Don’t feel sorry for the loss of the program; the beneficiaries needed to go on a diet. The city can build a much better program that really helps the little guys.
A federal judge has ruled Houston’s minority contracting program unconstitutional and prohibited the city from using racial preferences when awarding public contracts. The immediate reaction will be predictable: conservatives destroyed affirmative action, minority businesses will suffer, and decades of progress are being erased.
Some of that may be true. But it is not the whole story.
Houston also helped weaken its own program by refusing to distinguish between businesses that still needed help and businesses that had already become successful, well-financed and politically connected.
I have complained about that almost from the beginning. A program created largely to address racial discrimination gradually became an umbrella that included racial minorities, white women and companies of vastly different sizes. A poor Black contractor struggling to finance his first piece of equipment could be placed in the same general category as a prosperous white woman whose family already had money. A small Hispanic subcontractor unable to obtain bonding could be treated like a large Hispanic engineering or construction company that had been receiving public work for years.
Identity became the qualification. Economic disadvantage became almost secondary.
Long ago, I read an argument that affirmative action in government contracting should be based primarily on class. That made sense to me then, and it makes even more sense now. The government should ask who lacks capital, bonding capacity, equipment, experience, political access and a realistic opportunity to compete—not simply who has the correct race, ethnicity or gender listed on the application.
Houston’s own disparity study pointed toward that problem.
The study found no disparity for Hispanic-owned firms in construction or professional services. It recommended moving firms in categories where no disparity existed into an expanded, race-neutral Small Business Enterprise program. The same study found that larger minority- and women-owned firms were winning multiple large prime contracts and recommended a graduation program for companies that had grown beyond the barriers the program was intended to overcome. A city presentation stated the problem even more plainly: “Graduation has been waived.” (Houston Chronicle)
Houston City Council accepted the study but did not carry out its most difficult recommendation. Hispanic companies in construction and professional services were allowed to remain in the racial-preference program even though the city’s own evidence said they were no longer underutilized in those fields. (Houston Chronicle)
The money involved was substantial.
During fiscal year 2025, Houston awarded almost $515 million to certified minority-, women- and small-business firms on contracts subject to participation goals. Hispanic-owned businesses received $176.9 million, or 34.4 percent—the largest share. Approximately $129.2 million of the Hispanic total was in construction, while another $39.4 million went to professional services.
White women-owned firms received $86.1 million, more than the $72.5 million awarded to Black-owned firms. (City of Houston)
Those numbers do not prove corruption or wrongdoing. They do show that the popular image of minority contracting—a struggling neighborhood businessman finally receiving his first opportunity—does not describe the entire program.
The city reported 459 Hispanic awards, but that does not mean 459 different Hispanic companies received contracts. One established company can receive multiple awards or appear repeatedly as a prime contractor or subcontractor.
The city had 5,713 firms eligible for its minority-, women- and small-business program, yet only 593 received work during the year. That means fewer than 11 percent of eligible firms were used. In construction, only 235 of 1,707 eligible firms received awards. (City of Houston)
The program may have been justified by the existence of thousands of certified businesses while much of the actual money circulated among a much smaller group of regular recipients.
Reytec illustrates why race and disadvantage cannot automatically be treated as the same thing. Reytec is a large Houston-based infrastructure contractor with operations in several Texas cities and experience handling major water, utility and heavy-construction projects. City records show repeated Houston work, including completion of a city contract worth more than $15 million in 2025. The company’s own project list includes a regional pump-station project valued at more than $100 million. (City of Houston)
The Houston Chronicle also reported that Reytec’s founder had donated more than $50,000 to the campaigns of two Texas land commissioners. That does not prove a contract was purchased, and political contributions are legal. It does establish that we are not talking about someone standing outside City Hall with a borrowed pickup and no access to government decision-makers. (Houston Chronicle)
Reytec should not be punished for becoming successful. Success was supposed to be the goal.
But at some point, a company that has grown large, completed major public projects, developed substantial bonding capacity and gained access to political leaders should graduate. Continuing to classify such a company alongside genuinely disadvantaged startups does not expand opportunity. It can allow an established firm to occupy space that was intended to help the next business climb.
A fairer program would begin with economic reality. It would examine company revenue, owner wealth, access to family capital, bonding capacity, equipment, years in business, previous government awards and whether the qualifying owner genuinely controls the company. Assistance would decline as the business became stronger, and graduation would be mandatory rather than repeatedly waived.
Race and gender could still matter when there is evidence that equally situated businesses are treated differently. A poor Black contractor and a poor white contractor may begin with similar bank balances but still encounter different doors. Class should be the foundation, with proven discrimination considered where the evidence supports it.
Instead, Houston defended permanent categories. It treated success as something that never ended eligibility. When its own study recommended narrowing the program, graduating established winners and expanding race-neutral help for genuinely small businesses, City Hall backed away.
Now the entire race-conscious portion of the program has been struck down, including the protections that may still have been necessary for businesses facing real discrimination.
Affirmative action was supposed to be a ladder.
Houston allowed some of the people who reached the top to keep holding it, while thousands waiting below never got a hand on the first rung.