The North Carolina 2026 Appropriations Act has effectively abolished the Office of Historically Underutilized Businesses (HUB), ending a programme that provided training and procurement access to small businesses owned by women, people of colour and service‑disabled veterans.
What changed
The HUB office, part of the North Carolina Small Business Enterprise within the Department of Administration and created in 1999, was removed from the state budget when the Appropriations Act was signed in July 2026. The office had administered certification for qualifying firms and operated under a framework that included statutory procurement targets for state agencies.
The law eliminated both the office and the procurement benchmarks that required a percentage of state agency purchases be obtained from certified HUBs. Qualifying businesses were those in which at least 51% ownership was held by a woman, a minority or a service‑disabled veteran.
Immediate reaction and concerns
Community and business advocates said the change came as a surprise. Nicole Outlaw, assistant director of Chapel Hill‑based NCGrowth and founder of the Bertie Business Network, said the removal of the office
“certainly came as a surprise to me”and raised significant concerns about access to resources and growth opportunities for entrepreneurs.
Outlaw highlighted the role the HUB office played in helping businesses prepare to compete for state work through training, certification and networking support. With the office gone, advocates say there is a risk that many small, diverse firms will lose a direct route into state contracting and the structured support that accompanied certification.
- Office abolished: Office of Historically Underutilized Businesses removed from state budget effective immediately.
- Procurement targets removed: Statutory benchmarks for state agency purchases from HUBs eliminated.
- Who qualified: Businesses with at least 51% ownership by a woman, minority or service‑disabled veteran.
Background and role of the HUB office
The HUB framework dated back to Executive Order 150 and subsequent statutory measures enacted in 1999. The certification process and procurement goals were designed to give historically excluded entrepreneurs predictable access to state contracts, a source of steady revenue and scale for many small firms. The office also provided preparatory resources — from paperwork support to networking — meant to boost success rates when firms bid for public work.
| Year | Event |
|---|---|
| 1999 | HUB framework established under the Department of Administration |
| July 2026 | 2026 Appropriations Act signed; HUB office and procurement benchmarks eliminated |
Consequences for businesses and procurement
Removing a central office and its procurement targets has two immediate effects. First, it eliminates a dedicated source of training and certification assistance that helped diverse small businesses navigate public procurement processes. Second, without statutory procurement benchmarks, state agencies are under less obligation to direct a proportion of contracts to certified HUBs. That can reduce predictable contracting opportunities that some firms relied on to expand.
Advocates pointed to the lack of public discussion around the change at the time the budget passed, saying many of those most affected were caught off guard. Questions remain about where responsibility for certification and support will now sit, and whether any alternative mechanisms will be introduced to support diverse suppliers.
For small business owners who used HUB certification as a stepping stone to larger contracts, the removal of both the office and procurement goals could mean fewer opportunities to grow through state work. The long‑term impact will depend on whether the state creates replacement programmes or whether agencies adopt voluntary measures to seek out diverse suppliers.
The changes present a policy test: whether North Carolina will rely on market mechanisms alone to deliver inclusion in public contracting, or whether it will design new supports to replace the statutory framework that guided state procurements for nearly three decades.
WE NEWS does not provide financial advice.
