Governor Henry McMaster has signed Executive Order 2025-40, instructing South Carolina state agencies to stop using race-based quotas or set-asides in spending, procurement, and contract awards. The order targets provisions in current state law that require certain percentages of contracts and budgets to be directed toward minority-owned businesses.
Senate President Thomas Alexander and House Speaker Murrell Smith are working with Governor McMaster to introduce legislation aimed at repealing these requirements when the General Assembly reconvenes next month.
“Nowhere should any person be treated differently because of their race,” said Governor Henry McMaster. “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.”
Senate President Thomas Alexander stated: “We are a nation and a state dedicated to the principle that ‘all men are created equal, endowed by their Creator,’ as reflected in the Constitution’s requirement of equal protection of the laws. When existing laws no longer align with that constitutional command, it is our duty to correct them. I am confident my colleagues in the Senate share my belief that state government must reflect equality under the law in all its endeavors and ensure our statutes fully comply with the Constitution.”
Speaker of the House Murrell Smith added: “I am proud the members of the House began addressing these issues during last year’s legislative session. Discrimination is wrong, and its misguided use as a remedy is worse. The House will address this when we return in January.”
Currently, South Carolina law (S.C. Code Ann. § 12-28-2930) requires at least 5% of certain highway and infrastructure contracts from the Department of Transportation to go to minority businesses each year. Another statute (S.C. Code Ann. § 11-35-5240) mandates that every state agency submit a plan showing at least 10% of its controllable annual budget is spent through minority-owned businesses.
A recent Supreme Court decision emphasized that race-based programs must undergo strict scrutiny, cannot use race negatively or as a stereotype, and must eventually end (600 U.S. 181, 213 [2023]). According to officials, these two South Carolina statutes do not meet those standards.
Earlier this year, President Trump issued an executive order criticizing such quotas and set-asides for undermining national unity by replacing traditional values like hard work and achievement with what he called an unlawful identity-based system.
The new executive order applies only going forward; existing contracts will remain unchanged.
