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Promoting Social Responsibility Through Diversity Spend….. State of Texas HUB Program

Promoting Social Responsibility Through Diversity Spend….. State of Texas HUB Program. “Transforming Tomorrow Together”. What is a HUB?. A state of Texas-certified HUB is a business that meets the following criteria:

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Promoting Social Responsibility Through Diversity Spend….. State of Texas HUB Program

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  1. Promoting Social Responsibility Through Diversity Spend….. State of Texas HUB Program “Transforming Tomorrow Together”

  2. What is a HUB? A state of Texas-certified HUB is a business that meets the following criteria: The business must be a corporation, sole proprietorship, partnership, or joint venture that is at least 51% owned, operated, and actively controlled/managed by an Asian Pacific American, Hispanic American, Native American, African American and/or American woman. The business owners must be citizens of the United States and Texas residents. Resident aliens are not eligible. The principal place of business must be located in Texas. Currently, there are approximately 14,286state of Texas certified HUBs. Texas Procurement and Support Services (TPASS) is responsible for certifying businesses as HUBs.

  3. Benefits of HUB Certification • HUB certification is free of charge. • Certification is valid for 4 years, provided that business continues to meet the eligibility requirements. • Business is registered on the Comptroller’s Web-based HUB Directory. State agencies use the HUB Directory in conjunction with the Comptroller’s Centralized Master Bidders List (CMBL) to solicit bids from certified HUBs for state purchasing and public works contracts. Prime contractors also use the HUB Directory to identify HUBs to whom they will send notification of their subcontracting opportunities. • Increased exposure to the general public, as well as, other entities who have a supplier diversity program and are searching for minority and woman-owned businesses.

  4. HUB is NOT… • NOT An Unfair Business Advantage • NOT Anti-Capitalist • NOT Anti-Democratic • NOTA Quota System • NOTAnti-Competitive • NOTRace Motivated • NOT Restrictive in Purchasing Decisions • NOT More Expensive / Costly Goods & Services

  5. HUB is Really About…. • Providing Competitive Access to Purchasing Opportunities for All Vendors, especially those that have been Historically Underutilized • Obtaining the “Best Value” • For Texas A&M University-Commerce – Students, Administration, Faculty, Staff, and Alumni • for the Taxpayers of the State of Texas • Supporting the Economic Growth and Needs of Texas Business through Increased Opportunities • Increasing Employment Opportunities in the State of Texas through Small Businesses • Supporting the Economic Growth in the Diversifying Community • Diversity in Purchasing • Promoting Social Responsibility….it is the right thing to do. • Not Race Motivated as it also Applies to Women Owned Businesses. Many States and the Federal Government also include Purple Heart and Disabled Veterans.

  6. Why Buy from a HUB? Reasons to purchase from HUBs include: • State law and A&M System policy require a "good faith effort" to purchase from HUBs. • Poor HUB performance can lead to loss of state funding and negative audit findings. • HUB purchases benefit the Texas economy. • HUB purchases provide economic opportunities that were previously unavailable to minority and women-owned businesses.

  7. State Law The Texas Legislature has determined that all qualified businesses should have access to compete for business from the state (Texas Government Code Chapter 2161, Section 004). All state agencies and institutions of higher education are required by law to make a "good faith effort" to purchase goods and services from certified HUBs. A "good faith effort" includes the following: • Plan purchases in advance to ensure adequate time is given for vendors to bid. • Avoid unreasonable bidding restrictions. • Avoid proprietary and/or sole source bid specifications. • Ensure that specifications, terms, and conditions are clearly stated and do not impose unreasonable or unnecessary contract requirements. • Make an earnest attempt to extend procurement opportunities to minority and women-owned HUBs.

  8. State of Texas Annual Procurement Goals In accordance with §20.11 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. 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: 11.2% for heavy construction other than building contracts; 21.1% for all building construction, including general contractors and operative builders contracts; 32.7% for all special trade construction contracts; 23.6% for professional services contracts; 24.6% for all other services contracts; and 21% for commodities contracts.

  9. HUB Mentor-Protégé Program • The Mentor-Protégé program helps to foster relationships between prime contractors and Historically Underutilized Businesses (HUBs). • Designed to provide professional guidance and support to the protégé (HUB) in order to facilitate their growth and development and increase HUB contracts and subcontracts with the State. • These partnerships fulfill requirements for HUB subcontracting. • State Agencies sponsor a team. • Mentor Qualifications Previous mentoring experience Ability to provide developmental guidance in areas identified by the protégé “Good Standing” in doing business with the State of Texas • Protégé Qualifications Must be a registered HUB vendor Business in operation for at least a year Desire to participate with a mentoring firm Ability to identify the type of guidance needed for business development “Good Standing” in doing business with the State of Texas

  10. System HUB Policy A&M System Policy 25.06, approved by the Board of Regents, and Regulation 25.06.01, approved by the Chancellor, acknowledge and reinforce existing Texas law. System Policy 25.06 states that "Every System employee responsible for conducting business with outside vendors has the responsibility of making a good faith effort of ensuring that HUBs are afforded an equitable opportunity to compete for all procurement and contracting activities of the System."

  11. Consequences of Poor HUB Purchasing Performance State agencies and institutions of higher education are required to report their HUB participation expenditures semi-annually and annually. TPASS compiles reports that list and compare the performance of various state entities. These statistics are available on the web at: http://www.window.state.tx.us/procurement/prog/hub/hub-reporting/ . Members of the state legislature review these reports and take them very seriously. Failure to meet HUB participation goals can result in the loss of support for our programs. During the A&M System budget process, the Chancellor examines HUB performance and CEOs are required to discuss their performance and justify any shortfalls. The State Auditor's Office (SAO) and System Internal Audit also audit agency compliance with state HUB laws.

  12. Access to Economic Opportunities HUB purchases promote economic diversity and help to eliminate barriers to economic prosperity for disadvantaged groups. In addition, purchasing from HUBs promotes competition, which ultimately results in the best value for Texas A&M University-Commerce.

  13. Benefits to the Economy Because HUBs are located in Texas, they hire Texans, spend money in Texas, and pay state taxes. Buying from HUBs keeps state revenue in Texas and ultimately benefits Texans. In fiscal year 2007, the State of Texas awarded more than $1.8 billion in contracts to HUB-certified companies, and more than $829 million was spent with HUBs through subcontracting opportunities. During the same fiscal year, the A&M System awarded $117 million to HUB-certified companies out of $548 million in total expenditures—a HUB participation rate of 21.38%.

  14. Misconceptions About HUB Purchasing • Some people assume that HUBs provide substandard services or products, or that goods and services provided by HUBs always cost more. This is not necessarily true. Like all businesses, HUBs vary in the quality and value of their offerings. • Making a "good faith effort" does not mean that you have to buy from a HUB at any cost. A&M System Regulation 25.07.03, requires that purchases should be made in accordance with a best value decision-making process, which includes price, quality, reputation, and HUB compliance as considerations. Best value criteria are also addressed in state law (Education Code, Chapter 51, Section 51.9335).

  15. Texas A&M University-CommerceHistorically Underutilized Business (HUB) PlanFiscal Year 2012 • Statement of Commitment The Texas A&M University-Commerce HUB Program continues our commitment to promote and increase participation in the State of Texas Historically Underutilized Business (HUB) Program through increased procurement of goods and/or services from historically underutilized businesses. A&M-Commerce will continue to expand our procurement solicitations to minority and woman-owned businesses, and will continue to foster new relationships to expand outreach programs in support of the goals specified by the State of Texas. • Goal of the Texas A&M University-Commerce HUB Program Texas A&M University-Commerce’s primary goal is to steadily increase commerce with Historically Underutilized Businesses (HUBs) by ensuring HUB vendors have an opportunity to participate in all procurement solicitations. Although the University has been successful in developing and nurturing HUB vendor relationships in the previous years, Texas A&M University-Commerce is anticipating decreasing its FY12 University-wide HUB goal to 28% of total expenditures. Texas A&M University-Commerce will continue to seek our goal to increase the racial diversity of HUB participation through our outreach efforts. • Administration of Texas A&M University-Commerce HUB Program Texas A&M University-Commerce has adopted the rules of the State of Texas, as specified in Title 34, Part 1 TAC Chapter 20.11 et seq., Texas A&M University System Policy 25.06 and 25.06.01 and Texas A&M University System HUB Performance Improvement Plan.

  16. Texas A&M University-CommerceHistorically Underutilized Business (HUB) Plan Fiscal Year 2012(Continued) Texas A&M University-Commerce HUB Plan for Fiscal Year 2012 1. Enhance Communication • Increase communication through regular HUB meetings, in conjunction with our Budget Users Group (BUG) Meetings, and through e-mail notifications to keep our University community abreast of the steps we are taking and the goals we have set to increase HUB spending. • Continue to host and co-host vendor fairs to attract potential HUB vendors and current HUB vendors to the A&M-Commerce region. • Continue to play an active role in the Texas Universities HUB Coordinators Alliance (TUHCA) organization by attending meetings and Economic Opportunity Forums throughout the State. 2. Increase Outreach & Certification • Continue attendance at Economic Opportunity Forums to increase number of HUB vendor contacts. • Assist the System HUB office with recruiting vendors for our local construction projects. • Continue to meet face-to-face with HUB vendors who are interested in doing business with A&M-Commerce. • Promote vendor certification and participation in procurement opportunities. • Participate in activities that promote economic opportunity for HUBs within the A&M-Commerce region.

  17. Texas A&M University-CommerceHistorically Underutilized Business (HUB) Plan Fiscal Year 2012(Continued) 3. Require Subcontracting • Ensure Administrative Procedures include contract monitoring and file requirements for compliance of the Historically Underutilized Business Subcontracting Plan (HSP) • Require a HUB Subcontracting Plan for solicitations that exceed $50,000 and where sub-contracting opportunities are probable. 4. Monitor Results through Reporting • Provide activity reports to the President’s Advisory Council for consideration and action when required. • Provide annual and semi-annual reports of HUB activities to the Comptroller of Public Accounts, Historically Underutilized Business (HUB) Program to validate compliance. • Provide information through the Texas A&M University System HUB Reporting database monthly to ensure compliance and demonstrate the University’s good faith effort to increase HUB expenditures. 5. Enhance Training • Continue HUB training as part of the on-going training offered at the departmental level. • Continue annual face-to-face training to the University community. • Maintain information resources on purchasing website and literature. • Continue HUB mentoring program. • Continue to assist the System office with monitoring the online HUB training at a local level and identifying the required participants.

  18. Texas A&M University-CommerceHistorically Underutilized Business (HUB) Plan Fiscal Year 2012(Continued) 6. Diversity • Implement a plan to increase vendor diversity: • Benchmark other high-performing Texas A&M System members to identify best practices for improving vendor diversity. • Whenever possible, we will require that all contracts greater than $25,000 but less than $50,000 include solicitations from at least one Black-owned company and at least one American Indian-owned company. • Continue to attend conferences and workshops that promote and educate HUB Coordinators of the importance of supplier diversity within our organization. • Texas A&M University –Commerce continues to increase business opportunities for historically underutilized businesses. HUB activity over the past three years has remained much higher than the State average, but fell slightly in FY 2010 and FY 2011 semi-annual reporting period. During the FY 2008 reporting period, Texas A&M University-Commerce ranked 17th in the State for spending the most with HUB certified vendors. During the FY 2009 reporting period, we ranked 25th. In addition, during the FY 2010 Annual reporting period, we ranked 25th in the same category. We anticipate further advancement as a result of our diversity initiatives that will be continued during FY 2012. Any future increases are due, in part, to our on-going attempts to identify and emulate best practices throughout the State of Texas. The University will continue to routinely monitor HUB activity and adjust strategies as necessary to ensure continued progress toward diversity related objectives.

  19. Texas Universities HUB Coordinators Alliance The North/Northeast Texas Chapter “To reach minority and women-owned businesses and raise awareness of procurement opportunities with higher education.” WWW.TUHCA.ORG

  20. Texas Universities HUB Coordinators Alliance Chapter Members Texas Woman’s University Texas A&M University-Texarkana UT- Dallas UT Health Center at Tyler UT Tyler Texas A&M University-Commerce Tarleton State University UT Southwestern Medical Center Texas A&M Health Science Center University of North Texas Stephen F. Austin State University UT Arlington Texas Tech University System University of North Texas Health Science Center Officers • President: Travis A. Ball Texas A&M University-Commerce • Vice President: Linda Owen Texas Tech University System • Secretary: William Bailes UT Southwestern Medical Center • Treasurer: Elaine Chew Tarleton State University

  21. TUHCA History The North/Northeast Texas Chapter of the Texas Universities HUB Coordinators Alliance (TUHCA) was formed in the summer of 2001 as a collaboration between three universities in the North Texas region. Initially, the main goal was only to coordinate efforts in order to comply with the State of Texas HUB Program. Within a few months, the membership grew when the potential of a greater effort was realized not only to promote individual HUB Programs, but more importantly, to effectively reach the minority and/or women-owned business communities and raise awareness of the procurement opportunities with the universities. The North/Northeast Chapter brings together thirteen universities from Nacogdoches to Denton to share resources, training, program information, advertising expenses, and more importantly provide effective, coordinated venue for HUBs to obtain assistance and provide their goods and/or services to all thirteen members more easily and economically.

  22. Statewide HUB Program Video: http://www.window.state.tx.us/procurement/prog/hub/txbus

  23. The End!

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