The North Carolina legislature enacted the 2026 Appropriation Act, changing how the state conducts public procurement. It has eliminated the statutory framework governing the Historically Underutilized Business (HUBs). 

The latest state budget passed by the state’s General Assembly removed North Carolina’s Department of Administration Office for HUBs, effective from July 1st, 2026. This program was started in 1999 under an executive order from then-Governor Jim Hunt.

Over the last 25 years, the HUB office was responsible for promoting the growth of businesses owned by historically marginalized communities across the state. They helped by providing resources for business development, education, and economic opportunities.

The Office has, over the years, helped thousands of businesses obtain HUB and small business certification, making them eligible for government contracts. The new law has repealed several provisions of Chapter 143, including:

• Removing the statutory minority- and women-owned business participation goals in state contracting projects
• Eliminating good-faith effort requirements, reporting, and certifications associated with the HUB program
• Requiring state agencies and local government to update procurement procedures and contract documents to mention the newly made changes

The NC Small Business Enterprise Program will be moved to the Division of Purchase & Contract. 

“HUB vendors have done great work for the state for decades, and we encourage agencies to continue to work with them,” stated NC Department of Administration Secretary Gabriel J. Esparza. “The HUB Office played an instrumental role in opening doors of opportunity for businesses that had not traditionally been at the table to compete for state contracts. They helped those businesses and our economy grow, while encouraging competition and good value for taxpayer dollars.”  

For state-funded projects, contractors can expect many conventional HUB requirements to be waived during the transition. However, federal contracts, especially those through the USDOT, are subject to applicable DBE requirements. 

During this period of transition, contractors and public policymakers alike must give due consideration to changing norms, especially for large packages prepared before the new legislation was enacted.