(a) General Provisions
(1) In accordance with Texas Government Code, Chapter 2161, Subchapter F, 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.
(A) State agencies shall use the following steps to determine if subcontracting opportunities are probable under the contract:
(i) Use the HUB participation goals in §111.13 of this title (relating to Annual Procurement Utilization Goals); and
(ii) Research the Centralized Master Bidders List, the HUB Directory, the Internet, and other directories, identified by the commission, for HUBs that may be available to perform the contract work.
(B) In addition, determination of subcontracting opportunities may include, but is not limited to, the following:
(i) contacting other state and local agencies and institutions of higher education to obtain information regarding similar contracting and subcontracting opportunities; and
(ii) reviewing the history of similar agency purchasing transactions.
(2) 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.
(A) The HUB subcontracting plan shall be submitted at the same time as the response (bid, proposal, offer, or other applicable expression of interest), except for construction contracts involving alternative delivery methods. For construction contracts involving alternative delivery methods, the HUB subcontracting plan may be submitted up to 24 hours following the date/time that responses are due provided that responses are not opened until the HUB subcontracting plan is received.
(B) Responses that do not include a completed HUB subcontracting plan in accordance with paragraph (3) of this section, shall be rejected due to material failure to comply with advertised specifications in accordance with §113.6(a) of this title (relating to Bid Evaluation and Award).
(3) A state agency shall require a respondent to state whether it is a certified HUB. A state agency shall also require a respondent to state overall subcontracting and overall certified HUB subcontracting to be provided in the contract. Respondents shall follow procedures in subsection (a)(3)(A)(i), (a)(3)(A)(ii), and (a)(3)(A)(iii) of this section when developing the HUB subcontracting plan.
(A) The HUB subcontracting plan shall consist of completed forms prescribed by the Texas Building and Procurement Commission and shall include the following:
(i) certification that respondent has made a good faith effort to meet the requirements of this section;
(ii) identification of the subcontractors that will be used during the course of the contract;
(iii) the expected percentage of work to be subcontracted; and
(iv) and the approximate dollar value of that percentage of work. The plan shall include goals established pursuant to §111.13 of this title (relating to Annual Procurement Utilization Goals).
(B) The successful respondent shall provide all additional documentation required by the agency to demonstrate compliance with good faith effort requirements prior to contract award. If the successful respondent is unable to provide supporting documentation (phone logs, fax transmittals, electronic mail, etc.) within the timeframe specified by the agency to demonstrate compliance with this subsection prior to contract award, that respondent's bid/proposal shall be rejected for material failure to comply with advertised specifications.
(b) Construction Contracts
(1) Evidence of good faith effort in developing a HUB subcontracting plan for construction contracts, including heavy construction, building construction, and special trade construction includes, but is not limited to, the following procedures:
(A) Divide the contract work into reasonable lots or portions to the extent consistent with prudent industry practices.
(B) Provide written justification of the selection process if a non HUB subcontractor is selected.
(C) Provide notice to minority or women trade organizations or development centers to assist in identifying HUBs by disseminating subcontracting opportunities to their membership/participants. The notice shall, in all instances, include the scope of work, information regarding location to review plans and specifications, information about bonding and insurance requirements, and identify a contact person. Respondent must provide notice to organizations or development centers no less than five (5) working days for construction contracts prior to submission of the response (bid, proposal, offer, or other applicable expression of interest).
(D) Notify HUBs of the subcontracting opportunities that the respondent intends to subcontract. The preferable method of notification shall be in writing. The notice shall, in all instances, include the scope of the work, information regarding the location to review plans and specifications, information about bonding and insurance requirements, and identify a contact person. The notice shall be provided to potential HUB subcontractors prior to submission of the respondent's response.
(2) The respondent shall provide potential HUB subcontractors reasonable time to respond to the respondent's notice. "Reasonable time to respond" in this context is no less than five (5) working days for construction contracts, including heavy construction, building construction, and special trade construction, from receipt of notice, unless circumstances require a different time period, which is determined by the agency and documented in the contract file.
(3) The respondent shall use the commission's Centralized Master Bidders List, the HUB Directory, Internet resources, and/or other directories as identified by the commission or agency when searching for HUB subcontractors. Respondents may rely on the services of minority, women, and community organizations contractor groups, local, state, and federal business assistance offices, and other organizations that provide assistance in identifying qualified applicants for the HUB program who are able to provide all or select elements of the HUB subcontracting plan.
(4) The respondent shall provide the notice described in this section to three or more HUBs per each subcontracting opportunity that provide the type of work required for each subcontracting opportunity identified in the contract specifications or any other subcontracting opportunity the respondent cannot complete with its own equipment, supplies, materials, and/or employees. The respondent must document the HUBs contacted on the forms prescribed by the Texas Building and Procurement Commission.
(c) Professional Services Contracts
(1) Evidence of good faith effort in developing a HUB subcontracting plan for professional services contracts is established if the prime contractor meets the following conditions and procedures:
(A) A HUB subcontracting plan for a professional services contract which meets or exceeds HUB participation goals in §111.13 of this title (relating to Annual Procurement Utilization Goals), constitutes good faith effort under this section, or
(B) Develop a HUB Subcontracting Plan under the following procedures:
(i) Divide the contract work into reasonable lots or portions to the extent consistent with prudent industry practices.
(ii) Notify HUBs of the subcontracting opportunities that the respondent intends to subcontract. The preferable method of notification shall be in writing. The notice shall, in all instances, include the scope of the work, required qualifications, and identify a contact person. The notice shall be provided to potential HUB subcontractors prior to submission of the respondent's response.
(2) The respondent shall provide potential HUB subcontractors reasonable time to respond to the respondent's notice. "Reasonable time to respond" in this context is no less than five (5) working days from receipt of notice, unless circumstances require a different time period, which is determined by the agency and documented in the contract file.
(3) The respondent shall use the commission's Centralized Master Bidders List, the HUB Directory, Internet resources, and/ or other directories as identified by the commission or agency when searching for HUB subcontractors. Respondents may rely on the services of minority, women, and community organizations, contractor groups, local, state, and federal business assistance offices, and other organizations that provide assistance in identifying qualified applicants for the HUB program who are able to provide all or select elements of the HUB subcontracting plan.
(4) The respondent shall provide the notice described in this section to three or more HUBs per each subcontracting opportunity that provide the type of work required for each subcontracting opportunity identified in the contract specifications or any other subcontracting opportunity the respondent cannot complete with its own equipment, supplies, materials, and/or employees. The respondent must document the HUBs contacted on the forms provided by the Texas Building and Procurement Commission.
(A) Provide written justification of the selection process if a non HUB subcontractor is selected.
(B) Provide notice to minority or women trade organizations or development centers to assist in identifying HUBs by disseminating subcontracting opportunities to their membership/participants. The notice shall, in all instances, include the scope of the work, required qualifications, and identify a contact person. Respondent must provide notice to organizations or development centers no less than five (5) working days prior to submission of response (bid, proposal, offer, or other applicable expression of interest).
(d) Commodities and Other Services Contracts
(1) Evidence of good faith effort in developing a HUB subcontracting plan for commodities and other services contracts includes, but is not limited to, the following procedures:
(A) Divide the contract work into reasonable lots or portions to the extent consistent with prudent industry practices.
(B) Notify HUBs of the subcontracting opportunities that the respondent intends to subcontract. The preferable method of notification shall be in writing. The notice shall, in all instances, include the scope of the work, specifications, and identify a contact person. The notice shall be provided to potential HUB subcontractors prior to submission of the respondent's response.
(i) The respondent shall provide potential HUB subcontractors reasonable time to respond to the respondent's notice. "Reasonable time to respond" in this context is no less than five working days from receipt of notice, unless circumstances require a different time period, which is determined by the agency and documented in the contract file.
(ii) The respondent shall use the commission's Centralized Master Bidders List, the HUB Directory, Internet resources, and/or other directories as identified by the commission or agency when searching for HUB subcontractors. Respondents rely on the services of minority, women, and community organizations, contractor groups, local, state, and federal business assistance offices, and other organizations that provide assistance in identifying qualified applicants for the HUB program who are able to provide all or select elements of the HUB subcontracting plan.
(iii) The respondent shall provide the notice described in this section to three or more HUBs per each subcontracting opportunity that provide the type of work required for each subcontracting opportunity identified in the contract specifications or any other subcontracting opportunity the respondent cannot complete with its own equipment, supplies, materials, and/or employees. The respondent must document the HUBs contacted on the forms provided by the Texas Building and Procurement Commission.
(C) Provide written justification of the selection process if a non HUB subcontractor is selected.
(D) Provide notice to minority or women trade organizations or development centers to assist in identifying HUBs by disseminating subcontracting opportunities to their membership/participants. The notice shall, in all instances, include the scope of the work, specifications, and identify a contact person. Respondent must provide notice to organizations or development centers no less than five (5) working days for construction contracts prior to submission of the response (bid, proposal, offer, or other applicable expression of interest).
(2) In making a determination if a good faith effort has been made in the development of the required HUB subcontracting plan, a state agency may require the respondent to submit supporting documentation explaining how the respondent has made a good faith effort according to each criterion listed in subsection (a)(3)(A)(i), (a)(3)(A)(ii), and (a)(3)(A)(iii) of this section. The documentation shall include at least the following:
(A) how the respondent divided the contract work into reasonable lots or portions consistent with prudent industry practices;
(B) how the respondent's notices contain adequate information about bonding, insurance, the availability of plans, the specifications, scope of work, required qualifications and other requirements of the contract allowing reasonable time for HUBs to participate effectively;
(C) how the respondent negotiated in good faith with qualified HUBs, not rejecting qualified HUBs who were also the best value responsive bidder;
(D) how the respondent provided notice to minority or women trade organizations or development centers to assist in identifying HUBs by disseminating subcontracting opportunities to their membership/participants; and
(E) for contracts subject to (c)(1)(A), how the respondent plans to subcontract with certified HUBs in an effort to meet or exceed HUB participation goals in §111.13 of this title (relating to Annual Procurement Utilization Goals) for each identified subcontracting opportunity.
(3) A respondent's participation in a Mentor Protégé Program under the Texas Government Code §2161.065, and the submission of a protégé as a subcontractor in the HUB subcontracting plan constitutes a good faith effort for the particular area to be subcontracted with the protégé. When submitted, state agencies may accept a Mentor Protégé Agreement that has been entered into by the respondent (mentor) and a certified HUB (protégé). The agency shall consider the following in determining the respondent's good faith effort:
(A) if the respondent has entered into a fully executed Mentor Protégé Agreement that has been registered with the commission prior to submitting the plan, and
(B) if the respondent's HUB subcontracting plan identifies the areas of subcontracting that will be performed by the protégé.
(4) If the respondent is able to fulfill any of the potential subcontracting opportunities identified with its own equipment, supplies, materials and/or employees, respondent must sign an affidavit and provide a statement explaining how the respondent intends to fulfill each subcontracting opportunity. The respondent must agree to provide the following if requested by the agency:
(A) evidence of existing staffing to meet contract objectives;
(B) monthly payroll records showing company staff fully engaged in the contract; and
(C) on site reviews of company headquarters or work site where services are to be performed.
(D) documentation proving employment of qualified personnel holding the necessary licenses and certificates required to perform the work.
(5) 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 this section. If the agency determines that a submitted HUB subcontracting plan was not developed in good faith, the agency shall treat the lack of good faith as a material failure to comply with advertised specifications, and the subject response (bid, proposal, offer, or other applicable expression of interest) shall be rejected. The reasons for rejection shall be recorded in the procurement file.
(6) If the respondent is selected and decides to subcontract any part of the contract after the award, as a provision of the contract, the contractor/vendor must comply with provisions of this section relating to developing and submitting a subcontracting plan before any modifications or performance in the awarded contract involving subcontracting can be authorized by the state agency. If the selected contractor/vendor subcontracts any of the work without prior authorization and without complying with this section, the contractor/vendor would be deemed to have breached the contract and be subject to any remedial actions provided by Texas Government Code, Chapter 2161, state law and this section. Agencies may report nonperformance relative to its contracts to the commission in accordance with Chapter 113, Subchapter F of this title (relating to the Vendor Performance and Debarment Program).
(7) If at any time during the term of the contract, a contractor/vendor desires to make changes to the approved subcontracting plan, proposed changes must be received for prior review and approval by the state agency before changes will be effective under the contract. The contractor/vendor must comply with provisions of subsection (a), paragraph 3, relating to developing and submitting a subcontracting plan for substitution of work or of a subcontractor, prior to any alternatives being approved under the subcontracting plan. The state agency shall approve changes by amending the contract or by another form of written agency approval. The reasons for amendments or other written approval shall be recorded in the procurement file.
(8) If a state agency expands the original scope of work through a change order or contract amendment, including a contract renewal that expands the scope of work, the state agency shall determine if the additional scope of work contains additional probable subcontracting opportunities not identified in the initial solicitation. If the agency determines additional probable subcontracting opportunities exist, the agency will require the contractor/vendor to submit a HUB subcontracting plan/revised HUB subcontracting plan for the additional probable subcontracting opportunities.
(9) The HUB subcontracting plan/revised HUB subcontracting plan shall comply with the provisions of this section relating to development and submission of a subcontracting plan before any modifications or performance in the awarded contract involving the additional scope of work can be authorized by the agency. If the contractor/vendor subcontracts any of the additional subcontracting opportunities identified by the agency without prior authorization and without complying with this section, the contractor/vendor would be deemed to have breached the contract and be subject to any remedial actions provided by Texas Government Code, Chapter 2161, state law and this section. Agencies may report nonperformance relative to its contracts to the commission in accordance with Chapter 113, Subchapter F of this title (relating to the Vendor Performance and Debarment Program.)
(10) The contractor/vendor shall maintain business records documenting its compliance with the HUB subcontracting plan and shall submit a compliance report to the contracting agency monthly and in the format required by the Texas Building and Procurement Commission. The compliance report submission shall be required as a condition for payment.
(11) During the term of the contract, the state agency shall monitor the HUB subcontracting plan monthly to determine if the value of the subcontracts to HUBs meets or exceeds the HUB subcontracting provisions specified in the contract. Accordingly, state agencies shall audit and require a contractor/vendor to whom a contract has been awarded to report to the agency the identity and the amount paid to its subcontractors in accordance with §111.16(c) of this title (relating to State Agency Reporting Requirements). If the contractor/vendor is meeting or exceeding the provisions, the state agency shall maintain documentation of the contractor's/vendor's efforts in the contract file. If the contractor/vendor fails to meet the HUB subcontracting provisions specified in the contract, the state agency shall notify the contractor of any deficiencies. The state agency shall give the contractor/vendor an opportunity to submit documentation and explain to the state agency why the failure to fulfill the HUB subcontracting plan should not be attributed to a lack of good faith effort by the contractor/vendor.
(12) To determine if the contractor/vendor made the required good faith effort, the agency may not consider the success or failure of the contractor/vendor to subcontract with HUBs in any specific quantity. The agency's determination is restricted to considering factors indicating good faith effort including, but not limited to, the following:
(A) whether the contractor gave timely notice to the subcontractor regarding the time and place of the subcontracted work;
(B) whether the contractor facilitated access to the work site, electrical power, and other necessary utilities; and
(C) whether documentation or information was provided that included potential changes in the scope of contract work.
(13) If a determination is made that the contractor/vendor failed to implement the HUB subcontracting plan in good faith, the agency, in addition to any other remedies, may report nonperformance to the commission in accordance with Chapter 113, Subchapter F of this title (relating to Vendor Performance and Debarment Program). In addition, if the contractor/vendor failed to implement the subcontracting plan in good faith, the agency may revoke the contract for breach of contract and make a claim against the contractor/vendor.
(14) State agencies shall review their procurement procedures to ensure compliance with this section. In accordance with §111.26 of this title (relating to HUB coordinator responsibilities) the agency's HUB coordinator and contract administrators should facilitate institutional compliance with this section.