{"id":92522,"date":"2025-12-18T06:37:06","date_gmt":"2025-12-18T06:37:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-tx\/92522\/"},"modified":"2025-12-18T06:37:06","modified_gmt":"2025-12-18T06:37:06","slug":"business-owners-search-for-solutions-after-termination-of-hub-program-the-austin-chronicle","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-tx\/92522\/","title":{"rendered":"Business Owners Search for Solutions After Termination of HUB Program \u2022 The Austin Chronicle"},"content":{"rendered":"

As the year comes to a close, Jessica Scanlon, founder of Hot Dog Marketing, can already cross one item off of her 2026 to-do list: renewing her Historically Underutilized Business program status. After Comptroller Kelly Hancock abruptly announced<\/a> in early December that the program would no longer provide benefits to women- and minority-owned businesses, business owners and local advocates have raised concerns, unaware of how they are going to move forward.<\/p>\n

The HUB program was initially designed to uplift businesses owned by marginalized communities and has now been altered to exclusively support veterans. Hancock announced that the program has been narrowed to strictly support veterans with an impairment connected to their service, and will be renamed the Veteran Heroes United in Business program. Only 31% of veterans in the nation have a service-connected disability, according to the U.S. Bureau of Labor Statistics<\/a>.<\/p>\n

Over 15,000 Texas businesses have now had their status revoked. According to the comptroller\u2019s fiscal year 2025 semi-annual report<\/a>, which was released in May, of the 15,762 companies that were registered under the program in FY25, a mere 485 are owned by disabled veterans. Of those 485, none are owned by female vets.<\/p>\n

Since 1999, the HUB program has served as a gateway for small businesses to play a role in substantial state-funded projects that are usually executed by larger, out-of-state companies. Through the HUB directory<\/a> on the comptroller\u2019s website, prime contractors can find Texas businesses that specialize in certain areas needed to complete their projects. For contracts greater than $100,000, prime contractors are required to submit a HUB subcontracting plan<\/a> that demonstrates that they have made a \u201cgood-faith effort\u201d to incorporate small businesses in the project.<\/p>\n

\u201cI\u2019ve been kind of telling people the HUB program is not a DEI program; it\u2019s a small-business accelerator program,\u201d Scanlon said.<\/p>\n

Scanlon\u2019s marketing company had seen the benefits that HUB status can provide for almost 10 years before the changes were made. It was a devastating blow when she received word that the program was no longer intact. \u201cI wanted to crawl out of my skin,\u201d she said.<\/p>\n

With the discontinuation of the program, Scanlon and other small-business owners fear that bigger contractors that are not based in Texas will see no use in partnering with them.<\/p>\n

\u201cIt\u2019ll be a lot of large companies winning state deals again without small businesses getting any uplift,\u201d she said. \u201cI think we\u2019ll see a lot of state procurement money leaving the state because a lot of those companies aren\u2019t even based here.\u201d<\/p>\n

Ali Khataw, CEO and founder of Encotech Engineering Consultants, said he\u2019s already been turned down by a prime firm that he previously worked with now that his business no longer has HUB status. \u201cThe response from that multinational firm was, \u2018Ali, we don\u2019t really need you guys because we can do this all in-house, and now that there are no goals, we don\u2019t have to put you or any other HUB firm on the team,\u2019\u201d he said.<\/p>\n

Having held HUB status for nearly 20 years, Khataw said that his business has been able to grow through the program. Now, he is unsure how he and other subcontractors will be able to grow in the field.<\/p>\n

\u201cIf all these projects without HUB goals would now go to multinational firms, how will the small firms ever get a chance to grow into a position where they can become a prime firm one day?\u201d he asked.<\/p>\n

Khataw said that the change not only puts these businesses at a disadvantage, but also the Texans who fund these projects. \u201cIt\u2019s not fair for taxpayers to give work to all of these multinational firms that might have headquarters outside of Austin, and you have Austin-based businesses that are fully qualified, have been in business for years, and they get nothing out of those large projects,\u201d he said.<\/p>\n

Considering the decision came so suddenly, business owners are befuddled<\/a>, unsure how to navigate the changes and strategically move forward. This is no different for Scanlon. While she hasn\u2019t coordinated a plan for her specific business to move forward on landing state projects without the certification, she said that she is focused on organizing with other previous HUB businesses to try to combat the change.<\/p>\n

\u201cI think there\u2019s an opportunity for these businesses to have their voices heard and work together on trying to save some version of this program,\u201d Scanlon said.<\/p>\n

In speaking with other affected business owners, the early response has been encouraging for Scanlon. \u201cWhen I bring up the idea that we should all be getting together and figuring out what to do next, they get very excited about the idea of, at least, shouting from the rooftops that this was handled incorrectly,\u201d she said.<\/p>\n

While business owners are taking on the brunt of the change, they are not the only ones contesting the comptroller\u2019s decision to end the program. In the midst of the drama, and after the Supreme Court ruled to uphold the GOP congressional map, state Sen. Sarah Eckhardt switched from running in CD 10 and instead decided to enter the race for Texas comptroller<\/a>. In an official email explaining her move to the comptroller race, Eckhardt made it known that she plans on reviving the program. \u201cThe Comptroller can\u2019t just strike a law off the books,\u201d she wrote. \u201cIt\u2019s ILLEGAL. And in this case, it\u2019s outright stupid economics.\u201d<\/p>\n

This article appears in December 19 \u2022 2025<\/a>.<\/p>\n

A note to readers:\u00a0Bold and uncensored,\u00a0The Austin Chronicle\u00a0has been Austin\u2019s independent news source for over 40 years, expressing the community\u2019s political and environmental concerns and supporting its active cultural scene. Now more than ever, we need your support to continue supplying Austin with independent, free press. If real news is important to you, please consider making a donation of $5, $10 or whatever you can afford, to help keep our journalism on stands. <\/p>\n","protected":false},"excerpt":{"rendered":"As the year comes to a close, Jessica Scanlon, founder of Hot Dog Marketing, can already cross one…\n","protected":false},"author":2,"featured_media":92523,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[132,134,133,37314,6116,5621,16703,5622],"class_list":{"0":"post-92522","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-austin","8":"tag-austin","9":"tag-austin-headlines","10":"tag-austin-news","11":"tag-historically-underutilized-businesses","12":"tag-hub","13":"tag-kelly-hancock","14":"tag-sarah-eckhardt","15":"tag-texas-comptroller"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/92522","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=92522"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/92522\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/92523"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=92522"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=92522"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=92522"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}