Texas Aerospace Firm Challenges Minority Set-Asides In Court
Despite Constitutional guarantees of equal treatment under law, the state of Texas favors certain designated groups in contracting for services.
Aerospace Solutions is an aerospace staffing agency that has filed a federal lawsuit challenging Texas’ Historically Underutilized Business (HUB) program’s mandate that a certain percentage of state contracts are reserved for businesses owned by members of preferred minority groups. The firm is represented by the Pacific Legal Foundation, a nonprofit law firm.
Despite its proven expertise, Aerospace Solutions is unable to submit competitive bids for Texas Department of Transportation contracts, simply because the company does not meet the racial requirements for HUB certification, according to a release from the law firm. The program stipulates that at least 51% of a company must be owned by individuals from designated minority groups, viz: Black Americans, Hispanic Americans, Asian Pacific Americans, Native Americans, women, or service-disabled veterans. In order to bid on a contract, Aerospace Solutions would have to forfeit over a quarter of the contract’s value to a HUB subcontractor, making the contract financially unfeasible.
“The government at all levels is supposed to treat every citizen equally, regardless of skin color,” said attorney Erin Wilcox of the Pacific Legal Foundation. “Race-based preferences in public contracting do the exact opposite. They prioritize businesses based on the owners’ race when all that should matter is which company can do the best job at the best price,” Wilcox said.
Nearly 300 Texas agencies and universities must follow these race-based contracting rules. Local governments can adopt them too. This discriminatory system creates a stark double standard. While Aerospace Solutions must split contracts with subcontractors, their HUB-certified competitors can keep 100% of contract work for themselves. Racial classifications, not merit, are used to award contracts worth millions of taxpayer dollars.
According to Pacific Legal Foundation, the U.S. Constitution demands equal treatment under the law. "Taxpayers deserve the best service at competitive prices," said a press release from the firm.
The firm states on its website:
"The real-world impact of the HUB program hit home in August 2023 when the Texas Department of Transportation sought proposals for a three-year employee recruitment contract. Despite its expertise and capacity, Aerospace couldn’t submit a competitive bid under the HUB restrictions. The program’s mandatory 26% set-aside meant surrendering more than a quarter of the contract’s value to other companies—not because they could do better work, but because of the owner’s race. This discriminatory system creates a system where merit and value are less important than racial classifications in deciding the winners. The problem runs deep in Texas government. Nearly 300 state agencies and universities must follow these race-based contracting rules. Local governments adopt them too."
The case is Aerospace Solutions, LLC v. Greg Abbott, et al. filed in U.S. District Court for the Western District of Texas.
Pacific Legal Foundation is a national nonprofit legal organization that has won more than a dozen cases before the U.S. Supreme Court and currently has active cases in 39 states and Washington D.C. It was founded in 1973.