programs — including Texas — in one searchable place.

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