Historically Underutilized Business (HUB)
Subcontracting Plan

Information

In accordance with Texas Government Code (TGC) §2161.252 and Texas Administrative Code (TAC), Title 34, Part 1, Chapter 20, Subchapter B, Rule 20.14, each state agency (including institutions of higher education) as defined by TGC §2161.002 that considers entering into a contract with an expected value of $100,000 or more over the life of the contract (including any renewals) shall, before the agency solicits bids, proposals, offers, or other applicable expressions of interest, determine whether subcontracting opportunities are probable under the contract.

If subcontracting opportunities are probable, each state agency’s invitation for bid or other purchase solicitation document for construction, professional services, other services, and/or commodities with an expected value of $100,000 or more shall state that probability and require a HUB Subcontracting Plan (HSP).

In accordance with TGC §2161.181-182, each state agency shall make a good faith effort to increase the contract awards for the purchase of goods or services to HUBs based on rules adopted by the Comptroller of Public Accounts to implement the disparity study described by TGC §2161.002(c).

The purpose of the HUB Program is to promote equal business opportunities for economically disadvantaged persons (as defined by TGC §2161) to contract with the State of Texas in accordance with the goals specified in the State of Texas Disparity Study.  The HUB goals per 34 TAC, Rule 20.13 are:

1. *11.2 percent for heavy construction other than building contracts.
2. *21.1 percent for all building construction, including general contractors and operative builders contracts.
3. 32.7 percent for all special trade construction contracts.
4. 23.6 percent for professional services contracts.
5. 24.6 percent for all other services contracts.
6. 21.0 percent for commodities contracts.

Instructions

All respondents (HUBs and Non-HUBs) submitting bids, proposals, offers, or other applicable expressions of interest are required to make a good faith effort to develop and submit an HSP.  Respondents are required to follow, but are not limited to, the following method(s) when completing an HSP:

Method 1:

Pertains to 100% utilization of HUBs for all subcontracting opportunities identified by the Respondent. When completing the HSP for Method 1, the Respondent will complete the following steps:

• The Respondent will include their company information in Section 1 to indicate their HUB
  status, and information pertaining to the solicitation;
  
• The Respondent will check “Yes” in Section 2(a) to indicate their intent to subcontract portions of the contract;
  
• The Respondent will list all the portions of work they intend to subcontract in Section 2(b), and indicate the percentage of the contract they expect to award to HUB vendors for each subcontracting opportunity. The percentage is based on the total contract and not solely on the subcontracting opportunity;
  
• The Respondent will check “Yes” in Section 2(c), to indicate their utilization of only Texas certified HUBs to perform each subcontracting opportunity;  
  
• The Respondent will complete the Affirmation in Section 4 to ensure all information provided in the HSP and if applicable, attached supporting documentation, is correct;
  
• The Respondent will complete Method A (Attachment A) of the HSP, verifying all HUB subcontractors that will be utilized for each subcontracting opportunity; or,

Method 2:

Pertains to the utilization of a HUB Protégé for any and all available subcontracting opportunities identified by the Respondent. Respondents who intend to utilize their HUB Protégé must have an approved Mentor Protégé agreement that is posted on the Comptroller of Public Accounts Website prior to the submission of the bid. When completing the HSP for Method 2, the Respondent will complete the following steps:

• The Respondent will include their company information in Section 1 to indicate their HUB
  status, and information pertaining to the solicitation;
  
• The Respondent will check “Yes” in Section 2(a) to indicate their intent to subcontract portions of the contract;
  
• The Respondent will list all the portions of work they intend to subcontract in Section 2(b), and indicate the percentage of the contract they expect to award to HUB vendors for each subcontracting opportunity. The percentage is based on the total contract and not solely on the subcontracting opportunity;
  
• The Respondent will complete the Affirmation in Section 4 to ensure all information provided in the HSP and if applicable, attached supporting documentation, is correct;
  
• The Respondent will complete Sections B-1, B-2 and B-4 for each subcontracting opportunity in Method B (Attachment B) of the HSP; or,

Method 3:

Pertains to Respondents that intend to utilize HUBs and Non-HUBs; and the *aggregate percentage of subcontracting with HUBs meets or exceeds the HUB Goal.  The HUB Goal can only be met or exceeded by Respondents that have a contract in place with a Texas Certified HUB for five (5) years or less. When completing the HSP for Method 3, the Respondent will complete the following steps:

• The Respondent will include their company information in Section 1 to indicate their HUB
  status, and information pertaining to the solicitation;
  
• The Respondent will check “Yes” in Section 2(a) to indicate their intent to subcontract portions of the contract;  
  
• The Respondent will list all the portions of work they intend to subcontract in Section 2(b),
  and indicate the percentage of the contract they expect to award to HUB vendors for each
  subcontracting opportunity. The percentage is based on the total contract and not solely on
  the subcontracting opportunity;
  
• The Respondent will check “No” in Section 2(c) to indicate the utilization of HUBs and Non- HUBs;
  
• The Respondent will check “Yes” in Section 2(d), to indicate that the *aggregate
  percentage of the contract with HUBs meets or exceeds the HUB goal;
  
• The Respondent will complete the Affirmation in Section 4 to ensure all information provided in the HSP and if applicable, attached supporting documentation, is correct;
  
• The Respondent will complete Method A (Attachment A) of the HSP, verifying all
  subcontractors that will be utilized for each subcontracting opportunity; or,
  
  *Aggregate percentage of the contract expected to be subcontracted to HUBs with which you have had contracts in place for five (5) years or less.

Method 4:

Pertains to Respondents that intend to utilize HUBs and Non-HUBs; and the *aggregate percentage of subcontracting with HUBs does not meet or exceed the HUB Goal.  The HUB Goal can only be met or exceeded by Respondents that have a contract in place with a Texas Certified HUB for five (5) years or less. When completing the HSP for Method 4, the Respondent will complete the following steps:

• The Respondent will include their company information in Section 1 to indicate their HUB status, and information pertaining to the solicitation;
  
• The Respondent will check “Yes” in Section 2(a) to indicate their intent to subcontract portions of the contract;
  
• The Respondent will list all the portions of work they intend to subcontract in Section 2(b), and indicate the percentage of the contract they expect to award to HUB vendors for each subcontracting opportunity. The percentage is based on the total contract and not solely on the subcontracting opportunity;
• The Respondent will check “No” in Section 2(c), to indicate the utilization of HUBs and Non-HUBs;
• The Respondent will check “No” in Section 2(d), to indicate that the *aggregate percentage of the contract with HUBs does not meet or exceed the HUB goal
• The Respondent will complete the Affirmation in Section 4 to ensure all information provided  in the HSP and if applicable, attached supporting documentation, is correct;
  
• The Respondent will complete Method B (Attachment B), following the good faith effortrequirements of the form, and verify all subcontractors that will be utilized for each subcontracting opportunity: or,
  
  *Aggregate percentage of the contract expected to be subcontracted to HUBs with which you have had contracts in place for five (5) years or less.

NOTE: When applicable, when notifying at least three (3) or more Certified Texas HUBs, the HUBs must be allowed at least seven (7) working days to respond to the notice prior to the respondent submitting its bid response to the contracting agency.  In addition, notification of subcontracting opportunities to minority or women trade organizations and/or development centers must be submitted at least seven (7) working days prior to submitting its bid response to the contracting agency.

NOTE: The Texas Comptroller of Public Accounts Statewide HUB Program Office has included a HUB Subcontracting Opportunity Notification Form. This is only a sample form, which may be used by Respondents, when applicable, in completing the HSP. The form is used as a notification when submitting a notice to three (3) or more Certified Texas HUBs and minority or women trade organizations and/or development centers.

Method 5:

Pertains to Respondents that intend to self perform the entire contract utilizing their own equipment, supplies, materials, and/or employees.  Respondents will be required to provide a justification for self performance when completing the HSP.  When completing the HSP, the Respondent will complete the following steps:

• The Respondent will include their company information in Section 1to indicate their HUB
  status, and information pertaining to the solicitation;
  
• The Respondent will select “No” in Section 2(a), to indicate their intent to not subcontract any portion of the contract, and I will be fulfilling the entire contract with their own resources;
  
• The Respondent will provide a self performance justification in Section 3, indicating how they
  will self perform the entire contract using their own resources. The Respondent will either
  indicate the page numbers/sections of their proposal which indicate their self perform
  justification, or provided a written explanation in the space provided in this section.;
  
• The Respondent will complete the Affirmation in Section 4 to ensure all information provided 
  in the HSP and if applicable, attached supporting documentation, is correct;

HUB Subcontracting Plan Reportings and Contract Compliance

The contracting agency will receive HUB credit for the total amount of expenditures made directly to prime contractor who are State of Texas HUB certified. In addition, if the prime contractor is not a HUB, agencies will receive HUB credit for the total amount of expenditures the prime contractor makes to HUB subcontractors, if applicable.

HSP Prime Contractor Progress Assessment Report:

All Prime contractors (HUB and Non-HUBs), whether subcontracting or self performing, are required to comply with the following reporting and contract compliance procedures:

1. Prime contractors shall report to the contracting agency their use of HUB subcontractors to fulfill the subcontracting opportunities identified in their HSP (See Prime Contractor Progress Assessment Report, at http://www.cpa.state.tx.us/procurement/prog/hub/hub-forms/.
2. Prime contractors shall notify the contracting agency and obtain prior approval before any changes can be made to its HSP. The proposed changes must comply with the good faith effort requirements related to developing and submitting an HSP as described in the HSP instructions above.
3. The contracting agency will determine if the value of subcontractors to HUB meets or exceeds the HUB subcontracting provisions specified in the prime contractor’s HSP. If the contracting agency determines that the prime contractor’s subcontracting activity does not demonstrate a good faith effort, the prime contractor may be subject to provisions in the Vendor Performance and Debarment Program (34 TAC, Part 1, Chapter 20, and Subchapter C).

HSP Special Instructions/Addiitional Requirements

When specified by the contracting agency, special instructions/additional requirements will be included in the HSP.

Post Award Notification to Subcontractor

Respondents awarded any portion of the procurement/contract are required to provide a notice no later than ten (10) working days after the contract is awarded to all the subcontractors (HUBs and Non-HUBs) and the HUB Program Office of their selection as a subcontractor.

The notice must specify at a minimum the contracting agency’s name and its point of contact for the contract, the contract award number, the subcontracting opportunity they (the subcontractor) will perform, the approximate dollar value of the subcontracting opportunity, and the expected percentage of the total contract that the subcontracting opportunity represents.