1 TAC §§111.11, 111.13, 111.14, 111.26, 111.27
The General Services Commission adopts amendments to §§111.11,
111.13, and adopts new §§111.14, 111.26, and 111.27 regarding the
Historically Underutilized Business Program (HUB). The title of Chapter 111,
Subchapter B, is adopted with changes to the proposed title of Subchapter
B; and the amendments to §§111.11, 111.13, and new §§111.14,
111.26, and 111.27 are adopted with changes to the proposed text as published
in February 4, 2000, issue of the
Texas Register
(25 TexReg 648).
The amendments and new rules will ensure compliance with the requirements
of S.B. 178, 76th Leg. (1999) codified under the Texas Government Code, Chapter
2161, regarding the HUB policy statement, procurement utilization goals, agency
determination of subcontracting opportunities, HUB subcontracting plans, HUB
coordinator responsibilities and the agency forum program.
The amendments and new rules will provide a streamlined method for securing
more goods and services from HUB vendors who are compliant with Texas Government
Code, Chapter 2161.
Four written comments were received from the Lockwood, Andrews, & Newman,
Inc., Mexican American Legislative Caucus; Texas A&M University, and the
University of Texas System regarding the adoption of amendments to HUB Rules.
All written comments received requested editorial changes to the proposed
HUB Rules. In some instances, the General Services Commission agreed with
the editorial recommendations to clarify language and improve readability.
The language in the rules has been changed accordingly to reflect the requested
recommendations.
Lockwood, Andrews, & Newman, Inc.Comments: Paragraph 111.14 (a) (2):
The new procedure requires that all AE firms proposing on a state agency solicitation
submit a completed HUB subcontracting plan with their proposals. On a typical
state agency solicitation for AE services there will be as many as 15 to 30
proposals. The new requirement means that each of the 15 to 30 firms prepare
and submit a detailed subcontracting plan rather than just the selected firm
as presently required. This greatly increases the cost of proposals for any
given project, thus raising overhead costs for AEs and ultimately increasing
the cost of services to the state agencies. We recommend that the proposing
firms be required to state that they will comply with the state regulations
regarding HUB participation and that they name the HUB firms they intend to
utilize on the work, but that only the selected firm be required to prepare
the detailed subcontracting plan. Another benefit of waiting until after selection
is that the detailed scope of a design project is usually not well defined
when the solicitation is issued, therefore the final responsibilities of the
HUB firms cannot be accurately predicted. Allowing the selected firm to defer
producing the subcontracting plan until after the scope is better defined
will greatly reduce the necessity of revising the plan later.
Response: Staff disagrees with comments. Texas Government Code, §2161.252
requires that state agencies determine the probability of subcontracting in
all contracts of $100,000 or more. When subcontracting opportunities are determined,
state agencies are required to include a historically underutilized business
subcontracting plan in the contract. A bid, proposal, offer, or other applicable
expression of interest for the contract must contain a plan to be considered
responsive. In discussions with the authors of SB 178, 76th Leg. (1999) the
subcontracting plan should include a complete listing of all subcontractors
and their respective roles and dollar values prior to bid openings. Compliance
with the submitted recommendation (above) would result in noncompliance of
the current statutory requirements of SB 178.
Comment: Paragraph 111.14 (c): The new procedure requires that if any change
to the subcontracting plan becomes necessary, the entire plan must be revised
and resubmitted. In the design professions, changes to subcontracting plans
are inevitable. As the scope of the project develops, changes in percentages
of the various elements of the design are required. Thus, it should be recognized
that changes to the subcontracting plan will occur, and ease of these changes
should be facilitated. Again, the overall HUB percentage should be required
to be met, but with as little harassment as possible.
Response: Staff disagrees with comments. Texas Government Code, §2161.253
mandates that when a state agency requires a historically underutilized business
subcontracting plan, it is a provision of the contract. The plan should be
executed by the contractor as submitted in the bid, proposal, offer, or other
applicable expression of interest for the contract. The contractor/vendor
is required to make good faith efforts to implement the plan. To the extent
that subcontracts are not contracted for as originally submitted in the historically
underutilized business subcontracting plan, the contractor/vendor shall report
to the state agency all the circumstances that explain the situation and describe
the good faith efforts made to find and subcontract with another historically
underutilized business. Additionally, Section 111.14 (c) reflects staff's
acknowledgement that changes to subcontracting plans will occur during the
term of a contract. Proposed rules provided for documentation of the required
changes, with documentation of reasons for changes, as well as continued compliance
with "good faith efforts" by the contractor in solicitation of bids from HUBs
and other subcontractors. There is no allowance for "changes" to subcontracting
plans between the time of bid submission and the award of the contract.
Mexican American Legislative Caucus Comments: HUB COORDINATORS (Section
111.26): Clarify that HUB Coordinators must not report to the purchasing director
and would preferably report to the executive director or agency head. Language
should be strengthened in this regard.
Response: Section 111.26 indicates the HUB Coordinator advises and assists
the agency's executive director and staff.
Comment: SUBCONTRACTING (Section 111.14): Identify more clearly for purchasers,
when they should look for subcontracting opportunities and how the subcontracting
plans should be utilized as part of the contract.
Delineate requirements for subcontracting plans. If a general contractor
does not fulfill his subcontracting plan, the contract is subject to either
non-payment or removal from the CMBL.
Indicate that the general contractor must send notices out to the HUBs
within the industry. In the past, general contractors have been known to send
fax notices for drywall to a random list of HUBs that could include manufacturers
or engineers.
If a general contractor is not familiar with the databases available to
them, the purchaser must offer to demonstrate these tools either personally
or via telephone.
When vendors can not be found though these means, contractors will be encouraged
to seek qualified vendors via minority business councils, chamber organizations
or trade associations.
Response: Staff agrees with comments. However, no additional changes to
the rules are necessary. Sections 111.13 and 111.14 addresses the methodology
that agencies should administer to determine the probability for subcontracting,
identification of potential HUB subcontractor/vendors, the solicitation process/notices
to HUBs, compliance requirements, search/selection of HUBs on the CMBL/HUB
Directory, and the use of other programs that certify minorities and women.
Section 111.14 (d), also relates to determining contractor/vendor contract
compliance, provides agencies the authority to take action when a contractor/vendor
breaches a contract and to report noncompliance and nonperformance under the
provisions of the contract. 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 GSC in
accordance with Chapter 113, Subchapter F, relating to Vendor Performance
and Debarment Program. To assist agencies with the implementation of the new
HUB Rules, GSC's staff is planning to conduct training to provide clarification
of the proposed HUB Rules.
The Texas A&M University Comments: In discussions with numerous general
contractors and architectural/engineering firms, the general sense of their
opinions runs from dissatisfaction on the ever-expanding bureaucratic concept
of the HUB program to absolute anger at the additional cost and time this
"new version" of the HUB program will take. They feel, at the very least,
it is an "annoying distraction" to their jobs as designers and builders of
state facilities that are costing much more than the general public is consciously
aware of because of the additional burden placed on them by the HUB program.
As business people who "look at the bottom-line," they must pass these additional
costs on through their bid proposals. The actual amounts vary, but numbers
have run from 10's of thousands to as high as 30% of the small to medium size
projects ($3 - $5 million projects).
These procedures appear to have been written with very little consciousness
and understanding of the construction industry. Several of the following comments
will indicate this in specific terms. Since the dollars spent on construction
for the state is a very sizable amount, probably much higher than the commodity
purchases, it would seem justified to more clearly account for the impact
to that industry than the industries making up the balance of state expenditures.
The "tail wagging the dog" principle is well entrenched in the general premise
of these procedures.
The topical titles of most of the subsection (i.e. 111.14(a) Requirement
for HUB subcontracting plans) are not sentences and should not appear in the
text with a period nor should the text of the paragraph following it appear
on the same line with the title.
Response: The rules have been drafted to conform with the new statutory
program design. Construction procurements were not singled out by the legislature
for different treatment from commodity or service procurements. The catchlines
which the commenter refers to as "topical titles" are brief headings that
describe the contents of a subdivision and conform with Texas Register formatting
requirements.
Comment: Throughout the document, the term "HUB subcontracting plan" is
used, yet in general discussions with members of the GSC staff and the focus
group preparing this document, a sense that the plan is to include all subcontractors
is rather prevalent. There is no wording in the current HUB law nor in Senate
Bill 178 that would require all subcontractors be named on this plan. These
procedures need to be abundantly clear as to what the plan is to address on
the HUB subcontractors.
As a continuation of the premise of naming subcontractors, each of the
firms I have had discussions with indicate very strongly that managing and
administering a subcontract cannot be achieved if they must ask permission
from the state agency at every turn. It will create time problems and cause
very real increased costs to projects if they are not allowed the authority
to manage their subs in an effective and efficient manner. Is the state willing
to pay for these "extras" and will late project completions caused by these
delays be tolerated by the using agencies and the Legislature?
The procedures are not clear on the subject of "adjusting a HUB subcontracting
plan prior to award of contract." For example, if a plan is submitted at the
proper time with a proposal, and for the most part appears to demonstrate
a good faith effort but is lacking a substantiating document or does not have
particular sub-entry included, can these "deficiencies" (minor or major) be
"corrected or amplified" to allow continued evaluation of the bid/proposal?
If the answer is, "No" the state will be placed in the position numerous times
of throwing out the otherwise lowest cost bids/proposals. This factor alone
could cost some very large dollars. Solution: allow "adjusting or tweaking"
of a properly submitted plan to correct or amplify deficiencies found by the
contracting state agency "prior to award of contract." Don't throw the baby
out with the bath water!
Response: Staff disagrees with comments. The requirement to identify the
HUB subcontractors is currently being administered under the current HUB rules, §§111.13
and 111.14 which were originally adopted in October 1995. Complying with the
submitted recommendation (above) would result in noncompliance of the current
statutory requirements of Texas Government Code, §2161.253, which gives
the GSC authority to promulgate rules regarding HUB Subcontracting Plans.
The good faith effort requirements include the contractor/vendor identifying
the subcontractors that were given an opportunity to bid on subcontracting
opportunities, as identified by the agency, and subcontractor(s) that will
be used as part of the plan. These requirements must be administered in order
for the bid, proposal, offer, or other applicable expression of interest for
the contract to be responsive and in compliance with the contract provisions.
Comment: There are two areas in the documents that, if enforced in the
word-for-word literal sense, will cause many business firms and state agencies
rather extensive problems. The first is in 111.13(d) line 3 and companion
wording in 111.14(b)(3) line 7. The assumption of each of these references
is that the agency (111.13 d) and the potential contractor/vendor (111.14(b)(3))
has to perform each of the several activities contained in a listing in those
subsections. In the real world, every situation is different and the circumstances
for bidding opportunities are different each time, therefore, rather than
make these checklists an absolute requirement per the current and proposed
wording, it should be "softened somewhat" by changing the wording to "may
include but not limited to the following." This will still provide the agencies
and the potential contractor/vendors a "go-by checklist" for a good faith
effort without having to follow it verbatim or risk having a bid or even a
contract nullified.
Response: Staff disagrees with comments. The recommended items in both
subsections of 111.13(d) and 111.14(b)(3) were recommended by the discussion
group that assisted in the development of the HUB Rules. The enumerated listing
in each subsection is available to assist agencies in understanding the minimum
requirements that should be included with an agency supplemental letter and
in determining the agency's good faith effort.
Comment: The suggested changes to these specific subsections are contained
in the comments and suggestions, which follow.
The second area of major concern relates to the wording in 111.14(c). This
item deals with modifications to a plan for a contract which is being performed.
The problem relates to any need for modifying the subcontractors listed on
a plan for any reason. It states that the contractor must revert back to all
the steps in 111.14(C) in order to make a change. This again will present
an untenable requirement on the contractor, costing many dollars and, in many
cases, delaying the performance of the contract. What happens if a sub backs
out on a contractor a couple of days before the sub's work is to begin? This
could cost the contractor time and money to slow or stop the project while
he fulfilled the steps in 111.14(C). Keep in mind that each potential subcontractor
must be given either the (5) day notification period as stated in this document
before price proposals are due or the revision to (10) days as recommended
in these comments.
Response: Staff disagrees with comments. The Texas Government Code, §2161.253
requires that the contractor/vendor shall report to the agency the circumstances
that explain the facts and describe the good faith efforts made to find and
subcontract with another historically underutilized business. Under the good
faith effort requirements, the contractor/vendor must identify the businesses,
which were solicited for subcontracting opportunities. The contractor/vendor
may use another HUB that is already identified on the solicitation listing.
The University of Texas System Comments: Recommended change to the title
of Subchapter B to read "Historically Underutilized Business Program." The
existing title does not capture the full scope, or major thrust of the program
which is considerably broader.
Response: Staff agrees with comment. The title of Subchapter B has been
changed to reflect "Historically Underutilized Business Program" and the text
within the rules referencing the title of Subchapter B has been changed accordingly.
Comment: In §111.14(c), change the last two sentences to read as follows:
"The state agency should 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." Amendments for very large
contracts, without change order procedures, can be very cumbersome. Other
matters get brought to the table. It is accepted practice to effect such changes
by written approval, thereby avoiding the hidden pitfalls of a formal amendment.
Response: Staff agrees with comment and language in §111,14(c) has
been changed as recommended.
Comment: In §111.26(b), change to read as follows: "To demonstrate
good faith effort, an agency shall provide ..... current operations and budget
to effectively promote ... agency's executive director. To assist ... include,
but are not limited to, facilitating compliance with the agency's good faith
effort criteria ... compliance". This would improve clarity of the paragraph.
Response: Staff agrees with comment and language in §111.26(b) has
been changed as recommended.
Comment: In §111.27(b)(1), change as follows: "design its own forum
program and model the program, to the extent appropriate, following the format
established by the commission".
Response: Staff agrees with comment and language in §111.27(b)(1)
has been changed as recommended.
The amendments and new rules are adopted under the Texas Government
Code, Title 10, Subtitle D, Chapter 2161, §2161.002, which provides the
General Services Commission with the authority to promulgate rules under this
Code.
§111.11.Policy and Purpose.
It is the policy of the commission to encourage the use of historically
underutilized businesses (HUBs) by state agencies and to assist agencies in
the implementation of this policy through race, ethnic, and gender-neutral
means. The purpose of this program is to promote full and equal business opportunities
for all businesses in state contracting in accordance with the goals specified
in the State of Texas Disparity Study. Sections 111.11 through 111.27 of this
title (relating to the Historically Underutilized Program) describe the minimum
steps and requirements to be undertaken by the commission and state agencies
to fulfill the state's HUB policy.
§111.13.Annual Procurement Utilization Goals.
(a)
In accordance with §111.11 of this title (relating
to Policy and Purpose) and the Texas Government Code, Sections 2161.181 and
2161.182, each state agency shall make a good faith effort to utilize HUBs
in contracts for construction, services (including professional and consulting
services) and commodities purchases. Each agency may achieve the annual procurement
goals by contracting directly with HUBs or indirectly through subcontracting
opportunities.
(b)
Each state agency shall make a good faith effort to assist
HUBs in receiving a portion of the total contract value of all contracts that
the agency expects to award in a fiscal year in accordance with the following
percentages:
(1)
11.9% for heavy construction other than building contracts;
(2)
26.1% for all building construction, including general
contractors and operative builders contracts;
(3)
57.2% for all special trade construction contracts;
(4)
20% for professional services contracts;
(5)
33% for all other services contracts; and
(6)
12.6% for commodities contracts.
(c)
Each state agency shall make a good faith effort to meet
or exceed the goals outlined in subsection (b) of this section. The percentage
goals established in subsection (b) are overall annual procurement goals for
each state agency applicable to the total annual dollar amount of an agency's
contracts for each of the specific types of contracts. It may not be practicable
to apply these goals to each contract. For each contract, state agencies may
set higher or lower procurement goals than those outlined in subsection (b)
of this section. Agencies may consider HUB availability, HUB utilization,
geographical location of the project, the contractual scope of work, or other
relevant factors. By implementing the following procedures, an agency shall
be presumed to have made a good faith effort:
(1)
prepare and distribute information on procurement procedures
in a manner that encourages participation in state contracts by all businesses;
(2)
divide proposed requisitions into reasonable lots
in keeping with industry standards and competitive bid requirements;
(3)
where feasible, assess bond and insurance requirements
and design requirements that reasonably permit more than one business to perform
the work;
(4)
specify reasonable, realistic delivery schedules consistent
with an agency's actual requirements;
(5)
ensure that specifications, terms, and conditions
reflect an agency's actual requirements, are clearly stated, and do not impose
unreasonable or unnecessary contract requirements;
(6)
provide potential bidders with referenced list of
certified HUBs for subcontracting;
(7)
determine whether specific agencywide goals are appropriate
under the Disparity Study, as some HUB groups have not been underutilized
within applicable contracting categories and should not be included in the
HUB goals for that category;
(8)
identify potential subcontracting opportunities in
all contracts and require a HUB subcontracting plan for contracts of $100,000
or more, where such opportunities exist, in accordance with the Texas Government
Code, Chapter 2161, Subchapter F, § 2161.251; and
(9)
seek HUB subcontracting in contracts that are less
than $100,000 whenever possible.
(d)
A state agency may also demonstrate 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, including, but not limited to the following, as prescribed by the
commission:
(1)
identifying the percentage of contracts awarded to women
and/or minority-owned businesses that are not certified as HUBs;
(2)
demonstrating that a different goal from that identified
in subsection (b) of this section was appropriate given the agency's types
of purchases;
(3)
demonstrating that a different goal was appropriate
given the particular qualifications required by an agency for its contracts;
(4)
demonstrating that a different goal was appropriate
given that graduated HUBs cannot be counted toward the goal; or
(5)
demonstrating assistance to noncertified HUBs in obtaining
certification with the commission.
§111.14.Subcontracts.
(a)
Requirement for HUB subcontracting plans. In accordance
with the 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.
(1)
State agencies shall use the following steps in making
the determination of whether subcontracting opportunities are probable under
the contract:
(A)
Use the HUB participation goals in §111.13 of this
title (relating to Annual Procurement Utilization Goals);
(B)
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;
(C)
Additionally, 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 or other purchase solicitation documents
for construction, professional services, other services, and commodities for
$100,000 or more shall state that probability and require a HUB subcontracting
plan. Accordingly, potential contractor/vendor responses that do not include
a completed HUB subcontracting plan shall be rejected as a material failure
to comply with advertised specifications in accordance with §113.6 (a)
of this title (relating to Bid Evaluation and Award). The plan shall include
goals established pursuant to §111.13 of this title (relating to Annual
Procurement Utilization Goals).
(b)
Development and evaluation of HUB subcontracting plans.
A state agency shall require a potential contractor vendor to state whether
it is a Texas certified HUB. Potential contractors/vendors shall follow, but
are not limited to, procedures in subsection (b)(1) of this section when developing
the HUB subcontracting plan. The HUB subcontracting plan shall include the
form provided by the agency identifying the subcontractors that will be used
during the course of the contract, the expected percentage of work to be subcontracted,
and the approximate dollar value of that percentage of work. The potential
contractor/vendor shall provide all additional information required by the
agency.
(1)
Evidence of good faith effort in developing a HUB subcontracting
plan 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 work that the potential contractor/vendor
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 contractor's/vendor's bid. The potential contractor/vendor shall provide
potential HUB subcontractors reasonable time to respond to the potential contractor's/vendor'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. The potential contractor/vendor shall effectively use the commission's
Centralized Master Bidders List, the HUB Directory, Internet resources, and
other directories as identified by the commission or agency when searching
for HUB subcontractors. Contractors/Vendors may rely upon 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 perform all or select elements of the HUB subcontracting plan. The
potential contractor/vendor shall provide the notice described in this subsection
to three or more HUBs that perform the type of work required. Upon request,
the potential contractor/vendor shall provide official written documentation
(i.e. phone logs, fax transmittals, etc.) to demonstrate compliance with the
notice required in this subsection.
(C)
Provide written justification of the selection process,
if a non HUB subcontractor is selected through means other than competitive
bidding, or a HUB bid is the best value responsive bidder to a competitive
bid invitation, but is not selected.
(D)
Advertise HUB subcontracting opportunities in general circulation,
trade association, and/or minority/woman focus media concerning subcontracting
opportunities.
(E)
Encourage a selected noncertified minority or woman owned
business subcontractor to apply for certification by the commission in accordance
with the procedures set forth in §111.17 of this title (relating to Certification
Process).
(2)
If the contract is a lease contract, the lessor
shall comply with the requirements of this section from and after the occupancy
date provided in the lease, or such other time as may be specified in the
invitation for bid for the lease contract.
(3)
In making a determination whether a good faith effort
has been made in the development of the required HUB subcontracting plan,
a state agency shall require the potential contractor/vendor to submit supporting
documentation explaining in what ways the potential contractor/vendor has
made a good faith effort according to each criterion listed in subsection
(b)(1) of this section. The documentation shall include at least the following:
(A)
Whether the potential contractor/vendor divided the contract
work into reasonable lots or portions consistent with prudent industry practices.
(B)
Whether the potential contractor/vendor notices contain
adequate information about bonding, insurance, the availability of plans,
the specifications, scope of work, and other requirements of the contract
to three or more qualified HUBs allowing reasonable time for HUBs to participate
effectively.
(C)
Whether the potential contractor/vendor negotiated in good
faith with qualified HUBs, not rejecting qualified HUBs who were also the
best value responsive bidder.
(D)
Whether the potential contractor/vendor documented reasons
for rejection of a HUB or met with the rejected HUB to discuss the rejection.
(E)
Whether the potential contractor/vendor advertised in general
circulation, trade association, and/or minority/women focus media concerning
subcontracting opportunities.
(F)
Whether the potential contractor/vendor assisted non-certified
HUBs to become certified.
(4)
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. No changes shall be made to an accepted subcontracting
plan prior to its incorporation into the contract. State agencies shall review
the supporting documentation submitted by the potential contractor/vendor
to determine if a good faith effort has been made in accordance with this
section and the bid specifications. 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 bid or other response shall be rejected. The
reasons for rejection shall be recorded in the procurement file.
(5)
If the potential contractor/vendor can perform all
the subcontracting opportunities identified by the agency, a statement of
the potential contractor's/vendor's intent to complete the work with its employees
and resources without any subcontractors will be submitted with the potential
contractor's/vendor's bid, proposal, offer, or other expression of interest.
If the potential contractor/vendor 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 non-performance 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).
(c)
Submission, review and determination of changes to an approved
subcontracting plan during contract performance. If at any time during the
term of the contract, a contractor/vendor desires to make changes to the approved
subcontracting plan, such 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
(b) of this section 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.
(d)
Determining contractor/vendor contract compliance. 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 periodically and in the format required by the contract
documents. During the term of the contract, the state agency shall determine
whether 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.
(1)
In determining whether 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.
(C)
Whether documentation or information was provided that
included potential changes in the scope of contract work.
(2)
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).
(3)
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.
§111.26.HUB Coordinator Responsibilities.
(a)
In accordance with Texas Government Code, §2161.062(e),
state agencies with biennial budgets that exceed $10 million shall designate
a staff member to serve as the Historically Underutilized Business (HUB) Coordinator
for the agency during the fiscal year. The HUB coordinator will advise and
assist agency executive directors and staff in complying with the requirements
of Chapter 111, Subchapter B of this title (relating to the Historically Underutilized
Business Program), the Texas Government Code, §§321.013, 2101.011,
and the Texas Government Code, Chapter 2161.
(b)
To demonstrate good faith effort, an agency shall provide
the HUB coordinator with necessary and sufficient resources from its current
operations and budget to effectively promote the achievement of all the responsibilities
of the HUB coordinator. The HUB coordinator will assist its agency in the
development of the agency's procurement specifications, HUB subcontracting
plans, and evaluation of contracts for compliance. The HUB coordinator should
be identified in a responsive role that reports, communicates, and provides
information to the agency's executive director. To assist state agencies and
the commission with HUB compliance, the duties and responsibilities of HUB
coordinators include, but are not limited to, facilitating compliance with
the agency's good faith effort criteria, HUB reporting, contract administration,
and marketing and outreach efforts for HUB participation. The commission may
assist agencies, upon request, to identify other responsibilities of a HUB
coordinator for compliance.
§111.27.HUB Forum Programs for State Agencies.
(a)
In accordance with Texas Government Code, §2161.066,
the commission shall design a program of forums in which historically underutilized
businesses are invited by state agencies to deliver technical and business
presentations that demonstrate their capability to do business with the agency:
(1)
to senior managers and procurement personnel at state agencies
that acquire goods and services of a type supplied by the historically underutilized
businesses; and
(2)
to contractors/vendors with the state who may be subcontracting
for goods and services of a type supplied by the historically underutilized
businesses.
(b)
The forums shall be held at state agency offices. Each
agency with a biennial appropriation exceeding $10 million shall participate
in the forums by sending senior managers and procurement personnel to attend
relevant presentations. The agency will inform their contractors/vendors about
presentations relevant to subcontracting opportunities for HUBs and small
businesses. The commission and each agency that has a HUB coordinator shall:
(1)
design its own forum program and model the program, to
the extent appropriate, following the format established by the commission;
(2)
sponsor presentations by HUBs at the agency;
(3)
advertise the forums in appropriate trade publications
to target HUBs; and
(4)
identify and invite HUBs to make marketing presentations
on the types of goods and services they provide.
(c)
The agency's forum programs may include, but are not limited
to, the following initiatives:
(1)
providing marketing information that will direct HUBs to
key staff within the agency;
(2)
requesting other state agencies to assist in the preparation
and planning of the forum when necessary;
(3)
informing HUBs about potential contract opportunities
and future awards; and
(4)
preparing an annual report of each sponsored forum.
This agency hereby certifies that the adoption has been
reviewed by legal counsel and found to be a valid exercise of the agency's
legal authority.
Filed with the Office of
the Secretary of State on March 30, 2000.
TRD-200002277
Ann Dillon
General Counsel
General Services Commission
Effective date: April 19, 2000
Proposal publication date: February 4, 2000
For further information, please call: (512) 463-3960
1 TAC §111.14
The General Services Commission adopts the repeal of Title
1, T.A.C., Chapter 111, §111.14 concerning subcontracts. The repeal is
being adopted without changes to the proposal as published in the February
4, 2000, issue of the
Texas Register
(25 TexReg
651). The text will not be republished.
The repeal of §111.14 is adopted in order to adopt new §111.14
which contains language that is compliant with amendments to the Texas Government
Code, Chapter 2161, Subchapter F (Subcontracting) enacted by S.B. 178, 76th
Leg. (1999).
The repeal of §111.14 will delete obsolete language and allow for
the creation of new and more efficient rules relating to the Texas Government
Code, Chapter 2161, Subchapter F.
No comments were received regarding the repeal of §111.14.
The repeal is adopted under the Texas Government Code, Title
10, Subtitle D, Chapter 2161, §2161.002, which provides the General Services
Commission with the authority to promulgate rules under this Code.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on March 30, 2000.
TRD-200002278
Ann Dillon
General Counsel
General Services Commission
Effective date: April 19, 2000
Proposal publication date: February 4, 2000
For further information, please call: (512) 463-3960