Paula Mendoza started a procurement company in 2001 with $100. She says she’s never been handed a contract because she’s a female minority, but she got multiple opportunities to bid on projects through the statewide Historically Underutilized Business program.
Texas Comptroller Kelly Hancock killed the program in December 2025, and now a group of small business owners is suing him, saying he doesn’t have the legal authority to dismantle an initiative created by the Texas Legislature in 1999. Harris County Attorney Jonathan Fombonne announced last week that the county is joining the lawsuit.
“The case is actually not that complicated,” Fombonne said at an April 2 press conference. “An unelected statewide official has neither the authority to rewrite state law on his own nor the authority to decide the constitutionality of state law. There are only two ways the HUB program can be undone: by the Legislature, which created it in the first place, or the courts.”
The plaintiffs are asking for a court order to restore the HUB program to its original form, alleging that Hancock deprived them of state contracts without due process and violated the Texas Constitution. Hancock has defended his decision, pointing to a 2023 U.S. Supreme Court case that ended affirmative action in college admissions and a 2025 executive order by Gov. Greg Abbott that banned DEI policies in Texas agencies, the Texas Tribune reported last month.
Mendoza, who serves on the Houston ISD Board of Managers, said her company, Possible Missions — which specializes in laboratory, scientific and medical equipment — and other businesses were allowed the opportunity to compete for contracts because of the HUB program.
She’s not part of the lawsuit but appeared at last week’s press conference in Houston to speak on the matter because representatives from companies like Houston-based Ipsum General Contractors, Sugar Land’s Mpulse Healthcare & Technology and the greater Houston chapter of the National Association of Minority Contractors — which are listed as plaintiffs — can’t comment on active litigation.
“The HUB program is not and has never been a quota-driven set-aside program,” Mendoza said. “I was never awarded a contract because of the color of my skin, ethnicity or gender. The HUB certification did not give us contracts. Nothing was handed to us. We still had to bid for goods and services. We had to market our companies and many times had to prove above and beyond that we were just as qualified, if not better, than the larger companies. The only advantage I was afforded was the opportunity to compete.”
When the conversation turns to equity, bet that Harris County Commissioner Rodney Ellis will be involved. He knows all about the state’s HUB program because he helped create it while serving in the Texas Senate. A disparity study in the early 1990s showed that public entities were discriminating when awarding public contracts, Ellis said.
“We established HUB to try to help women and minority owned and veteran-owned businesses get a fair shot at doing their share of state business,” he said. “Those disparities that existed then still exist today but HUB has helped to level the playing field for so many businesses.”
Ellis said more than 15,000 Texas businesses are at risk of losing contracts because of Hancock’s actions.
“I don’t think any one official should be able to strip women- and minority-owned businesses from HUB eligibility by the stroke of a pen,” he said. “If they want to pass legislation to do it, go through that process and fight it out on the floor of the Texas Senate and the Texas House. Go through that process and see what happens.”
Hancock’s office is accepting public comments on the issue through April 12. In a December statement, the comptroller acknowledged he was removing Minority- and Women-owned Business Enterprise companies from eligibility and limiting the program to service-disabled veteran business owners, renaming it VetHUB.
Harris County Commissioner Adrian Garcia, who represents the area where one of the plaintiff businesses is based, said competition is good for the economy. As a Houston City Council member, he chaired a MWBE committee to ensure that small businesses could grow and there would be more competition for city contracts, he said.
“More competition means that the taxpayers are the winners, ultimately, because it forces everybody’s pencil to get a little sharper and their numbers to get a little tighter,” he said. “ What’s being done right now by someone who thinks they have the unilateral authority in the legislature to eliminate the HUB program is absolutely wrong and will hurt the business community and our economy.”
Fombonne said the Texas HUB program is lawful and established, and it’s been working. “This is not a new or experimental program,” he said. “It’s been implemented by Republican and Democratic officials. It’s supported thousands of Texas businesses over decades with no court rulings striking it down and no votes eliminating it.”
The county attorney added that the comptroller has created chaos by yanking opportunities away from small businesses. “His illegal action damages the stability of the county’s procurement system, impacts vendors who might be interested in our projects and hurts businesses and residents of this county that benefit from the investment, the workforce development and the revenues that come from our MWBEs.”
Ingrid Robinson, president and CEO of the Houston Minority Supplier Development Council, said her organization has partnered with the comptroller’s office for more than two decades to certify HUBs and ensure minority- and women-owned businesses have access to opportunities. She referenced a statistic from the comptroller’s office that HUB businesses received 3,634 contracts totaling more than $4 billion in 2024.
“Many of the businesses that were part of the program contact us daily, talking about the contracts that are at risk,” she said. “This new process is making it more difficult to get contracts renewed. This has put at risk over 4 billion, with a B, dollars that have been generated by historically underutilized businesses in Texas.”
Mendoza said she hopes the HUB program is restored, not just for her own sake but the thousands of businesses across Texas that are just looking for a chance to compete.
“I started my company because I wanted to give back to the community and demonstrate by example that in Texas, if you can dream it, you can achieve it,” she said. “I’m very proud of the successes of my company. However, without the HUB program, firms like mine will not flourish ever again.”
