A staffing firm sued Texas Gov. Greg Abbott claiming the state’s program to use diverse suppliers is unfair to nondiverse firms, according to a court filing on Nov. 13.

Aerospace Solutions’ lawsuit focuses on Texas’ Historically Underutilized Business program. The suit claims the program steers a percentage of spend toward HUB firms to the disadvantage of non-HUB companies.

“In favoring some businesses over others based on the race of their owners, the HUB program violates the Equal Protection Clause’s demand that the government not discriminate on the basis of race,” the lawsuit stated. “Aerospace Solutions wants the freedom to succeed in Texas, including the ability to compete on a level playing field when bidding for state contracts.”

Aerospace Solutions is represented by Erin Wilcox of the nonprofit Pacific Legal Foundation. The Sacramento, California-based organization describes itself as a national public interest law firm that defends Americans from government overreach and abuse. In another recent case, it’s representing four freelance writers and editors who challenged Department of Labor rules for independent contractors.

In its announcement, the organization said the Aerospace Solutions suit targets racial set-asides. Texas’ HUB requirement creates a system where merit and value are less important than racial classifications, according to the organization.

“Courts have struck down similar programs nationwide for violating the Equal Protection Clause,” the organization wrote. “Moreover, these systems waste taxpayer money, breed corruption and push the false notion that certain racial groups need government preferences to succeed.”

Aerospace Solutions itself is based in Austin, Texas, according to court records. It provides staffing, engineering and technical publication services for the aerospace and technology industries.

The suit names as defendants both Abbott and Texas Comptroller of Public Accounts Glenn A. Hegar Jr.

Abbott’s office has been contacted for comment.

The Texas Comptroller of Public Accounts is not commenting on this pending litigation, Kevin Lyons, agency spokesperson, said in a note to SIA.

HUB

A historically underutilized business is one owned, operated or controlled by an economically disadvantaged person, which the lawsuit says refers to people who are Black, Hispanic, Asian Pacific, Native Americans, women or veterans.

Texas set up statewide HUB utilization goals for all state contracts, the lawsuit said. In addition, a HUB subcontracting plan is required for contracts of more than $100,000. If a bidder cannot comply with a HUB subcontracting plan, they must demonstrate a good faith effort that they did.

“Despite their extensive experience, Aerospace Solutions’ sister companies have struggled to find reliable HUB subcontractors when submitting bids for Texas state contracts,” according to the lawsuit. “The alternative, proving a good faith effort under 34 Tex. Admin. Code § 20.285(d)(1), is costly and time consuming, with no guarantee that a bidder’s good faith efforts will be accepted.”

The need for HUB subcontractors prompted Aerospace Solutions to forego bidding on a Texas Department of Transportation contract, the suit said. The contract required a 26% HUB utilization goal.

The Pacific Legal Foundation said in a note to SIA that it brought the lawsuit at this time because Aerospace Solutions approached it and wanted to challenge the HUB program. The program itself has existed since the early 1990s, the organization said, noting it’s never too late to challenge an unconstitutional law.

 In addition, the Pacific Legal Foundation said there are other states that concern the organization as well.

“New York State, for example, has a 30% minority/women business enterprise goal for public contracts, which amounted to about $3 billion dollars in the last fiscal year,” the organization said in an email to SIA. “It’s also worth noting that Texas’ HUB program impacts more than just state agencies and universities — Texas cities, counties and municipal agencies can also choose to give preferences to HUB certified businesses. Major examples are Harris County (which includes Houston) and Travis County (which includes Austin).”

Aerospace Solutions v. Abbott et all, US District Court for the Western District of Texas; 1:24-cv-01383