Explain this like I'm 5 please.

ts5641 said:

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Explain this like I'm 5 please.

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From grok

### What Was the HUB Program? (Like a Special Club for Fair Sharing)

Imagine Texas is a big playground where the grown-ups (the government) buy lots of toys and gameslike computers, buildings, or even food for schools. They spend a ton of money on these things, and they want to share the jobs of selling them fairly.

A long time ago (in the 1990s), some smart people made a special club called the HUB program. HUB stood for "Historically Underutilized Business." It was like a helpful sticker that said, "Hey, let's give extra chances to sell toys to moms who run businesses, dads from different backgrounds (like Black, Hispanic, Asian, or Native American families), and brave soldiers who got hurt protecting us." This way, more kids from all kinds of families could grow up seeing their parents get a fair shot at big playground jobs. Over 15,000 businesses had this sticker!

### What Happened? (The Club Got a Big Change)

Right now, in December 2025, the boss of Texas money (called the Comptroller, a guy named Kelly Hancock) decided to mostly shut down the old club. He froze it in October (like pausing a game) and just changed it on December 2. Why? He says it's to make everything "super fair" without picking favorites based on if you're a girl or from a certain family backgroundthat's called ending "DEI" stuff (which means Diversity, Equity, and Inclusion, like making sure everyone feels included).

Now, the club is renamed VetHUB (Veteran Heroes United in Business). It's only for super-brave soldier heroes who got hurt bad (at least 20% disabled from their job protecting us) and started their own businesses. All the other stickers got taken away, so those moms and families from different backgrounds can't use the special help anymore for new jobs.

### Why Did They Do This? (A Little Grown-Up Fight)

Some people say it's good because it stops "picking sides" and follows big rules from the country's rule book (the Constitution) and a court decision about not using race or gender as shortcuts. There's even a lawsuit from a business that said, "Hey, that's not fair to us without the sticker!" Others, like some leaders in the playground, are mad and say the boss can't just change the rules aloneit's a law made by more grown-ups (the Legislature), and it helped lots of families get started.

### What Does It Mean? (The Playground Might Feel Different)

The playground might not be as colorful now, because fewer different families get the extra nudge to join in. But the soldier heroes still get their high-fives. Some folks worry it could make it harder for small businesses from underrepresented spots to win big toy-selling contests. We'll see if the big playground bosses vote to bring back the old rules or keep it this way!

texagbeliever said:

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AgBQ-00 said:

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so all of those "women owned" businesses that are actually husband owned and run and set up as the wife as the owner for the benefits no longer get the preferential treatment. this is a win.

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I've heard how many large companies basically used minority owned businesses as sleeves. All.the minority company served as was the middle man taking their cut for little to no actual work.

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Correct. Or they would be "suppliers" just taking a cut to pass through procurement

texagbeliever said:

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AgBQ-00 said:

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so all of those "women owned" businesses that are actually husband owned and run and set up as the wife as the owner for the benefits no longer get the preferential treatment. this is a win.

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I've heard how many large companies basically used minority owned businesses as sleeves. All.the minority company served as was the middle man taking their cut for little to no actual work.

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There are certification programs out there that actually do a lot of work to certify that the "woman owned" business is actually woman run as well. WEBNC is a good example of that. Whether you think that matters or not isn't relevant to me here, corporations do care and I've seen corporations lean more on that than on HUB which as already noted became a reason to make the inactive spouse the majority owner for reasons unrelated to how the business operates.

This is good because it gets the state out of the business of facilitating discrimination. Let that be a private venture.

texagbeliever said:

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AgBQ-00 said:

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so all of those "women owned" businesses that are actually husband owned and run and set up as the wife as the owner for the benefits no longer get the preferential treatment. this is a win.

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I've heard how many large companies basically used minority owned businesses as sleeves. All.the minority company served as was the middle man taking their cut for little to no actual work.

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I've seen, not just heard. HUB gets the contract and works the books to get enough of the revenue to meet the contract requirement. Big Corporate still benefits since HUB has no resources to actually complete the work.

This will be a boom for giant, out of state corporations who will swoop in and underbid local companies.

I suspect this will put a lot of small businesses out of business.

And no, I'm not defending the HUB system, just what I see happening.

I'm not arguing against shutting down such a program, but what authority does the comptroller have to arbitrarily pull the plug? The news story said it was a program created by the legislature, so I would assume they would need to be the ones to end it. In fact, you'd think the Texas lege would have ended it years ago.

Rapier108 said:

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This will be a boom for giant, out of state corporations who will swoop in and underbid local companies.

I suspect this will put a lot of small businesses out of business.

And no, I'm not defending the HUB system, just what I see happening.

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I could be wrong, but I also think they can't legally make this change, like this. So I expect lawsuits...

no more pass throughs

torrid said:

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I'm not arguing against shutting down such a program, but what authority does the comptroller have to arbitrarily pull the plug? The news story said it was a program created by the legislature, so I would assume they would need to be the ones to end it. In fact, you'd think the Texas lege would have ended it years ago.

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my assumption is for all state money bids that require HUB participation

Quote:

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Only disabled veterans will be certified going forward.

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Should get rid of that too

torrid said:

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I'm not arguing against shutting down such a program, but what authority does the comptroller have to arbitrarily pull the plug? The news story said it was a program created by the legislature, so I would assume they would need to be the ones to end it. In fact, you'd think the Texas lege would have ended it years ago.

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Unfortunately the lege made it worse with SB 1173.

AgBQ-00 said:

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so all of those "women owned" businesses that are actually husband owned and run and set up as the wife as the owner for the benefits no longer get the preferential treatment. this is a win.

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What about the guys who put businesses in wife's name then got divorced? Should be some sort of amnesty for them to take care of the ex-wife and get their bidness back.

Cities/counties may still be allowed (or try to get away with) to do this… looking at Austin, Houston, DFW.

The way to incentivize small businesses is removing administrative, legal, and regulatory hurdles which apply to them. Tilt portions of the game in their favor to offset the economies of scaled complexity which drastically favor large corporations.

Get Off My Lawn said:

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The way to incentivize small businesses is removing administrative, legal, and regulatory hurdles which apply to them. Tilt portions of the game in their favor to offset the economies of scaled complexity which drastically favor large corporations.

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Yeah, good luck with that.

I suspect this will actually have little impact to larger projects that rely on federal funds. For instance, our work is funded by federal money and the HUB requirements, section 3 requirements, etc typically must meet or exceed federal requirements.

Also, the requirements are almost always based on good-faith efforts that allow youn to meet the requirements by trying to hire HUBs and not finding adequate, suitable HUB businesses to meet the need.

It's all a game and none of it has resulted in HUB businesses benefiting. The only benefactors or the sham HUBs, kickbacks to the procurement officers, and lawyers who sue on behalf of the sham HUBs.

texagbeliever said:

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AgBQ-00 said:

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so all of those "women owned" businesses that are actually husband owned and run and set up as the wife as the owner for the benefits no longer get the preferential treatment. this is a win.

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I've heard how many large companies basically used minority owned businesses as sleeves. All.the minority company served as was the middle man taking their cut for little to no actual work.

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We do this all the time as a large professional services firm. We just sub contract through a minority owned business. This is done across many different states and federal entities.

Now eliminate the federal DBE (disadvantaged business enterprise) program, which is abused and bureaucratic on a much larger scale. The documentation and goal setting are what guarantees some federal employees a job whose sole purpose is to justify their employment.

ExPeterKeating said:

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Received an email today that the state Comptroller has ended HUB status for companies certified on owner's race or sex. Only disabled veterans will be certified going forward. This is a game changer for procurement and consulting.

https://www.texastribune.org/2025/12/02/texas-historically-underutilized-business-program-hub-women-minorities/

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It is about time. The whole HUB program has become a farce. A women or minority on the board would qualify a company as a HUB, so guess what companies did.

Anti marriage?!

AgBQ-00 said:

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so all of those "women owned" businesses that are actually husband owned and run and set up as the wife as the owner for the benefits no longer get the preferential treatment. this is a win.

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I smell a huge rash of divorces coming in Texas.

I hung up my small business valuation consulting practice a while back. It might be time to think about investing in some small business valuation adwords focused on divorce.

Those minority interest, illiquidity discounts are big, as are cuts to future forecasts due to changes in regulatory environments.

Tony Franklins Other Shoe said:

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texagbeliever said:

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AgBQ-00 said:

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so all of those "women owned" businesses that are actually husband owned and run and set up as the wife as the owner for the benefits no longer get the preferential treatment. this is a win.

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I've heard how many large companies basically used minority owned businesses as sleeves. All.the minority company served as was the middle man taking their cut for little to no actual work.

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I've seen, not just heard. HUB gets the contract and works the books to get enough of the revenue to meet the contract requirement. Big Corporate still benefits since HUB has no resources to actually complete the work.

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Likewise. I'm in procurement and my company prioritizes HUB and companies with "green initiatives". We tried to onboard a local supplier recently, and we asked them to sign paperwork stating they would abide by certain green initiatives and "carbon" BS.

Supplier declined and said "we don't want your business that bad."

Ultimately, it wasn't because they were staunchly anti-environment or anything. They just knew stuff like that comes with reporting requirements, KPIs, etc. All which would require $$ and time, and they weren't up for that. And I can't blame them. I roll my eyes in my head every time I have to have a supplier meeting and ask them what they're doing to improve their "carbon footprint". (It's literally part of my yearly assessment.)

I had a family member that worked for TPWD for decades. They used to be forced to use HUB "suppliers" for all kinds of materials and supplies they would need for a project. They would go find the product they wanted, usually via a place like Amazon, Home Depot, Walmart, etc. and send the listing in to be purchased from a HUB. Usually the price was 1.5-2x the price they could have gotten it from the retail outlet they found it on, and usually when it came from the HUB, it was shipped directly from that retail outlet. So the HUB program was really just a 50-100+% markup on anything they wanted to buy with the HUB doing nothing more than placing the order for them with Walmart, Home Depot, etc. to earn it.

The majority of "businesses " that will no longer exist should never existed to begin with.

At A&M the inevitable email reminder from our accounting dept a couple of months before the end of the fiscal year reminding us we are behind on our HUB quota for the year....so as we spend down our budgeted money so we don't lose it, make sure you use HUBs from now until the end of the fiscal year.

After SCOTUS gets done gutting the VRA, they need to declare are programs of preferential treatment based on race, color, creed or gender to be unconstitutional. Discrimination is discrimination.

This move in Texas likely has little impact on this area.