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TITLE 34PUBLIC FINANCE
PART 1COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 20TEXAS PROCUREMENT AND SUPPORT SERVICES
SUBCHAPTER BHISTORICALLY UNDERUTILIZED BUSINESS PROGRAM
RULE §20.14Subcontracts

(a) Analyzing potential contracts of $100,000 or more. In accordance with Government Code, Chapter 2161, Subchapter F, each state agency 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.

  (1) State agencies shall use the following steps to determine if subcontracting opportunities are probable under the contract:

    (A) examining the scope of work to be performed under the proposed contract and determining if it is likely that some of the work may be performed by a subcontractor;

    (B) research the Centralized Master Bidders List, the HUB Directory, the Internet, and other directories, identified by the comptroller, for HUBs that may be available to perform the contract work; and

    (C) an agency may determine that subcontracting is probable for only a subset of the work expected to be performed or the funds to be expended under the contract. If an agency determines that subcontracting is probable on only a portion of a contract, it shall document its reasons in writing for the procurement file.

  (2) In addition, determination of subcontracting opportunities may include, but is not limited to, the following:

    (A) contacting other state and local agencies and institutions of higher education to obtain information regarding similar contracting and subcontracting opportunities; and

    (B) reviewing the history of similar agency purchasing transactions.

(b) Receipt of HUB subcontracting plans.

  (1) If, through the analysis in subsection (a) of this section, an agency determines that subcontracting opportunities are probable, then its invitation for bids, request for proposals or other purchase solicitation documents shall state that probability and require a HUB subcontracting plan. A bid, proposal, offer, or other expression of interest to such a solicitation must include a completed HUB subcontracting plan to be considered responsive.

  (2) The HUB subcontracting plan shall be submitted with the respondent's response on or before the due date for responses, 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.

  (3) Responses that do not include a completed HUB subcontracting plan in accordance with this subsection shall be rejected due to material failure to comply with Government Code, §2161.252(b).

  (4) If a properly submitted HUB subcontracting plan contains minor deficiencies (e.g., failure to sign or date the plan, failure to submit already-existing evidence that three HUBs were contacted), the agency may contact the respondent for clarification to the plan if it contains sufficient evidence that the respondent developed and submitted the plan in good faith.

(c) Requirements of a HUB subcontracting plan.

  (1) 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 paragraph (2)(A) - (D) of this subsection when developing the HUB subcontracting plan.

  (2) The HUB subcontracting plan shall include the agency's HUB goals for its HUB business plan, and shall consist of completed forms prescribed by the comptroller and shall include the following:

    (A) certification that respondent has made a good faith effort to meet the requirements of this section;

    (B) identification of the subcontractors that will be used during the course of the contract;

    (C) the expected percentage of work to be subcontracted; and

    (D) the approximate dollar value of that percentage of work.

  (3) 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 fails 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 and state law.

(d) Establishing good faith effort by respondent.

  (1) Any person submitting a bid, proposal, offer or other applicable expression of interest in obtaining a contract with the state shall submit a completed HUB subcontracting plan demonstrating evidence of good faith effort in developing that plan. Good faith effort shall be shown through utilization of all methods specified below, and in full conformance with all directions for demonstration and submission specified in the HUB subcontracting plan forms prescribed by the comptroller.

    (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 the selected subcontractor is not a HUB.

    (C) Provide documentation of meeting one or more of the following requirements:

      (i) notify trade organizations or development centers that serve members of groups identified in §20.11(19)(C) of this title (relating to Definitions) according to methods established by the comptroller 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 seven (7) working days prior to submission of the response unless circumstances require a different time period, which is determined by the agency and documented in the contract file. The respondent must document compliance with this subsection on the forms prescribed by the comptroller in the manner directed on such forms;

      (ii) submit documentation that 100% of all available subcontracting opportunities will be performed by one or more HUBs; or

      (iii) submit documentation that one or more HUB subcontractors will be utilized and that the total value of those subcontracts will meet or exceed the statewide goal for the appropriate contract category found in §20.13(b) of this title (relating to Statewide Annual HUB Utilization Goals), or the agency-specific goal for the contracting category established by the procuring agency, whichever is higher. When utilizing this demonstration method, HUB subcontractors with which the respondent has existing contracts that have been in place for more than five years can not be claimed for purposes of demonstrating that the applicable goal has been met or exceeded.

    (D) Provide documentation of meeting one or more of the following requirements:

      (i) notify at least three (3) HUB businesses of the subcontracting opportunities that the respondent intends to subcontract. 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 notification shall be in writing, and the respondent must document the HUBs contacted on the forms prescribed by the comptroller. 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 at least seven (7) working days prior to submission of the respondent's response, unless circumstances require a different time period, which is determined by the agency and documented in the contract file;

      (ii) submit documentation that 100% of all available subcontracting opportunities will be performed by one or more HUBs; or

      (iii) submit documentation that one or more HUB subcontractors will be utilized and that the total value of those subcontracts will meet or exceed the statewide goal for the appropriate contract category found in §20.13(b) of this title, or the agency-specific goal for the contracting category established by the procuring agency, whichever is higher. When utilizing this demonstration method, HUB subcontractors with which the respondent has existing contracts that have been in place for more than five years can not be claimed for purposes of demonstrating that the applicable goal has been met or exceeded.

  (2) The respondent shall use the comptroller's Centralized Master Bidders List, the HUB Directory, Internet resources, and/or other directories as identified by the comptroller or the agency when searching for HUB subcontractors. Respondents may utilize 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.

  (3) 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 (c)(2)(A) - (D) 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 trade organizations or development centers to assist in identifying HUBs by disseminating subcontracting opportunities to their membership/participants;

    (E) for contracts subject to paragraph (1)(D)(ii) of this subsection, which HUBs were contracted to perform the subcontracting services for each subcontracting opportunity; and

    (F) for contracts subject to paragraph (1)(D)(iii) of this subsection, which contractor(s) were utilized to perform the subcontracting opportunities, and the relevant dates for the respondent's contractual agreements with the contractor(s).

  (4) A respondent's participation in a Mentor-Protégé Program under 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 comptroller 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.

  (5) If the respondent is able to fulfill all 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;

    (C) on site reviews of company headquarters or work site where services are to be performed; and

    (D) documentation proving employment of qualified personnel holding the necessary licenses and certificates required to perform the work.

Cont'd...

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