North Carolina Eliminates HUB Office and Repeals HUB Statutory Framework: What Public Construction Contractors Need to Know

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North Carolina's recently enacted 2026 Appropriations Act makes one of the most significant changes to the State's public procurement laws in decades by eliminating the statutory framework governing Historically Underutilized Businesses ("HUBs"). Effective July 1, 2026, the legislation abolishes the Office for Historically Underutilized Businesses and repeals many of the statutes that previously required minority-owned and women-owned business participation goals and related compliance measures on state and local public contracts.

For contractors, subcontractors, suppliers, and public owners, these changes will likely require a careful review of procurement practices and bidding documents as agencies transition away from the former statutory HUB program.

What Changed?

The legislation repeals numerous provisions of Chapter 143 that established and administered North Carolina's HUB program. Among other things, the new law:

• Eliminates the Office for Historically Underutilized Businesses within the Department of Administration.
• Repeals statutory minority-owned and women-owned business participation goals applicable to many public construction projects.
• Eliminates statutory good-faith effort requirements and various reporting and certification provisions associated with the former HUB program.
• Requires state agencies and local governmental entities to update procurement procedures and contract documents that reference the repealed statutes.

Although the Department of Administration has indicated that it intends to continue certain outreach and small business assistance efforts through its Small Business Enterprise Program, the statutory HUB program itself has been repealed.

What Does This Mean for Public Construction Projects?

The practical impact of the legislation will depend on the source of project funding.

For state-funded construction projects, contractors should expect many of the traditional HUB participation requirements to disappear as public owners revise their bid forms and procurement procedures. Existing specifications, instructions to bidders, and contract forms that reference repealed HUB statutes will need to be updated.

However, not all minority business participation requirements have been eliminated. Projects receiving federal funding—particularly transportation, aviation, and transit projects administered under U.S. Department of Transportation (“USDOT”) programs—remain subject to applicable federal Disadvantaged Business Enterprise ("DBE") requirements to the extent they exist after the USDOT effectively paused all DBE programs and requirements. Likewise, project-specific funding conditions or other federal requirements may continue to impose participation obligations notwithstanding the repeal of North Carolina's HUB statutes.

Transition Issues to Watch

As North Carolina public owners implement the new legislation, contractors should expect a period of transition. Bid packages prepared before the legislation became effective may still contain references to repealed HUB statutes or require forms that are no longer supported by current law.

Accordingly, bidders should carefully review each solicitation to determine:

• whether the project is state-funded or federally funded;
• whether any minority participation requirements are based on current statutory authority;
• whether bid forms and instructions have been updated to reflect the legislative changes; and
• whether clarification should be requested before bids are submitted if solicitation documents appear inconsistent with current law.

Public owners likewise should review their standard specifications, procurement manuals, and contract templates to ensure they reflect the new statutory framework.

Looking Ahead

As public owners revise their procurement procedures and contract documents, contractors should continue to evaluate each project individually rather than assuming the repeal automatically changes existing contractual obligations.

For current projects, contractors should continue complying with any HUB participation or good-faith effort requirements contained in their contracts unless the owner issues revised instructions or formally modifies those obligations. Contractors should also monitor owner communications for guidance regarding the implementation of the new legislation on ongoing projects.

For new solicitations, bidders should carefully review procurement documents to determine whether any participation requirements remain applicable and whether those requirements are based on federal funding or other project-specific obligations. If solicitation documents continue to reference repealed HUB statutes, contractors should consider seeking clarification before submitting their bids.

Our Construction Practice Group will continue monitoring implementation of these legislative changes and is available to assist owners, contractors, subcontractors, and design professionals in navigating the transition and addressing questions regarding compliance with both state and federal participation requirements.