HUB Participation and HUB Subcontracting Plan Requirements Training

Historically Underutilized Business (HUB) Participation Requirements HUB Program Mission, Goals and Objective Statutory Requirements for HUB Participation Administrative HUB Rules Requirements for HUB Participation

HUB Program Mission, Goals And Objectives

HUB Program Mission The University of Texas at San Antonio Historically Underutilized Business (HUB) initiative is to encourage and assist participation by such businesses in the contracting and purchasing process. It is UTSA's policy to be committed to maximizing when available, the number and value of purchases with HUBs. 

HUB Program Goals and Objectives The Commission is committed to promoting full and equal business opportunities for all businesses in State contracting as referenced in HUB Rules and in accordance with the goals as related to the State of Texas Disparity Study: 11.2% for heavy construction other than building contracts; 21.1% for all building construction 32.9% for all special trade construction contracts; 23.7% for professional services contacts; 26.0% for all other services contracts; and, 21.1% for commodities contracts.

Statutory Requirements for HUB Participation

What is a HUB?

Statutory Requirements for HUB Participation TX GOVERNMENT CODE. CHAPTER 2161.001. HISTORICALLY UNDERUTILIZED BUSINESSES. SUBCHAPTER A. “Historically Underutilized Businesses” is defined as: Business where headquarters resides in Texas For profit business 51% or more of the business is owned by an Economically Disadvantaged Person (EDP) EDP actively participates in the business’ control, operation, and management

Statutory Requirements for HUB Participation TX GOVERNMENT CODE. CHAPTER 2161.001. HISTORICALLY UNDERUTILIZED BUSINESSES. SUBCHAPTER A. (Cont.) “Economically Disadvantaged Person” is defined as: A person who is economically disadvantaged because of the person’s identification as a member of a certain group (i.e. Black Americans, Hispanic Americans, Women, Asian Pacific Americans, Native Americans, and service disabled veterans as defined by 38 U.S.C. Section 101[2] who have suffered at least a 20 percent service- connected disability as defined by 38 U.S.C. Section 101[16]); and, who has suffered the effects of discriminatory practices or other similar insidious circumstances over which the person has no control.

Statutory Requirements for HUB Participation Texas Legislature TX GOVERNMENT CODE. CHAPTER 2161.002 (2) (C). HISTORICALLY UNDERUTILIZED BUSINESSES. SUBCHAPTER A. State Agencies and Institutions of Higher Education TX Comptroller of Public Accounts TX GOVERNMENT CODE. CHAPTER 2161.003. HISTORICALLY UNDERUTILIZED BUSINESSES. SUBCHAPTER A. Rules apply to the Agency’s construction projects and purchases of goods and services paid for with appropriated money without regard to whether a project or purchase is otherwise subject to this subtitle.

Statutory Requirements for HUB Participation TEXAS GOVERNMENT CODE. CHAPTER 2161.002 (2) (C). HISTORICALLY UNDERUTILIZED BUSINESSES. SUBCHAPTER A. GENERAL PROVISIONS. COMMISSION ADMINISTRATION; COMPTROLLER OF PUBLIC ACCOUNTS (CPA) ASSISTANCE. In adopting rules to administer this chapter, the Commission (i.e., CPA) shall adopt rules that are based on the results of the “State of Texas Disparity Study, A Report of the Texas Legislature as Mandated by H.B. 2626, 73rd Legislature, December 1994” (prepared by National Economic Research Associates, Inc.). The Commission shall revise the rules in response to the findings of any updates of the study that are prepared on behalf of the State.  

Statutory Requirements for HUB Participation TEXAS GOVERNMENT CODE. CHAPTER 2161.003. HISTORICALLY UNDERUTILIZED BUSINESSES. SUBCHAPTER A. GENERAL PROVISIONS. AGENCY RULES.   A State Agency, including an institution of higher education, shall adopt the commission’s rules under Section 2161.002 as the Agency’s or institution’s own rules. Those rules apply to the Agency’s construction projects and purchases of goods and services paid for with appropriated money without regard to whether a project or purchase is otherwise subject to this subtitle.   

Statutory Requirements for HUB Participation TEXAS GOVERNMENT CODE. CHAPTER 2161.181 – 182. HISTORICALLY UNDERUTILIZED BUSINESSES. SUBCHAPTER D. PURCHASING GOALS.   A state agency including the Commission, shall make a good faith effort to increase the contract awards for the purchase of goods or services and construction contracts that the agency expects to make during a fiscal year to historically underutilized businesses based on rules adopted by the commission to implement the disparity study (goals) described by Section 2161.002 (c).    

Statutory Requirements for HUB Participation TEXAS GOVERNMENT CODE. CHAPTER 2161.252. HISTORICALLY UNDERUTILIZED BUSINESSES. SUBCHAPTER D. AGENCY DETERMINATION REGARDING SUBCONTRACTING OPPORTUNITIES; BUSINESS SUBCONTRACTING PLAN.   Each state agency that considers entering into a contract with an expected value of $100,000 or more shall, before the agency solicits bids, proposals, offers, or other applicable expressions of interest for the contract, determine whether there will be subcontracting opportunities under the contract. If the state agency determines that there is that probability, the agency shall require that each bid, proposal, offer or other applicable expression of interest for the contract include a historically underutilized business subcontracting plan.  

Statutory Requirements for HUB Participation TEXAS GOVERNMENT CODE. CHAPTER 2161.253. HISTORICALLY UNDERUTILIZED BUSINESSES. SUBCHAPTER D. GOOD FAITH COMPLIANCE WITH BUSINESS SUBCONTRACTING PLAN.   When a state agency requires a historically underutilized business subcontracting plan under Section 2161.252, the awarded contract shall contain, as a provision of the contract that must be fulfilled, the plan that the contractor submitted in its bid, proposal, offer, or other applicable expression of interest for the contract. The contractor shall make good faith efforts to implement the plan.    

Administrative HUB Rules

Administrative HUB Rules Texas Administrative Code. Title 34. Part 1. Chapter 20. Subchapter B. Rule 20.11 – 20.28 20.10 Policy and Purpose 20.11 Definitions 20.12 Evaluation of Active Participation in the Control, Operation and Management of Entities 20.13 Statewide Annual Procurement Utilization Goals 20.14 Subcontracts 20.15 Agency Planning Responsibilities 20.16 State Agency Reporting Requirements 20.17 Certification Process 20.18 Protest 20.19 Recertification 20.20 Revocation 20.21 Certification and Compliance Reviews 20.22 Texas Historically Underutilized Business Certification Directory 20.24 Program Review 20.25 Memorandum of Understanding between the Department of Economic Development and the Texas Comptroller of Public Accounts 20.26 HUB Coordinator Responsibilities 20.27 HUB Forum Programs for State Agencies 20.28 Mentor Protégé Program Rules 20.10, 20.13, 20.14, and 20.16 involve HUB policy and procedures in state agency procurement/contracting processes

Administrative HUB Rules Texas Administrative Code. Title 34. Part 1. Chapter 20. Subchapter B. Rule 20.10. Policy and Purpose. Policy of the Commission: Encourage HUB utilization by State Agencies and to assist agencies in the implementation of this policy through race, ethnic, and gender-neutral means. Promote full and equal business opportunities for all businesses in state contracting in accordance with the goals related to the State of Texas Disparity Study and 34 TAC Sections 20.11 through 20.28.

Administrative HUB Rules Texas Administrative Code. Title 34. Part 1. Chapter 20. Subchapter B. Rule 20.14. Subcontracts. In accordance with Texas Government Code, Chapter 2161.252, Subchapter D, each state agency that considers entering into a contract with an expected value of $100,000 or more shall, before the agency solicits bids, proposals, offers, or other applicable expressions of interest, determine whether subcontracting opportunities are probable under the contract.

Administrative HUB Rules Texas Administrative Code. Title 34. Part 1. Chapter 20. Subchapter B. Rule 20.14. Subcontracts. (Cont.) If subcontracting opportunities are probable, each agency’s invitation for bids, requests for proposals or other purchase solicitation documents for construction, professional services, other services, and commodities with an expected value of $100,000 or more shall state that probability and require a HUB subcontracting plan.

Requirements for HUB Participation HSP Determining the Probability for Subcontracting Inclusion of the HSP Development and Submission of HSP HSP Evaluation and Findings Pre-Bid Conference HSP Overview HUB Post Award Meeting

HSP Determining the Probability for Subcontracting Managed by HUB Program State Agencies shall use the following steps to determine if subcontracting opportunities are probable under the contract with an expected value of $100,000 or more: Examine the scope of work to be performed under the proposed contract and determine if it is likely that some of the work may be performed by a subcontractor; Research Centralized Master Bidders List, HUB Directory, Internet and other directories identified by the Commission for HUBS that may be available to perform the contract work;

HSP Determining the Probability for Subcontracting (Cont HSP Determining the Probability for Subcontracting (Cont.) Managed by HUB Program State Agencies shall use the following steps to determine if subcontracting opportunities are probable under the contract with an expected value of $100,000 or more: (Cont.) Contact other state and local agencies and institutions of higher education to obtain information regarding similar contracting and subcontracting opportunities; and, Review history of similar agency purchasing transactions. Once a determination has been made by the HUB Coordinator / Manager, the determination is documented and placed in the procurement file.

Inclusion of the HSP Managed by HUB Program If subcontracting opportunities are probable, each agency’s invitation for bids, requests for proposals or other purchase solicitation documents for construction, professional services, other services, and commodities with an expected value of $100,000 or more shall state that probability and require a HUB subcontracting plan.  The HUB Participation Section of the solicitation instrument will be updated with the appropriate language.

Development and Submission of the HSP The HUB subcontracting plan shall be submitted at the same time as the response (bid, proposal, offer, or other applicable expression of interest). Responses that do not include a completed HUB Subcontracting plan will be rejected due to material failure to comply with advertised specifications in accordance with Subsection 113.6(a) of Title 34 relating to Bid Evaluation and Award, or Section 20.14 relating to Development and Submission of the HSP. Managed by Respondents

HSP Evaluation and Findings Managed by HUB Program The HUB subcontracting plan shall be reviewed and evaluated prior to contract award and, if accepted, shall become a provision of the agency’s contract. Revisions necessary to clarify and enhance information submitted in the original HUB subcontracting plan may be made in an effort to determine good faith effort. State agencies shall review the documentation submitted by the respondent to determine if a good faith effort has been made in accordance with Title 34.

HSP Evaluation and Findings (Cont.) Managed by HUB Program If it is determines that a submitted HUB subcontracting was not developed in good faith, UTSA will determine a material failure to comply with advertised specifications and the subject response (bid, proposal, offer) shall be rejected. The reasons for rejection shall be recorded in the procurement file. HUB Coordinator/Manager will document its finding and determination for compliance which will be sent to the purchaser/project manager for inclusion in the procurement/contract file (copy to HUB Program Office).

Pre-Bid Conference Managed by HUB Program A Vendor Conference is conducted to discuss all areas of the solicitation. The HUB Program Office participates in the Pre-Bid Conference to highlight the HUB Section of the solicitation and HUB Subcontracting Plan (HSP).

Agenda Topics RFP Section HUB Participation Requirements HSP Development and Submission Requirements HSP Assistance Post Award HUB Requirements

RFP Section Historically Underutilized Business Participation Requirements Highlights the HSP Development and Submission Requirements Responses that do not include a completed HSP shall be rejected pursuant to the Texas Government Code §2161.252(b). HUB Category and Participation Goal

RFP Section Historically Underutilized Business Participation Requirements Potential Subcontracting Opportunities Using the Centralized Master Bidders List and HUB Directory Vendor Intends to Subcontract Self Performance

HSP Information Page If HSP is inadequate, response will be rejected HUB GOALS Special reminders and instructions Special reminders and instructions will be included by the HUB Program Office, if applicable. HSP Information Page

HUB Participation Requirements HSP Methods

METHOD I If all (100%) of your subcontracting opportunities will be performed using only HUB vendors, complete the following in the HSP: Section 1 – Respondent and Requisition Information (Page 1); Section 2 a. – Yes, I will be subcontracting portions of the contract (Page 2); Section 2 b. – List all the portions of work you will subcontract, and indicate the percentage of the contract you expect to award to HUB vendors (Page 2 and the continuation sheet as needed);

METHOD I If all (100%) of your subcontracting opportunities will be performed using only HUB vendors, complete the following in the HSP (Cont.): Section 2 c. – Yes, I will be using only Texas certified HUBs to perform all of the subcontracting opportunities listed (Page 2); Section 4 – Affirmation that all information and supporting documentation submitted is true and correct (Page 3); and, HSP GFE Method A (Attachment A) – Complete this attachment for each subcontracting opportunity (Page 1 of 1).

HSP Information Page Respondent and Requisition Information 36 36

2-a; Yes, I will be subcontracting portions of the contract. Company Name and Requisition # Subcontracting Intentions: Complete Section 2-a; Yes, I will be subcontracting portions of the contract. 37 37

2-c; Yes if you will be using only HUBs Complete Section 2-b; List all the portions of work you will subcontract, and indicate the % of the contract you expect to award to all HUBs. Complete Section 2-c; Yes if you will be using only HUBs to perform all Subcontracting Opportunities in 2-b. 38 38

Signature Affirms that Information Provided is Section 4; Affirmation Signature Affirms that Information Provided is True and Correct. 39 39

HSP GFE Method A (Attachment A) Complete this attachment (Sections A-1 and A-2) for each subcontracting opportunity. HUB Subcontractor Selection for this Subcontracting Opportunity Reminders: Notice to subcontractors and UTSA. 40 40

METHOD II If you are subcontracting with HUBs and Non-HUBs, and the aggregate percentage of subcontracting with HUBs, Do not have an existing contract with HUBs for more than 5 years, which meets or exceeds the HUB Goal identified in the solicitation, complete the following in the HSP: Section 1 – Respondent and Requisition Information (Page 1); Section 2 a. – Yes, I will be subcontracting portions of the contract (Page 2); Section 2 b. – List all the portions of work you will subcontract, and indicate the percentage of the contract you expect to award to HUB vendors (Page 2 and the continuation sheet as needed); Section 2 c. – No, I will not be using only Texas certified HUBs to perform all of the subcontracting opportunities listed (Page 2);

METHOD II (cont.) If you are subcontracting with HUBs and Non-HUBs, and the aggregate percentage of subcontracting with HUBs, Do not have an existing contract with HUBs for more than 5 years, which meets or exceeds the HUB Goal identified in the solicitation, complete the following in the HSP (cont.): Section 2 d. – Yes, the aggregate expected percentage of the contract you will subcontract with Texas certified HUBs, which you do not have a contract in place for five (5) years or less, meets or exceeds the HUB goal in the solicitation (Page 2) Section 4 – Affirmation that all information and supporting documentation submitted is true and correct (Page 3); and, HSP GFE Method A (Attachment A) – Complete this attachment for each subcontracting opportunity (Page 1 of 1).

HSP Information Page Respondent and Requisition Information 43 43

2-a; Yes, I will be subcontracting portions of the contract. Company Name and Requisition # Subcontracting Intentions: Complete Section 2-a; Yes, I will be subcontracting portions of the contract. 44 44

only HUBs to perform all Subcontracting Opportunities in 2-b. Complete Section 2-b; List all the portions of work you will subcontract, and indicate the % of the contract you expect to award to HUBs and Non-HUBs. Complete Section 2-c; No to using only HUBs to perform all Subcontracting Opportunities in 2-b. 45 45

agreement in place for five (5) years or less. Complete Section 2-d; Yes, to the Aggregate % of the contract expected to be subcontracted to HUBs to meet or exceed the HUB goal, which you have a contract agreement in place for five (5) years or less. 46 46

Signature Affirms that Information Provided is Section 4; Affirmation Signature Affirms that Information Provided is True and Correct. 47 47

HSP GFE Method A (Attachment A) Complete this attachment (Sections A-1 and A-2) for each subcontracting opportunity. Subcontractor Selection (HUBs and Non-HUBs) Reminders: Notice to subcontractors and UTSA. 48 48

METHOD III If you are subcontracting with HUBs and Non-HUBs, and the aggregate percentage of subcontracting with HUBs, holding an existing contract with HUBs for 5 years or less, does not meet or exceed the HUB Goal identified in the solicitation, complete the following in the HSP: Section 1 – Respondent and Requisition Information (Page 1); Section 2 a. – Yes, I will be subcontracting portions of the contract (Page 2); Section 2 b. – List all the portions of work you will subcontract, and indicate the percentage of the contract you expect to award to HUB vendors (Page 2 and the continuation sheet as needed); Section 2 c. – No, I will not be using only Texas certified HUBs to perform all of the subcontracting opportunities listed (Page 2);

METHOD III (cont.) If you are subcontracting with HUBs and Non-HUBs, and the aggregate percentage of subcontracting with HUBs, holding an existing contract with HUBs for 5 years or less, does not meet or exceed the HUB Goal identified in the solicitation, complete the following in the HSP (cont.): Section 2 d. – No, the aggregate expected percentage of the contract you will subcontract with Texas certified HUBs, which you have a contract in place for five (5) years or less, does not meet or exceed the HUB goal in the solicitation (Page 2) Section 4 – Affirmation that all information and supporting documentation submitted is true and correct (Page 3); and, HSP GFE Method B (Attachment B) – Complete this attachment for each subcontracting opportunity (Page 1 of 1).

HSP Information Page Respondent and Requisition Information 51 51

2-a; Yes, I will be subcontracting portions of the contract. Company Name and Requisition # Subcontracting Intentions: Complete Section 2-a; Yes, I will be subcontracting portions of the contract. 52 52

2-b; List all the portions of work Complete Section 2-b; List all the portions of work you will subcontract, and indicated the % of the contract you expect to award to HUBs and Non-HUBs. Complete Section 2-c; No, to using only HUBs to perform all Subcontracting Opportunities in 2-b. 53 53

agreement in place for five (5) years or less. Complete Section 2-d; No, to the Aggregate % of the contract expected to be subcontracted to HUBs to meet or exceed the HUB goal, which you have a contract agreement in place for five (5) years or less. 54 54

Signature Affirms that Information Provided is Section 4; Affirmation Signature Affirms that Information Provided is True and Correct. 55 55

HSP GFE Method B (Attachment B) Complete Section B-1; and Section B-2 only for each subcontracting opportunity. Good Faith Efforts to find Texas Certified HUB Vendors 56 56

HSP GFE Method B (Attachment B) Written Notification Requirements List Three (3) HUBs Contacted for this Subcontracting Opportunity 57 57

HSP GFE Method B (Attachment B) Written Notification To Trade Organizations List Two (2)Trade Organizations Notified with Dates Sent/Accepted. 58 58

HSP GFE Method B (Attachment B) List the subcontractors Provide written justification why HUB was not selected for this Subcontracting Opportunity Reminders: Notice to subcontractors and UTSA. 59 59

METHOD IV If you are not subcontracting any portion of the contract and will be fulfilling the entire contract with your own resources (i.e., equipment, supplies, materials, and/or employees), complete the following in the HSP: Section 1 – Respondent and Requisition Information (Page 1); Section 2 a. – No, I will not be subcontracting any portion of the contract, and I will be fulfilling the entire contract with my own resources (Page 2); Section 3 – Self Performing Justification that explains how your company will fulfill the entire contract with its own resources (Page 3); and, Section 4 – Affirmation that all information and supporting documentation submitted is true and correct (Page 3);

HSP Information Page Respondent and Requisition Information 61 61

2-a; No, I will not be subcontracting any portion of the contract. Company Name and Requisition # Subcontracting Intentions: Complete Section 2-a; No, I will not be subcontracting any portion of the contract. 62 62

Section 3; Self Performing Justification List the specific page(s)/section(s) of your proposal response, OR in the space provided, which explains how your company will perform the entire contract with its own equipment, supplies, materials and/or employees. 63 63

Signature Affirms that Information Provided is Section 4; Affirmation Signature Affirms that Information Provided is True and Correct. 64 64

HUB Subcontracting Plan (HSP) Overview HUB Subcontracting Opportunity Notification Form http://www.cpa.state.tx.us/procurement/prog/hub/hub-forms/HUBSubcontractingOpportunityNotificationForm.pdf

Sample for Respondent’s Use. This form is used to notify vendors of potential subcontracting opportunities related to a specific agency solicitation. This is not a required form, just a sample notification form

Post Award HUB Requirements RFP Section Historically Underutilized Business Participation Requirements Post Award Meetings HSP Prime Contractor Progress Assessment Report HSP Changes After Contract Award Reporting and Compliance with the HSP

HSP Prime Contractor Progress Assessment Report 68 68

HSP Prime Contractor Progress Assessment Report Required with ALL Pay Requests List ALL Sub payments (HUBs & Non-HUBs) Required even if not subcontracting 69 69