| (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 shall, before it solicits responses, 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) examine the scope of work to be performed under
the proposed contract and determine if it is likely that some of the
work may be performed by a subcontractor;
(B) check the HUB directory for HUBs that may be available
to perform the contract work; and
(C) consider whether subcontracting is probable for
only a subset of the work expected to be performed or the funds to
be expended under the contract.
(2) State agencies may consider additional sources
of information regarding the probability of subcontracting, including:
(A) information from other state agencies and local
governments; and
(B) information about past state contracts with similar
scopes of work.
(b) Requiring HUB subcontracting plans.
(1) If a state agency determines that subcontracting
opportunities are probable, the solicitation shall state that probability
and explicitly require that any response include a completed HUB subcontracting
plan to be considered responsive. The solicitation shall state the
applicable HUB utilization goal, and provide information on where
to find and how to complete the comptroller's HUB subcontracting plan
form.
(2) A state agency shall require HUB subcontracting
plans to be submitted with each response. If a state agency permits
responses to be submitted in parts, with deadlines for each part,
the solicitation shall specify which deadline applies to the HUB subcontracting
plan and shall not open responses until after the HUB subcontracting
plan is due.
(3) A state agency shall reject any response that does
not include a completed and timely HUB subcontracting plan due to
material failure to comply with Government Code, §2161.252(b).
(4) If a properly submitted HUB subcontracting plan
contains minor deficiencies, such as failure to sign or date the plan
or failure to submit already-existing evidence that a good faith effort
was completed, the state agency may allow the respondent to cure the
minor deficiency. A state agency may not allow a respondent to cure
material deficiencies, including completion of a good faith effort
after the response deadline (such as contacting minority trade organizations
or producing the statement of how the respondent intends to self-perform
the work that is required by subsection (d)(4) of this section).
(c) Completing a HUB subcontracting plan. The HUB subcontracting
plan shall consist of a completed form prescribed by the comptroller,
with attachments as appropriate.
(d) Demonstrating good faith in the development of
a HUB subcontracting plan. The HUB subcontracting plan must demonstrate
that the respondent developed it in good faith. For each part of the
work that the solicitation identified as a probable subcontracting
opportunity and each part of the work that the respondent actually
intends to subcontract, the respondent must demonstrate its good faith
development of a HUB subcontracting plan by a method described in
paragraphs (1)-(4) of this subsection.
(1) Solicitation Method. To complete the solicitation
method, the respondent shall comply with all requirements of this
clause.
(A) The respondent shall divide the work into reasonable
lots or portions consistent with prudent industry practices.
(B) The respondent shall notify, in writing, at least
two trade organizations or development centers that serve economically
disadvantaged persons, of the subcontracting opportunities that the
respondent intends to subcontract.
(C) The respondent shall notify, in writing, at least
three HUBs of the subcontracting opportunities that the respondent
intends to subcontract. The respondent shall provide the notice described
in this subclause to three or more HUBs per subcontracting opportunity
that provide the type of work required.
(D) The notices required by subparagraphs (B) and (C)
of this paragraph shall include the scope of work, information regarding
location to review plans and specifications, information about bonding
and insurance requirements, required qualifications, and other contract
requirements and identify a contact person.
(E) The respondent shall provide the notices required
by subparagraphs (B) and (C) of this paragraph at least seven working
days prior to submission of the response. Neither the day on which
the notice is sent nor the day on which the respondent submits its
response count as one of the required seven working days. A state
agency may determine that circumstances require a different time period
than seven working days but must notify potential vendors of the requirement
and document the justification in the contract file.
(F) The respondent shall submit documentation of having
provided the notices required by subparagraphs (B) and (C) of this
paragraph, including copies of relevant correspondence with the recipients,
with its HUB subcontracting plan.
(G) If the respondent selects a non-HUB business to
perform a subcontract instead of a HUB that bid for the same subcontract
work, the respondent shall include a written justification for the
selection in its HUB subcontracting plan.
(H) The respondent shall retain documentation of its
compliance with each aspect of the solicitation method and submit
it to the state agency upon request.
(2) All-HUB-Subcontractors Method. The respondent may
use the all-HUB-subcontractors method to demonstrate a good faith
effort for any subcontracting opportunity by submitting documentation
that 100% of subcontracting opportunities will be performed by HUBs.
(3) Meeting-or-Exceeding-HUB-Goal Method. The respondent
may use the meeting-or-exceeding-HUB-goal method to demonstrate a
good faith effort for any subcontracting opportunity by submitting
documentation that it will utilize one or more HUBs to perform subcontracts
with a total value that will meet or exceed the HUB utilization goal
identified by the procuring state agency in the solicitation.
(4) Self-performing Method. The respondent may use
the self-performing method to demonstrate a good faith effort for
any subcontracting opportunity by providing a statement of how it
intends to fulfill the entire contract, including each subcontracting
opportunity, with its own equipment, supplies, materials, and employees.
The respondent shall provide the following if requested by the procuring
state agency:
(A) evidence of existing staffing to meet contract
objectives;
(B) monthly payroll records showing employees 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.
(5) Subcontracting to a HUB Protégé.
If the respondent is a mentor in a mentor-protégé agreement
that is registered with the comptroller under §20.298 of this
title (relating to Mentor-Protégé Program), the respondent
may demonstrate a good faith effort for any subcontracting opportunity
by subcontracting the work to its protégé.
(6) The respondent shall use the HUB directory to identify
HUBs. If the respondent uses any alternate source, it accepts the
risk that its HUB subcontracting plan may be noncompliant due to inaccurate
HUB certification information.
(e) Accepting or rejecting the HUB subcontracting plan.
The state agency shall review the respondent's HUB subcontracting
plan prior to award. The HUB subcontracting plan shall become a provision
of the state agency's contract. The agency and contractor may agree
to revise the submitted HUB subcontracting plan in accordance with
subsection (b)(4) of this section. State agencies shall review the
documentation submitted by the respondent to determine if the respondent
made a good faith effort. If the state agency determines that a HUB
subcontracting plan was not developed in good faith or the good faith
effort was incomplete, the state agency shall reject the response.
The state agency shall document the reasons for rejection in the contract
file.
(f) Contractor records. The contractor shall maintain
records documenting its compliance with the HUB subcontracting plan.
(g) Progress assessment reports. The contractor shall
submit a progress assessment report to the state agency with each
invoice, in the format required by the comptroller. A state agency
may, at its option, allow electronic submissions of the compliance
report required by this subsection so long as the electronically-submitted
compliance reports are in the format and contain all information required
by the comptroller. The progress assessment report shall be a condition
for payment.
(h) Monitoring HUB subcontracting plan compliance.
(1) During the term of the contract, the state agency
shall monitor the contractor's subcontracting by reviewing each HUB
progress assessment report to determine whether it complies with the
HUB subcontracting plan. The state agency shall perform monitoring
at intervals corresponding to invoice submissions. The state agency
shall determine if the value of the payments to HUBs meets or exceeds
the HUB subcontracting plan, and whether the contractor is utilizing
only subcontractors named in the HUB subcontracting plan. The state
agency shall document the contractor's performance in the contract
file.
(2) To determine if the contractor is complying with
the HUB subcontracting plan, the state agency may consider 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
resources needed to complete the work; and
(C) any other information the state agency considers
relevant.
(3) If the contractor fails to comply with the HUB
subcontracting plan, the state agency shall notify the contractor
of the deficiencies and give the contractor an opportunity to submit
documentation and explain why its failure to fulfill the HUB subcontracting
plan should not be attributed to a lack of good faith effort by the
contractor. Any deficiencies identified by the state agency must be
rectified by the contractor prior to the next reporting period.
(4) The state agency shall report failure to comply
with the HUB subcontracting plan to the comptroller in accordance
with §20.509 of this title (relating to Vendor Performance Reporting).
If the state agency determines that the contractor failed to implement
the HUB subcontracting plan in good faith, the state agency may, in
addition to any other remedies, bar the contractor from further contracting
opportunities with the agency. The state agency may also report nonperformance
to the comptroller for consideration for possible debarment pursuant
to Government Code, §2155.077. A debarment for failure to implement
the HUB subcontracting plan may be for a period of no more than five
years.
(i) Amending the HUB subcontracting plan.
(1) Before the contractor performs or subcontracts
any part of the contract in a manner that is not consistent with its
HUB subcontracting plan, it shall submit an amended HUB subcontracting
plan to the state agency for its review and approval. The contractor
shall demonstrate good faith by complying with the requirements of
subsection (d) of this section in the development of the amended HUB
subcontracting plan. Failure to comply with this section may be deemed
a breach of the contract subject to any remedies provided by Government
Code, Chapter 2161 and other applicable law.
(2) The state agency may approve requested changes
to the HUB subcontracting plan by amending the contract. The reasons
for amending the HUB subcontracting plan shall be recorded in the
contract file.
(3) If a state agency expands the scope of work through
a change order or contract amendment, including a renewal that expands
the scope of work, it shall determine if the additional scope of work
contains additional probable subcontracting opportunities. If the
state agency determines probable subcontracting opportunities exist,
the state agency shall require the contractor to submit for its review
and approval an amended HUB subcontracting plan for the additional
probable subcontracting opportunities. The contractor shall demonstrate
good faith by complying with the requirements of subsection (d) of
this section in the development of the amended HUB subcontracting
plan.
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