Texas law deprives businesses, unwisely spends taxpayer dollars

Texas’ Historically Underutilized Business program may be one reason for higher tuition at state supported universities. The 1995 HUB law requires state agencies to purchase up to 35 percent of goods and services from qualified businesses owned by women and minorities.

However, the cost of goods purchased from HUBs is often higher, and the program may actually be hurting those underutilized businesses.

For example, while working for another state agency, I learned about a practice that some big businesses use to access those HUB dollars. One of the dominant multi-billion dollar office supply companies in the United States used a small female owned business to route their sales, qualifying them as HUB sales. Most any item or service could be “run through” the HUB company.

The company then used their second-hand HUB status as leverage in contract negotiations.

In the end, the state agency paid more for items, sometimes more than twice what it previously cost from local small businesses.

This big business so dominated the purchasing that they arranged and attended all sales and contract meetings.

We never met with any representative from the HUB company.

While this HUB company was female owned, it appeared to be controlled by big business.

Apparently there are not that many genuine minority businesses and such arrangements between big business and HUBs may be common. At a disability support group meeting about five years ago, I heard members talking about companies looking for disabled people to set up with 51 percent ownership in a business.

It was not until a few years later that I understood what was going on.

When I looked into it further, I expected to blame “big business” Republicans for the law that established the HUB program, but Democrats controlled the legislature when this law passed.

While this may have been a noble effort by some lawmakers, the HUB system is now plagued with manipulative companies with absolutely no consideration for minorities.

Texas’ HUB law is a perfect example of what happens when government is dominated by political correctness and corruption.

By Dana Bell