Gov. McMaster tells SC agencies to stop using minority quotas to award contracts
Gov. Henry McMaster issued an executive order Wednesday directing state agencies and state universities to stop using race-based quotas in awarding future state contracts.
State law requires the South Carolina Department of Transportation to award at least 5% of certain contracts for highway and infrastructure money to minority businesses every year.
Another law requires each state agency to develop and submit a plan demonstrating how 10% of the agency’s total controllable annual budget will be spent through minority-owned businesses.
McMaster said in a news release that he is working with House Speaker Murrell Smith and Senate President Thomas Alexander to have legislation prefiled later this month to prioritize a repeal of the provisions he said are unconstitutional.
Until the law is changed, McMaster has ordered agencies to hold off on signing new procurement contracts related to the quotas.
“Nowhere should any person be treated differently because of their race,” McMaster said. “State government spending and procurements should be awarded based on merit and value to the taxpayer, not on set-asides or quotas. This order ensures that until South Carolina’s procurement process complies with the United States Constitution and treats every individual equally under the law, contracts will not be executed.”
The two laws were passed in the early 1980s, likely done to comply with federal requirements, the governor’s office said.
According to an S.C. Commission for Community Advancement and Engagement report, 51 agencies out of 114 did not have a utilization plan for the 2024-25 fiscal year, or did not file a quarterly report.
McMaster’s executive order comes amid a conservative effort to push back against diversity, equity and inclusion initiatives.
President Donald Trump earlier this year issued an executive order that said quotas and set-asides “undermine our national unity, as they deny, discredit and undermine the traditional American values of hard work, excellence and individual achievement in favor of an unlawful, corrosive and pernicious identity-based spoils system.”
McMaster’s office said the order does not apply to any contract that currently exists, and the state has been waiting for months for guidance from federal agencies on how to comply with the Trump order.
S.C. Secretary of Transportation Justin Powell told reporters Wednesday the agency had already been moving the direction of the governor’s order based on federal guidance the agency has received.
The state law specifically cited by McMaster only deals with SC DOT contracts worth $250,000 or less.
“We don’t have projects under $250,000 so we don’t have contracts impacted by (the executive order),” Powell said. “Now there have been other changes on the federal level ... that’s being implemented right now as well.”
In 2023, the U.S. Supreme Court struck down affirmative action in admission policies at Harvard University and the University of North Carolina. The court ruled using race in admission decisions violated the equal protection clause of the U.S. Constitution.
McMaster cited that U.S. Supreme Court case and the Trump order as why he was making this move.
“I have a duty as governor to see that the laws are faithfully executed according to the Constitution of the United States and the Constitution of South Carolina,” McMaster said.
State Rep. John King, D-York, criticized the move by McMaster pointing to how 25% of the state’s population is Black.
“Removing set-asides and contracting protections isn’t about equality. It’s about shutting the door to opportunity and gutting the pathways minority-owned businesses finally had to compete for generational wealth,” King said in a news release.
State Rep. Gilda Cobb-Hunter, D-Orangeburg, called McMaster’s executive order overreach and wondered if state agencies were already complying with the law on the books. She characterized the move as performative politics and a “solution in search of a problem.”
“First off, when I look around I don’t see a lot of people of color in positions of power or influence and that’s at the elected and staff level,” Cobb-Hunter said. “What are they trying to do? Purge the one or two people who may be still hanging on to some type of state contract? I think it’s overreach and unnecessary.”
McMaster insisted his move wasn’t being made for political reasons to appease the Republican base.
“If we didn’t comply with the Constitution as viewed by the Trump administration, as viewed by me, by lawyers here, if we didn’t abide in our people would be losing federal money, would be subject to losing federal money and in all likelihood those funds would not flow with these restrictions in our procurement law,” McMaster said.
Reporter Lucy Valeski contributed to this article.
This story was originally published December 3, 2025 at 1:11 PM with the headline "Gov. McMaster tells SC agencies to stop using minority quotas to award contracts."
