Part 5.
GENERAL SERVICES COMMISSION
Chapter 111.
EXECUTIVE ADMINISTRATIVE DIVISION
Subchapter B. HISTORICALLY UNDERUTILIZED BUSINESS PROGRAM
1 TAC §§111.12, 111.16, 111.28
The General Services Commission proposes amendments to Title
1, T.A.C. §§ 111.12, 111.16 and 111.28 regarding the Historically
Underutilized Business Program complying with the requirements of the Texas
Government Code, Chapter 2161, Subchapter B, §2161.065 concerning the
Mentor-Protégé Program; Subchapter C concerning Planning and
Reporting Requirements; and Subchapter F concerning Subcontracting (enacted
by S.B. 178, 76th Leg. (1999)). The amendments are being proposed to clarify
terminology and to implement the HUB Subcontracting Plans, the agency planning
responsibilities, and the new Mentor Protégé Program. The commission,
according to the revised rules and in accordance with the HUB Program's policies
and procedures, will maintain the requirements.
Sal Valdez, Director of Business Services, has determined that for the
first five year period the proposed sections are in effect, there will be
no effect to state or local government as a result of implementing these sections.
Sal Valdez, Director of Business Services, has also determined that for
each year of the first five year period that the sections are in effect the
public benefit anticipated as a result of implementing these rules is a streamlined
method for securing more goods and services from HUB vendors. These rules
provide a benefit to all small businesses implementing the legislature's policy
of providing opportunities to HUBs to do business with the state. There will
be no negative or unfair regulatory impact on small businesses. There is no
anticipated economic cost to persons who are required to comply with the rules
as proposed.
Comments on the proposals may be submitted to Ann Dillion, General Counsel,
General Services Commission, P. O. Box 13047, Austin, TX 78711-3047. Comments
must be received no later than 30 days from the date of publication of the
proposal to the
Texas Register
.
The sections are proposed under the Texas Government Code, Title
10, Subtitle D, Chapter 2161, Section 2161.002, which provides the General
Services Commission with the authority to promulgate rules under this Code.
The following statute is affected by these rules: Government Code, Title
10, Subtitle D, Chapter 2161.
§111.12.Definitions.
The following words and terms, when used in this subchapter, shall
have the following meanings, unless the context clearly indicates otherwise.
(1)
Applicant--A corporation, sole-proprietorship, partnership,
joint venture, limited liability company, or supplier that applies to the
commission as an historically underutilized business.
(2)
Application--A written request for certification as
an historically underutilized business in the required format submitted to
the commission.
(3)
Commodities--Materials, supplies, or equipment.
(4)
Comptroller--Comptroller of Public Accounts.
(5)
Contractor/Vendor --A supplier of commodities or services
to a state agency under a purchase order contract or other contract.
(6)
Directory--The Texas Certified Historically Underutilized
Business Directory.
(7)
Disparity Study--The State of Texas Disparity Study,
performed by the National Economic Research Associates, Inc. (NERA).
(8)
Economically Disadvantaged Person--An eligible HUB
applicant whose business has not exceeded the graduation size standards according
to the commission's graduation procedures in §111.23 of this title (relating
to Graduation Procedures).
(9)
Forum--A collaborative effort between agencies and
potential contractors/vendors to provide information and training regarding
an agency's procurement opportunities.
(10)
Graduation--When a business exceeds the commission's
size standard for certification.
(11)
Historically Underutilized Business--A business outlined
in subparagraphs (C)-(H) with its principal place of business in Texas (as
defined in paragraph (19) of this section) in which the owner(s):
(A)
have a proportionate interest and demonstrate active participation
in the control, operation, and management of the entities' affairs; and
(B)
are economically disadvantaged because of their identification
as members of the following groups:
(i)
Black Americans--which includes persons having origins
in any of the Black racial groups of Africa;
(ii)
Hispanic Americans--which includes persons of Mexican,
Puerto Rican, Cuban, Central or South American, or other Spanish or Portuguese
culture or origin, regardless of race;
(iii)
American Women--which includes all women of any ethnicity
except those specified in clauses (i), (ii), (iv), and (v) of this subparagraph;
(iv)
Asian Pacific Americans--which includes persons whose
origins are from Japan, China, Taiwan, Korea, Vietnam, Laos, Cambodia, the
Philippines, Samoa, Guam, the U.S. Trust Territories of the Pacific, the Northern
Marianas, and Subcontinent Asian Americans which includes persons whose origins
are from India, Pakistan, Bangladesh, Sri Lanka, Bhutan or Nepal; and
(v)
Native Americans--which includes persons who are American
Indians, Eskimos, Aleuts, or Native Hawaiians; and
(C)
a corporation formed for the purpose of making a profit
in which at least 51% of all classes of the shares of stock or other equitable
securities are owned by one or more persons described by subparagraphs (A)
and (B); or
(D)
a sole proprietorship created for the purpose of making
a profit that is 100% owned, operated, and controlled by a person described
by subparagraphs (A) and (B) of this section; or
(E)
a partnership formed for the purpose of making a profit
in which 51% of the assets and interest in the partnership is owned by one
or more persons who are described by subparagraphs (A) and (B) of this section;
or
(F)
a joint venture in which each entity in the joint venture
is an historically underutilized business under this subdivision; or
(G)
a supplier contract between a historically underutilized
business under this subdivision and a prime contractor/vendor under which
the historically underutilized business is directly involved in the manufacture
or distribution of the supplies or materials or otherwise warehouses and ships
the supplies;
(H)
a business other than described in subparagraphs (D), (F),
and (G) of this section, which is formed for the purpose of making a profit
and is otherwise a legally recognized business organization under the laws
of the State of Texas, provided that at least 51% of the assets and 51% of
any classes of stock and equitable securities are owned by one or more persons
described by subparagraphs (A) and (B) of this section.
(12)
Historically Underutilized Business (HUB) Coordinator--An
agency employee who holds a position equivalent to the procurement director
or is the procurement director. The employee reports to the agency's executive
director on HUB activities including, but are not limited to, the agency's
good faith effort criteria, HUB reporting, contract administration, and marketing
and outreach efforts for HUB participation.
(13)
HUB Report--A fiscal year semi-annual and annual
report of the state's total expenditures, contract awards and payments made
to certified HUBs.
(14)
Mentor Protégé Program--A program designed
by the commission to assist agencies in identifying prime contractors/vendors
and HUBs for potential long-term contractual relationships.
(15)
NERA--National Economic Research Associates, Inc.
(16)
Non-Treasury Funds--Funds paid by a state agency
that are not treasury funds.
(17)
Other services--All services other than construction
and professional services, including consulting services subject to Texas
Government Code, Chapter 2254, Subchapter B.
(18)
Person--U.S. citizen, born or naturalized.
(19)
Principal place of business--A permanent business
office located in Texas where the majority HUB owner(s) makes the decisions,
controls the daily operations of the organization, and participates in the
business. The qualifying owners must be residents of the State of Texas.
(20)
Professional services--Services of accountants, architects,
engineers, land surveyors, and physicians that must be purchased by state
agencies under Texas Government Code, Chapter 2254, Subchapter A.
(21)
Subcontractor--A supplier of commodities or services
to a contractor/vendor.
(22)
Subcontractor Funds--Payments made to certified historically
underutilized businesses by a contractor/vendor or supplier under contract
with the state.
(23)
Size Standards--Graduation thresholds established
by the HUB program consistent with the commission's rules which are extracted
from the U.S. Small Business Administration's size standards, and based on
the gross receipts and gross number of employees according to the Standard
Industrial Classification codes.
(24)
Term Contract--A contract establishing a source or
sources of supply for a specified period of time as defined in § 113.2
of this title (relating to Definitions).
(25)
Treasury Funds--Funds maintained in the state treasury
and paid through the comptroller's office for each state agency.
(26)
USAS--Uniform Statewide Accounting System for the
State of Texas.
(27)
Vendor Identification Number (VID)--A 13-digit identification
number used in state government to identify the bidder or business for payment
or award of contracts, certification as a HUB, and registration on the bidders
list.
(28)
HUB Subcontracting Plan-Written documentation
regarding the use of HUB subcontractors, which is required by a state agency
in procurements with an expected value of $100,000 or more which a potential
contractor/vendor must prepare and return with their bid, proposal, offer,
or other applicable expression of interest. The HUB subcontracting plan subsequently
becomes a provision of the contract awarded as a result of the procurement
process.
§111.16.State Agency Reporting Requirements.
(a)
The comptroller will report to the commission not later
than March 15 of each year regarding the previous six-month period, and on
September 15 of each year regarding the preceding fiscal year, the payments
made for the purchase of goods, services and public works awarded and actually
paid from treasury funds by each state agency. Subject to the capabilities
of the comptroller's USAS system, the comptroller shall identify state agencies'
purchases from state term contracts which are paid from treasury funds so
that those purchases awarded and actually paid under term contracts may be
included in the commission's report of its own purchases.
(b)
State agencies will report to the commission, not later
than March 15 of each year regarding the previous six-month period and on
September 15 of each year regarding the preceding fiscal year, the payments
made for the purchase of goods and services awarded and actually paid from
non-treasury funds by the state agency. The report shall include information
requested by the commission and shall be in a form prescribed by the commission.
State agencies' purchases from state term contracts which are paid from non-treasury
funds must be identified on the report as such so that they may be reflected
on the commission's report of its own purchases.
(c)
State agencies shall maintain, and compile monthly, information
relating to the agency's and each of its operating division's use of historically
underutilized businesses, including information regarding subcontractors and
suppliers. This information shall include but is not limited to the information
required in subsections (a) and (b) of this section. On a monthly basis state
agencies shall require a contractor/vendor to whom a state agency has awarded
a contract to report to the agency the identity and amount paid to each historically
underutilized business to whom the contractor/vendor has awarded a subcontract
for the purchase of supplies, materials and equipment, provided that payment
was made to a historically underutilized business in the month to be reported.
Contractors/Vendors shall report to a state agency progress payments made
to subcontractors, professionals, consultants and suppliers certified as historically
underutilized businesses each month in which such payment is made.
(d)
State agencies will report to the commission, not later
than March 15 of each year regarding the previous six-month period and on
September 15 of each year regarding the preceding fiscal year, the total dollar
amount of historically underutilized business subcontracting participation
in all of the agencies' contracts for the purchase of goods, services and
public works payments. State agencies must include subcontracting participation
paid from Treasury and Non-Treasury funds.
(e)
State agencies that participate in a group purchasing program
under Texas Government Code § 2155.134 shall include a separate report
to the commission, not later than March 15 of each year regarding the previous
six-month period and September 15 of each year regarding the preceding fiscal
year, of purchases that are made through the group purchasing program and
shall report the dollar amount of each purchase that is allocated to the reporting
agency.
(f)
The commission shall prepare a consolidated report based
on a compilation and analysis of the reports submitted by each state agency
and information provided by the comptroller in the format specified by the
commission. These reports of historically underutilized business purchasing
and contracts shall form a record of each agency's purchases in which the
agency selected the contractor/vendor. If the contractor/vendor was selected
by the commission as part of its state term contract program, the purchase
will be reflected on the commission's report of its own purchases. The commission
report will contain the following information:
(1)
the total dollar amount of payments made by each state
agency;
(2)
the total number of HUBs actually paid by each state
agency;
(3)
the total number of contracts awarded to HUBs by each
state agency;
(4)
the number of bids received from HUBs by each state
agency; and
(5)
the graduation rates of HUBs as defined in §111.23
of this title (relating to Graduation Procedures) for the following groups
as defined in § 111.12 of this title (relating to Definitions) and certified
by the commission:
(A)
Black Americans;
(B)
Hispanic Americans;
(C)
American Women;
(D)
Asian Pacific Americans; and
(E)
Native Americans.
(g)
On April 15 of each year, the commission shall submit the
consolidated report regarding the previous six-month period and on October
15 of each year regarding the preceding fiscal year to the presiding officer
of each house of the legislature, the members of the legislature and the joint
select committee.
(h)
State agencies will receive HUB credit
for the total value of contracts awarded directly to certified HUBs under
the Vendor Identification Number in the commission's HUB Directory. When the
prime contractor/vendor is a HUB, it must perform at least 25% of the total
value of the contract with its own or leased employees, as defined by the
Internal Revenue Service, in order for the agency to receive 100% HUB credit
for the entire contract. The prime HUB contractor/vendor may subcontract up
to 75% of the contract with HUBs or non-HUB subcontractors. If a prime HUB
contractor's/vendor's HUB subcontracting plan identifies that it is planning
to perform less than 25% of the total value of contract with its employees,
the agency will receive HUB credit for the value of the contract that was
actually performed by the prime HUB contractor/vendor and its HUB subcontractors.
To obtain HUB credit, the agency must report its HUB subcontracting expenditures
to the commission in accordance with subsection (d) of this section.
(i)
Any prime HUB contractor/vendor that seeks
to satisfy the good faith effort requirement shall report to the agency the
identity and amount paid to each historically underutilized business each
month in which such payment is made. The report will include the volume of
work performed under the contract, the portion of the work that was performed
with its employees, non-HUB contractors/vendors and other HUB contractors/vendors.
The agency may request payment documentation in accordance with subsection
(c) of this section and the HUB subcontracting plan that confirms the performance
of the contractor/vendor. The agency shall discuss the performance of the
contractor/vendor and document the contractor/vendor's performance in the
contract file. Any deficiencies will be identified by the agency and must
be rectified prior to the next reporting period by the contractor/vendor.
§111.28.Mentor Protégé Program.
(a)
In accordance with the Texas Government Code, Section 2161.065,
the commission shall design a Mentor Protégé Program to foster
long-term relationships between contractors/vendors and Historically Underutilized
Businesses (HUBs) and to increase the ability of HUBs to contract with the
state or to receive subcontracts under a state contract. The objective of
the Mentor Protégé Program is to provide professional guidance
and support to the protégé to facilitate their development and
growth. All participation is voluntary and program features should remain
flexible so as to maximize participation. Each state agency with a biennial
appropriation that exceeds $10 million shall implement a Mentor Protégé
Program.
(b)
In efforts to design a Mentor Protégé Program,
each agency, because of its unique mission and resources, is encouraged to
implement a Mentor Protégé Program that considers;
(1)
the needs of protégé businesses requesting
to be mentored;
(2)
the availability of mentors who possess unique skills,
talents, and experience related to the mission of the agency's Program; and
(3)
the agency's staff and resources.
(c)
Agencies may elect to implement Mentor Protégé
Programs individually or cooperatively with other agencies, and/or other public
entities and private organizations, with skills, resources and experience
in Mentor Protégé Programs. Agencies are encouraged to implement
a Mentor Protégé Program to address the needs of its protégé
businesses in the following critical areas of the state's procurements:
(1)
construction,
(2)
commodities, and/or
(3)
services.
(d)
State agencies may consider, but are not limited to, the
following factors in developing their Mentor Protégé Program:
(1)
Develop and implement internal procedures, including an
application process, regarding the Mentor Protégé Program which
identifies the eligibility criteria and the selection criteria for mentors
and potential HUB protégé businesses;
(2)
Recruit contractor/vendor mentors and protégés
to voluntarily participate in the Program;
(3)
Establish a Mentor Protégé Program objective
identifying both the roles and expectations of the agency, mentor and the
protégé;
(4)
Monitor the progress of the mentor protégé
relationship;
(5)
Identify key agency resources including senior managers
and procurement personnel to assist with the implementation of the Program;
and
(6)
Encourage partnerships with local governmental and
nonprofit entities to implement a community based Mentor Protégé
Program.
(e)
An agency's Mentor Protégé Program must include
mentor eligibility and selection criteria. In determining the eligibility
and selection of a mentor, state agencies may consider the following criteria:
(1)
Whether the mentor is a registered bidder on the commission's
Centralized Master Bidders List (CMBL);
(2)
Whether the mentor has extensive work experience and
can provide developmental guidance in areas that meet the needs of the protégé,
including but not limited to, business, financial, and personnel management;
technical matters such as production, inventory control and quality assurance;
marketing; insurance; equipment and facilities; and/or other related resources.
(3)
Whether the mentor is in "good standing" with the
State of Texas and is not in violation of any state statutes, rules or governing
policies;
(4)
Whether the mentor has mentoring experience; and
(5)
Whether the mentor has a successful past work history
with the agency.
(f)
An agency's Mentor Protégé Program must include
protégé eligibility and selection criteria. In determining the
eligibility and selection of HUB protégés, state agencies may
use the following criteria:
(1)
Whether the protégé is eligible and willing
to become certified as a HUB;
(2)
Whether the protégé's business has been
operational for at least one year;
(3)
Whether the protégé is willing to participate
with a mentoring firm and will identify the type of guidance that is needed
for its development;
(4)
Whether the protégé is in "good standing"
with the State of Texas and is not in violation of any state statutes, rules
or governing policies; and
(5)
Whether the protégé is involved in a
mentoring relationship with another contractor/vendor.
(g)
The mentor and the protégé should agree on
the nature of their involvement under the agency's mentor/protégé
initiative. Each agency will monitor the process of the relationship. The
mentor and protégé relationship should be reduced to writing
and that agreement may include, but is not limited to, the following:
(1)
Identification of the developmental areas in which the
protégé needs guidance ;
(2)
The time period which the developmental guidance will
be provided by the mentor;
(3)
Name, address, phone and fax numbers, and the points
of contact that will oversee the agreement of the mentor and protégé;
(4)
Procedure for a mentor firm to notify the protégé
in advance if it intends to voluntarily withdraw from the program or terminate
the mentor protégé relationship;
(5)
Procedure for a protégé firm to notify
the mentor in advance if it intends to terminate the mentor protégé
relationship;
(6)
A mutually agreed upon timeline to report the progress
of the mentor protégé relationship to the state agency.
(h)
Each agency must notify its mentors and protégés
that participation is voluntary. The notice must include written documentation
that participation in the agency's Mentor Protégé Program is
neither a guarantee for a contract opportunity nor a promise of business;
but the Program's intent is to foster positive long-term business relationships.
(i)
State agencies may demonstrate their good faith under this
section by submitting a supplemental letter with documentation to the commission
with their HUB Report or legislative appropriations request identifying the
progress and testimonials of mentors and protégés that participate
in the agency's Program. In accordance with §111.26 of this title (relating
to HUB Coordinator Responsibilities) the agency's HUB Coordinator shall facilitate
compliance by its agency.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State, on March 30, 2000.
TRD-200002282
Ann Dillon
General Counsel
General Services Commission
Earliest possible date of adoption: May 14, 2000
For further information, please call: (512) 463-3960
Chapter 355.
MEDICAID REIMBURSEMENT RATES
Subchapter A. COST DETERMINATION PROCESS
Part 15.
TEXAS HEALTH AND HUMAN SERVICES COMMISSION