Big Changes to Texas HUB Certification: What Contractors Need to Know

If you’re a contractor doing business with Texas state agencies, universities, or other government entities, you need to understand the dramatic changes that just happened to the state’s contractor certification programs. In December 2025, Texas eliminated its decades-old Historically Underutilized Business (HUB) program and replaced it with a narrower program focused exclusively on service-disabled veterans.

These changes, announced by Acting Texas Comptroller Kelly Hancock, have left many small business owners scrambling to understand what’s next. Here’s a plain-English breakdown of what happened, why it happened, and how it might affect your projects.

What Was the Texas HUB Program?

The Texas HUB program was created in the 1990s to help small businesses owned by women, minorities, and service-disabled veterans compete for state contracts. The program’s stated goal was to promote equal contracting opportunities for small businesses owned by:

• Women (regardless of race or ethnicity)
• Minority groups (African Americans, Hispanic Americans, Asian-Pacific Americans, Native Americans, and Subcontinent Asian Americans)
• Service-disabled veterans (veterans with a service-connected disability)

How HUB Certification Worked

The HUB program didn’t guarantee contracts to certified businesses. Instead, it worked through a goal-setting and reporting system:

• State Agency Goals: Texas law required state agencies to make a “good faith effort” to award at least 11.2% of contract dollars to HUB-certified vendors in construction, 23.7% in other services, 26% in professional services, and 21.1% in commodities.
• Procurement Process: When state agencies issued requests for proposals (RFPs) or bids, they were required to actively seek participation from HUB-certified businesses, either as prime contractors or subcontractors.
• Reporting Requirements: Agencies had to document their outreach efforts and report on their success in meeting HUB participation goals.
• Competitive Advantage: While HUB certification didn’t guarantee winning bids, it provided certified businesses with increased visibility, networking opportunities, and preference when agencies were trying to meet their HUB goals.

The HUB Impact on Texas Contractors

By 2025, more than 15,000 businesses held HUB certification, representing a significant portion of small contractors, consultants, suppliers, and service providers doing business with the state. 

The program generated billions of dollars in state contracting opportunities for small businesses over its 30+ year history.

What Changes Were Made to the HUB Program in 2025?

In October 2025, the Comptroller’s office froze the HUB program, citing concerns about its compliance with state and federal constitutions, particularly regarding race and gender-based classifications.

On December 2, 2025, the program was officially restructured and renamed Veteran Heroes United in Business (VetHUB). The revamped program now focuses exclusively on small businesses owned by veterans with a 20% or higher service-connected disability.

What the New VetHUB Program Means

The restructured program represents a dramatic narrowing of eligibility:

• Businesses previously certified as HUBs based on race, ethnicity, or gender no longer qualify unless they meet the new veteran-focused criteria.
• Certifications for non-veteran-owned businesses are being revoked.
• The program’s scope has been significantly reduced, affecting over 15,000 businesses that were previously certified.

Who Now Qualifies:

• Business must be at least 51% owned by one or more service-disabled veterans
• The veteran owner(s) must have a service-connected disability rating of 20% or higher from the VA
• The business must be certified as a small business under applicable size standards
• The veteran owner must control the management and daily operations of the business

The Numbers: Impact on Certified Businesses

The scope of this change is massive:

• Over 15,000 businesses previously held HUB certification
• Estimates suggest only 1,000-2,000 businesses may qualify for the new VetHUB program
• This represents an 85-90% reduction in the number of certified businesses
• Thousands of women-owned and minority-owned businesses lost their certification overnight

Why Did Texas Change the HUB Program?

The Comptroller’s office stated that the changes were necessary to align the program with constitutional requirements and Governor Greg Abbott’s executive order banning diversity, equity, and inclusion (DEI) initiatives in state agencies. The goal, according to Hancock, is to ensure state contracting is free from race or gender-based preferences.

What Do The Texas HUB Changes Mean for Contractors?

1. If You’re a Service-Disabled Veteran-Owned Business: This could be a big opportunity. The new VetHUB program is designed to cut red tape and prioritize your participation in state contracts.
2. If You’re a Former HUB-Certified Business (Non-Veteran): Losing your certification doesn’t mean you’re out of the game, but you’ll need to adjust your strategy. Many businesses used their HUB status as a marketing tool to win contracts. Without it, you’ll need to focus on other ways to stand out, such as competitive pricing, strong relationships, and showcasing your expertise.
3. Existing Contracts Are Safe: If you currently have a state contract–whether you’re the prime contractor or a subcontractor– that contract will be honored until it expires. However, renewing or securing new contracts may be more challenging without HUB certification.
4. Increased Competition: With the program’s focus narrowed to service-disabled veteran-owned businesses, what happens to the contracting opportunities that previously went to HUB businesses? It’s likely that:
   1. Some contracts will go to the smaller pool of VetHUB-certified businesses
   2. Some will be won by larger, non-certified firms that previously faced HUB competition
   3. Smaller businesses without certification may face tougher competition from larger firms
   4. Agencies may adjust their procurement strategies, potentially breaking large projects into smaller pieces to increase competition

What Should You Do Next?

For Service-Disabled Veteran-Owned Businesses

1. Visit the Texas Comptroller’s VetHUB webpage and review eligibility requirements
2. Gather all required documentation (DD-214, VA rating letter, business documents)
3. Begin the VetHUB certification application process
4. Update your company website and marketing materials to mention your pending certification

For Former HUB-Certified Businesses

• Review Your Certification Status: If you’re unsure whether you still qualify under the new rules, check the Comptroller’s website for details on VetHUB eligibility.
• Review Your Current Contracts and pipeline to assess immediate impact
• Research Alternative Certification Programs (federal, local government, private sector)

• WOSB/EDWOSB (Women-Owned Small Business) for federal contracts
• 8(a) Business Development Program for socially and economically disadvantaged business owners
• HUBZone certification if your business is in a qualified area
• Update your marketing materials to remove references to HUB certification

• Adapt Your Marketing Strategy: Highlight your unique value proposition and build relationships with procurement officers to stay competitive.
• Stay Informed: Keep an eye on updates from the Comptroller’s office and consider attending seminars or workshops to learn more about navigating the new landscape.

Final Thoughts

Change is never easy, especially when it impacts your livelihood. While the new VetHUB program aims to support service-disabled veterans, it leaves many small businesses searching for new ways to thrive. By staying informed and proactive, contractors can navigate these changes and continue to succeed in Texas’ competitive market.

If you need legal guidance on government contracting issues, contract disputes, or protecting your business as you navigate these changes, The Cromeens Law Firm specializes in construction law and contractor representation. We work with contractors throughout Texas and understand the unique challenges you face. Contact us to learn how we can help protect your business. 

FAQs

Can I still bid on Texas state contracts without VetHUB certification?

Yes. VetHUB certification is not required to bid on Texas state contracts. You can still submit bids as a non-certified business. However, you’ll lose the competitive advantage that certification previously provided, and you may face increased competition from larger firms. Focus on competitive pricing, strong past performance, and building relationships with procurement officers.

If I’m a veteran but don’t have a 20% disability rating, can I still get certified?

No. The new VetHUB program requires a minimum service-connected disability rating of 20% from the Department of Veterans Affairs. Simply being a veteran is not sufficient. However, you may qualify for federal VOSB (Veteran-Owned Small Business) certification, which doesn’t require a disability rating and can help you compete for federal contracts.

Will Texas create new programs for women-owned or minority-owned businesses?

Currently, there are no announcements about creating replacement programs for women-owned or minority-owned businesses. The Comptroller’s stated position is that such programs raise constitutional concerns. However, future legislative sessions could create new programs, and individual state agencies might develop other initiatives. Additionally, many Texas cities and counties maintain their own M/WBE programs independent of the state.

What happens to my existing HUB certification documentation and history?

Your previous HUB certification is part of your business history and past performance record. While you can’t claim current HUB certification, you can reference your past certification and the successful projects you completed as a HUB-certified business when marketing your company and submitting proposals. Keep all documentation related to your HUB certification for your records.

How can I find VetHUB-certified subcontractors for my state project bids?

The Texas Comptroller’s office maintains a searchable database of VetHUB-certified businesses through the Centralized Master Bidders List (CMBL) at comptroller.texas.gov. You can search by industry, location, and certification status. Additionally, attend vendor matchmaking events hosted by state agencies, and network through veteran business organizations like the Texas Veterans Business Alliance.

Could this program be changed back or expanded in the future?

It’s possible. The Texas Legislature meets in odd-numbered years and could pass new legislation modifying VetHUB, creating additional programs, or even restoring elements of the old HUB program. Legal challenges could also result in changes. Additionally, changes in state leadership or federal mandates could influence the program’s future. Stay informed about legislative developments and policy changes.