Historically Underutilized Business (HUB) Program
RRC HUB Mission Statement
The Railroad Commission of Texas (RRC) is dedicated to assisting Historically Underutilized Businesses (HUBs). It ensures equal procurement opportunities to HUBs by adhering to internal initiatives designed to maximize HUB participation. We also require that non-HUB prime contractors demonstrate that they have solicited bids from HUB subcontractors. In addition, the Commission is committed to helping vendors attain Texas Procurement and Support Services' (TPASS) HUB certification.
What is a Historically Underutilized Business (HUB)?
A HUB is a business that is at least 51% owned by a minority and/or American woman who is a resident of the state of Texas and a United States citizen.
The State of Texas HUB Program is designed to facilitate the participation of minority and women-owned businesses in state agency procurement opportunities. All state agencies, including universities, are required to make a good-faith effort to include HUBs in their procurement opportunities. The program is composed of various initiatives designed to produce full and equal participation by minority and women-owned businesses in the state’s procurement process.
Benefits of Becoming Certified as a State of Texas HUB
- HUB Certification is FREE OF CHARGE and is valid for up to 4 years if all eligibility requirements are met and maintained
- Increased exposure to state agencies and universities’ procurement processes
- Certified HUBs are listed in the State of Texas HUB Directory, which provides additional exposure to state agencies and their procurement processes. This also allows state agencies to document their spending with HUBs and gauge their progress and performance in meeting HUB expenditure goals.
Criteria 1 - Ethnicity, U.S. Citizenship, and Texas Residency
Individuals who are economically disadvantaged, and who have been historically underutilized because of their identification as members of the following groups are eligible for HUB certification, provided that all other criteria are met:
- Asian Pacific Americans
- Black Americans
- Hispanic Americans
- Native Americans
- American Women
- Service Disabled Veteran
Criteria 2 - Ownership
At least one or more persons meeting Criteria 1 must own 51% of the following:
- Assets and interest of all classes of stock
- Equitable securities
The business (i.e. sole proprietorship, partnership, corporation, limited (liability) partnership/company, joint venture) must also have been formed for the purpose of making a profit. Non-profit organizations are not eligible for HUB certification.
Note: Sole Proprietorships are required to be 100% owned and controlled by an individual meeting Criteria 1. In addition, each entity within a Joint Venture is required to be a HUB.
Criteria 3 - Active Participation, Control, and Proportionate Interest
A review of the business’ documentation must substantiate that the eligible HUB owners are able to make independent and unilateral business decisions (i.e. administrative activities, management personnel, negotiation and executions of contracts, financial transactions and agreements), which guide the future and destiny of the business. Absentee or titular ownership by the eligible HUB owners who do take an active role in controlling the business is not consistent with the HUB eligibility standards.
Criteria 4 - Principal Place of Business
A HUB's principal place of business must be located in the State of Texas.
All HUB eligibility requirements are defined in TX Govt Code, Title 10, Chapter 2161 and TX Administrative Code, Title 1, Part 5 Chapter 111 Sub Chapter B.
Mentor Protégé Program
RRC’s Mentor-Protégé Program is developed in accordance with Government Code (§) 2161.065 and Texas Administrative Code Title 1, Part 5, (§) 111.28 of Subchapter B.
The Administrative program is intended to foster positive long-term relationships between contractors/vendors and HUBs by facilitating a mentor-protégé relationship in the procurement areas of consideration, commodities, and/or services. The HUB Coordinator coordinates the program.
The objectives of the program are to:
- Foster positive long-term relationships between contractors/vendors and HUBs;
- Increase the ability of HUBs to contract with the Commission or to receive subcontracts under a Commission contract; and
- Increase the ability of HUBs to contract with other state agencies
Participation in the program is voluntary and is neither a guarantee for a contract opportunity nor a promise of business.
|Mentor||To be eligible, a prospective Mentor must submit a complete application. In addition, the Commission may consider whether the prospective Mentor:
|Protégé||To be eligible, a prospective Protégé must submit a complete application. In addition, the Commission may consider whether the prospective Protégé:
HUB Subcontracting Plan (HSP)
Before the agency solicits bid, proposals, offers or other applicable expressions of interest, contract documents of $100,000 or more shall determine whether subcontracting opportunities are probable under the contract:
If subcontracting opportunities are probable, each state agency's invitation for bids 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 HSP.
Each state agency shall make a good-faith effort to increase the contract awards for the purchase of good or services to HUBs based on rules adopted by the Commission to implement the disparity study described by TGC (§) 2161.002 [c].
The purpose of the HUB Program is to promote equal business opportunities for economically disadvantaged persons (as defined by TGC §2161) to contract with the State of Texas in accordance with the goals specified in the State of Texas Disparity Study. The HUB goals per TAC §111.13 are:
|Special Trade Construction||32.9%|
IF YOUR BID RESPONSE DOES NOT CONTAIN A HUB SUBCONTRACTING PLAN, YOUR RESPONSE SHALL BE REJECTED AS A MATERIAL FAILURE TO COMPLY WITH THE ADVERTISED SPECIFICATIONS.
- HSP Development and Good-Faith Effort Requirements:
- The respondent shall divide the contract work into reasonable lots or portions to the extent consistent with prudent industry practices.
- The respondent shall use the Texas Procurement and Support Services (TPASS) Centralized Master Bidders List (CMBL), the HUB Directory, and may use other Internet resources and directories as identified by the contracting agency to identify HUBs that perform 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 shall provide notice to three (3) or more HUBs that perform the type of work required for each subcontracting opportunity the respondent cannot complete with its own equipment, supplies, materials, and/or employees. In addition, the respondent shall provide notice of subcontracting opportunities to two (2) minority or women trade organizations or development centers to assist in identifying potential HUBs. The preferable method of notification to HUBs and minority or women trade organizations or development centers shall be in writing and, as applicable, should include:
- The scope of work;
- Information regarding the location to review plans and specifications;
- Information about bonding and insurance requirements;
- Information about required qualifications and specifications; and
- Identify a contact person
- Unless circumstances require a different time period that shall be specified by the contracting agency and documented in the agency's contract file, the respondent's subcontracting opportunity notice(s) must be provided to the potential HUB subcontractors, and minority or women trade organizations or development centers no less than seven (7) working days prior to the submission of the respondent's bid, proposal, offer, or other applicable expression of interest to the contracting agency.
- On forms provided by the contracting agency and prescribed by CPA, the respondent shall document the HUBs contacted for each subcontracting opportunity. The respondent should negotiate in good faith with qualified HUB vendors and not reject qualified HUBs who were the best-valued responsive bidder to their subcontracting opportunity.
- The respondent shall provide written justification of the selection process if a HUB subcontractor is not selected.
- Prior to contract award, the respondent shall provide the contracting agency with supporting documentation (phone logs, fax transmittals, electronic mail, etc.) to document their good faith effort in the development and submission of their HSP.
- Alternatives to Good Faith Effort Requirements (Applicable to Mentor Protégé Agreements and Professional Services Contracts Only)
- A respondent’s participation as a mentor in a State of Texas Mentor-Protégé Program and a commitment to use their protégé (must be a Texas-certified HUB) as a subcontractor to perform the subcontracting opportunity (ies) listed in its HSP (Texas Government Code, Chapter 2161.065) may constitute good-faith effort without performing the procedures listed in item 1. For additional information, please contact the HUB Coordinator for the contracting agency.
- A respondent who submits an HSP for a professional services contract that meets or exceeds Annual Procurement Utilization goals for Historically Underutilized Businesses (HUBs) as defined in Texas Administrative Code, §111.13, will be determined to have met the good faith effort requirement.
- (Applicable to Professional Services Contracts as defined by Texas Government Code 2254.)
- For additional information on HSP contact the HUB Coordinator listed below.
NOTE: The contracting agency does not endorse any company or individual identified on any listings/directories included or referenced herein. A complete list of State of Texas certified HUBs may be accessed via the Internet.
HUB Points of Contact
Michael Herman, CTPM, CTCM
HUB Officer/Purchaser V
Last Updated: 10/14/2019 10:20:47 AM