HSC OP: Historically Underutilized Businesses
PURPOSE: The purpose of this Health Science Center Operating Procedure (HSC OP) is to establish the guidelines and outline the procedures for the utilization of Historically Underutilized Businesses (HUB) for the purchases of goods and services by The Texas A&M University System Health Science Center (the "HSC"). This HSC OP shall apply to all purchases of goods and services regardless of source of funds used for payment.
It is the policy of The Texas A&M University System Health Science Center to promote full and equal opportunity for all businesses to supply the goods and services needed to support mission, administrative, and logistical operations of the A&M System HSC Administration and component institutions in accordance with the goals specified in the State of Texas Disparity Study:
- 11.9% for heavy construction other than building contracts;
- 26.1% for all building construction, including general constructors and operative builders contracts;
- 57.2% for all special trade construction contracts;
- 20% for professional services contracts;
- 33% for all other services contracts; and
- 12.6% for commodities contracts.
The A&M System HSC Administration and component institutions commit to a good faith effort to increase purchases from and contract awards to Historically Underutilized Businesses (HUB) consistent with the state's goals for HUB participation and overall economic development.
As public entities, the A&M System HSC Administration and component institutions have a compelling interest to involve qualified HUBs in procurement contracts and transactions. To meet that obligation, the A&M System HSC and component institutions CEOs shall establish and maintain procurement systems and procedures that are nondiscriminatory with respect to race, color, religion, sex, or national origin.
Pursuant to the stated purpose, the following guidelines and related rules of the Texas Procurement and Support Services (TPASS) Texas Administrative Code Chapter 111 and Texas Government Code Chapter 2161 relating to the HUB Program, The Texas A&M University System Policies 25.06 and 25.06.01, and Texas A&M University Policy 25.99.02.M1 Purchasing Procedures are hereby followed.
This operating procedure applies to acquisition of specified commodities, professional and other services, and construction services, by the A&M System HSC Administration and component institutions, regardless of funding source (treasury or non-treasury funds).
- "Historically Underutilized Business" means a business enterprise, of a category defined in C.3 below, with its principal place of business in Texas and that does not exceed specified size standards, that is formed for the purpose of making a profit. The business enterprise must be majority-owned by one or more persons who: (a) are members of Economically Disadvantaged Groups who suffer the effects of discriminatory practices due to their identification as members of such groups, and (b) have a proportionate interest and demonstrate active participation in the control, operation, and management of the enterprise's affairs.
- "Economically Disadvantaged Groups" mean and include:
- Black Americans - includes persons having origins in any of the Black racial groups of Africa;
- Hispanic Americans - includes persons of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish or Portuguese culture or origin, regardless of race;
- American Women - includes all women of any ethnicity except American Women specified in (a), (b), (d), and (e) of this subparagraph;
- Asian Pacific Americans - includes persons whose origins are in 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
- Native Americans - includes persons who are American Indians, Eskimos, Aleuts, or Native Hawaiians.
- "Categories of Historically Underutilized Business Enterprises" mean and include:
- A corporation 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 in C.2 above;
- A sole proprietorship that is 100% owned by a person described in C.2 above;
- A partnership in which at least 51% of the assets and interests in the partnership are owned by one or more persons described in C.2 above;
- A joint venture in which each entity in the joint venture is an historically underutilized business;
- A supplier contract between an historically underutilized business and a prime contractor 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; or
- A business, other than described in subparagraphs (a) through (e) above, which is a legally recognized business organization under the laws of the State of Texas, provided that at least 51% of the assets and interest and 51% of any classes of stock and equitable securities are owned by one or more persons described in C.2 above.
- "Commodities" mean materials, supplies, or equipment.
- "Professional Services" mean services procured under provisions of the Professional Services Procurement Act (Sections 2254.001 - 2254.005, Texas Government Code).
- "Other Services" mean all services, other than construction and professional services, including consulting services procured under provisions of Sections 2254.021 - 2254.040, Texas Government Code.
- "Construction" means construction, improvement, maintenance, or repair of buildings, roads, highways, or grounds.
- "Treasury Funds" are funds maintained in the State treasury and disbursed through the State Comptroller's Office for the A&M System HSC Administration, component institutions, and centers.
- "Non-Treasury Funds" are all funds of the A&M System HSC Administration, component institutions, and centers that are not deposited in the State treasury.
- THE TEXAS A&M UNIVERSITY SYSTEM HEALTH SCIENCE CENTER ADMINISTRATION COMPONENT INSTITUTION RESPONSIBILITIES
- The Texas A&M University System Health Science Center Administration
- The President, with support from and delegation to the Vice President for Finance and Administration, exercises oversight responsibility for implementation of procedures outlined herein by the A&M System HSC Administration and component institutions. The President is responsible for policy and procedural implementation in the A&M System HSC.
- The Vice President for Finance and Administration and designated HUB Coordinator provide functional staff expertise and support, and advise the President regarding all phases of the HUB program.
- The Texas A&M University System Health Science Center Component Administration
Component CEOs are responsible for implementation of procedures promulgated herein at their respective institution. The component CEO shall develop strategic and action plans necessary for effective implementation of the HUB program.
The A&M System HSC President will designate a HUB Coordinator who will market and implement an outreach program to recruit HUBs, report any required information to TPASS, and match HUBS with the appropriate A&M System HSC component institution.
- The HUB Coordinator will be responsible for obtaining and utilizing the TPASS's Centralized Master Bidders List (CMBL) as the primary reference list for HUB vendors. All A&M System HSC component institution and center employees participating in the purchase of goods and services will be held accountable for adhering to the procedures outlined in this A&M System HSC operating procedure.
- The A&M System HSC will utilize this HUB Operating Procedure as the basis for obtaining the HUB participation goals.
- The HUB Coordinator will also:
- Provide potential bidders with the TPASS's list of certified HUBs for subcontracting.
- Determine whether specific A&M System HSC goals are appropriate under the Disparate Study.
- Identify potential subcontracting opportunities in all contracts requiring a HUB Subcontracting Plan, and seek HUB subcontracting on contracts that do not require a HUB Subcontracting Plan whenever possible.
- The Texas A&M University System Health Science Center Administration
- Specify an operating organizational division structure for the purpose of defining responsibility and accountability for achieving HUB program goals and objectives. Comply with legislation and rules pertaining to designation of a HUB Coordinator, who will report to the President. Include that structure in strategic and action plans required by Section II.B above.
- Establish an HSC HUB advisory committee, chaired by the Vice President for Finance and Administration, to provide functional staff expertise, advice, and counsel regarding implementation of all aspects of the HUB program. Organization of the advisory committee shall include the assistant deans, directors, or comparable supervisors of budget, accounting, purchasing, information services, facilities planning and construction, and physical plant functions. Other staff representation may be added at the discretion of the President and Vice President for Finance and Administration.
- Establish a marketing and outreach program designed to contact and to maintain continuous liaison with the local/regional HUB business community. Two major objectives of this program are (1) to become knowledgeable of HUB firms capable of supplying needed materials, supplies, equipment, and services, and (2) to inform the HUB business community of business opportunities with A&M System HSC component institutions of requisite business processes and procedures. In connection with the objectives specified above, (a) implement the Mentor-Protégé Program designed by the TPASS, (b) design a program of forums for hearing HUB presentations regarding their capacity to do business with the A&M System HSC Administration and component institutions, and (c) seek out potential HUB vendors and assist them in the State of Texas certification process.
- Establish internal programs designed to educate and provide functional staff expertise to operating department heads and key departmental staff, who exercise budget expenditure authority. All staff engaged in daily procurement operations must be knowledgeable of and vigorously implement HUB program goals, objectives, strategies, and action plans.
- The A&M System HSC Administration entering into a contract with an expected value of $100,000 or more shall, before the solicitation of bids, proposals, offers, or other applicable expressions of interest, determine if it is probable for subcontracting opportunities under the contract. If subcontracting opportunities are probable, the A&M System HSC will require the submission of a HUB subcontracting plan. The HUB Subcontracting Plan is a material requirement of the contractor/vendor response. Failure to submit a completed HUB Subcontracting Plan, or if the A&M System HSC determines that the HUB Subcontracting Plan was not developed in good faith effort, will result in the response being rejected as non-responsive. The accepted HUB Subcontracting Plan will become a provision of the contract.
- The HUB Coordinator shall review all supporting documentation submitted by a potential contractor/vendor to determine if the proposed HUB Subcontracting Plan complies with bid specifications. No changes will be made to an accepted subcontracting plan prior to its incorporation into the contract.
- A&M System HSC component offices and departments will collect and provide to the HUB Coordinator contractor pay vouchers which should reflect the value of contracts awarded to HUB subcontractors, suppliers, or material providers.
- The A&M System HSC will require prime contractors to put forth a good faith effort in establishing contracts with HUBs as subcontractors, suppliers, or material providers. HUB subcontracting performance will be a criteria incorporated in the TPASS vendor performance rating system. Documentation of good faith efforts by the general/prime contractor during the procurement process include, at a minimum, the following:
- Whether the contractor/vendor divided the contract work into reasonable portions in accordance with prudent industry practices.
- Whether the contractor/vendor sent notices containing adequate information about bonding, insurance, the 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. Notices must contain the name and telephone number of a contact person within the prime contractor's office.
- Whether the contractor/vendor negotiated in good faith with qualified HUBs, not rejecting qualified HUBs who were also the best value responsive bidder.
- Whether the contractor/vendor documented reasons for rejection or met with the rejected HUB to discuss the rejection. Documentation should include the dollar amount of each bid or proposal submitted.
- Whether the contractor/vendor advertised in general circulations, trade association, and/or minority/women focus media concerning subcontracting opportunities.
- Whether contractor/vendor assisted non-certified HUBs to become certified.
- Failure of the general/prime contactor to meet the HUB Subcontracting Plan requirements identified during the procurement process may be considered as a basis for a default in the awarded contract. If a determination is made that the contractor/vendor failed to implement the HUB Subcontracting Plan in good faith, the A&M System HSC, in addition to any other remedies, may report nonperformance to the commission in accordance with 1 TAC, Chapter 113, Subchapter F (relating to Vendor Performance and Debarment Program).
- Will maintain their stated HUB participation goal regardless of reduced scope of services in the contract; and
- Will prepare and submit established forms within the time period designated on each form. This will assist HSC components in documenting the HUB usage/monitoring of the prime contractor's HUB Subcontracting Plan.
5. General/Prime Contractors:
- Vendor's past performance in meeting the contractual agreement outlined in the award may be consideration in determining future awards of HSC component contracts.
- F. Types of Purchases
- All ordering departments will ensure that bids are obtained from businesses that normally sell the goods and services being purchased.
- Delegated Spot Purchases (commodities or services under $25,000):
- Purchases of $5,000 or less: HSC component departments and offices are encouraged to purchase from a HUB whenever possible;
- Purchases of $5,000.01, but not greater than $10,000, require at least three telephone bids -- two bids from certified HUBs, one minority and one woman-owned. If HUBs are unavailable, the department or office must document the lack of required HUB bids;
- HSC purchases of $10,000.01, but not greater than $25,000, require Purchasing to obtain at least three informal bids -- two bids from certified HUBs, one minority and one woman-owned; and
- HSC purchases of services greater than $25,000: Purchasing will solicit formal bids. Bids/Proposals will be requested from vendors providing the required classification and servicing the geographic area concerned.
- Catalog Purchasing. The HSC will solicit catalogs and evaluate pricing from approved HUBs in accordance with the catalog purchasing procedures. An approved HUB vendor will be used to the fullest extent possible.
- Construction. The HSC will adhere to A&M System policy with regard to construction projects.
- Consulting. If HSC OP requires solicitation of proposals, the department will utilize and demonstrate that the CMBL and HSC HUB directory were used as resources.
- Professional. The services of some professionals do not require competitive bids. Examples include certified public accountants, architects, optometrists, physicians, surgeons, land surveyors, and professional engineers. The CMBL and HSC HUB directory were used as resources in selection of these professionals.
Note: In the event a/an operating unit , (i.e., division, program, facility, etc) is unable to locate a HUB vendor from the TPASS's certified HUB Directory or the CMBL and/or the HSC HUB Directory, the unit must make a written notation or attach documentation with the spot purchase form or the contracts of all referenced sources used and document the unavailability of HUBs.
- The HUB Coordinator will coordinate with each A&M System HSC component all HUB reporting requirements, including semi-annual and annual reports to the TPASS. The HUB Coordinator will also track the extent of the HUB participation by contractors and all components in their acquisition programs and make it an A&M System HSC review item at the executive level.
- Automated Financial and Accounting Management Information System (FAMIS) HUB Reports will be produced monthly to assess A&M System HSC component awards made to HUBs. The report will identify total expenditures, type of purchases by object code, amount allocated to each HUB category, and percentage of HUB participation.
- The HUB Coordinator will serve as a liaison between the A&M System HSC and TPASS.
- HUB participation will be included in performance evaluations. The HUB Coordinator will keep a monthly record of all HUB purchases. The HUB Coordinator will also use the monthly report as a tool to identify the commodities that present the greatest opportunity for HUB participation.
- Utilize and supplement, as appropriate, purchasing rules and regulations published by the TPASS, The Texas A&M University System in support of HUB objectives.
- Establish a system to monitor individual buyer performance as it relates to institutional HUB program goals and objectives.
- Report progress toward HUB program objectives as requested by TPASS and The Texas A&M University System.