This policy was first approved at the August 9, 1990 meeting of the U. T. Board of Regents pursuant to action by the 71st Legislature. Actions by the 72nd and 73rd Legislatures and by the Office of the Governor, through Executive Order AWR 93-7, define new program eligibility criteria and administrative rules and led to amendments approved by the Board at the April 14, 1994 and November 9, 1995 meetings.

The November 12, 1998 amendments identified administrative responsibilities, specified required program elements, and established a new management emphasis consistent with the new legislation.

The November 11, 1999 amendments clarify statements of purpose and scope, reflect changed definitions and changes in the U. T. System organizational structure, and conform the policy to new legislative requirements.

POLICY ON U. T.ILIZATION OF HISTORICALLY
UNDERU. T.ILIZED BUSINESS (HUB) FIRMS

I. POLICY STATEMENT

A. Purpose

It is the policy of The University of Texas System to promote full and equal opportunity for all businesses to supply the goods and services needed to support mission, administrative, and logistical operations of U. T. System Administration and U. T. System component institutions. U. T. System Administration and component institutions commit to a good faith effort to increase purchases from and contract awards to Historically Underutilized Business (HUB) firms consistent with the state's goals for HUB participation and overall economic development.

As public entities, U. T. System Administration and component institutions have a compelling interest to assure that procurement funds always are expended in an equal-business-opportunity context. To meet that obligation, U. T. System and component administrators shall establish and maintain procurement systems and procedures that are nondiscriminatory with respect to race, color, religion, sex, or national origin. That obligation also encompasses procurement systems and procedures of business firms under contract with U. T. System Administration or component institutions in order to preclude U. T. System institutions’ passive participation in an unlawfully discriminatory marketplace.

Pursuant to the aforestated purpose, the following guidelines and related rules of the General Services Commission (GSC) (1 Texas Administrative Code Sections 111.11 through 111.28) are hereby adopted.

B. Scope

This policy applies to acquisition of specified commodities, professional and other services, and construction services, by U. T. System Administration and component institutions, including auxiliary enterprises, regardless of funding source (treasury or non-treasury funds).

C. Definitions

1. "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.

2. "Economically Disadvantaged Groups" mean and include:

(a) Black Americans - includes persons having origins in any of the Black racial groups of Africa;

(b) Hispanic Americans - includes persons of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish or Portuguese culture or origin, regardless of race;

(c) American Women - includes all women of any ethnicity except American Women specified in (a), (b), (d), and (e) of this subparagraph;

(d) 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

(e) Native Americans - includes persons who are American Indians, Eskimos, Aleuts, or Native Hawaiians.

3. "Categories of Historically Underutilized Business Enterprises" mean and include:

(a) 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;

(b) A sole proprietorship that is 100% owned by a person described in C.2 above;

(c) 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;

(d) A joint venture in which each entity in the joint venture is an historically underutilized business;

(e) 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

(f) 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.

4. "Commodities" mean materials, supplies, or equipment.

5. "Professional Services" mean services procured under provisions of the Professional Services Procurement Act (Sections 2254.001 - 2254.005, Texas Government Code).

6. "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.

7. "Construction" means construction, improvement, maintenance, or repair of buildings, roads, highways, or grounds.

8. "Treasury Funds" are funds maintained in the State treasury and disbursed through the State Comptroller's Office for U. T. System Administration or a component institution.

9. "Non-Treasury Funds" are all funds of U. T. System Administration or a component institution that are not deposited in the State treasury.

II. U. T. SYSTEM ADMINISTRATION AND COMPONENT INSTITU. T.ION RESPONSIBILITIES

A. U. T. System Administration

1. The Chancellor, with support from and delegation to the Executive Vice Chancellor for Health Affairs and the Executive Vice Chancellor for Academic Affairs, exercises oversight responsibility for implementation of policies outlined herein by the U. T. System as a whole. The Chancellor is responsible for policy implementation in U. T. System Administration.

2. The Vice Chancellor for Administration provides functional staff expertise and support, and advises the Chancellor, the Executive Vice Chancellor for Health Affairs, and the Executive Vice Chancellor for Academic Affairs regarding all phases of the HUB program.

B. U. T. System Component Administration

The president of each component institution is responsible for implementation of policies and procedures promulgated herein at his/her institution. Presidents shall develop strategic and action plans necessary for effective implementation of the HUB program.

III. PROCEDURES

A. Specify an operating division structure (line and block diagram with necessary explanatory narrative/notes) 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. Include that structure in strategic and action plans required by Section II.B above.

B. Establish a staff coordinating group (SCG), chaired by the Chief Business Officer, to provide functional staff expertise, advice, and counsel regarding implementation of all aspects of the HUB program. Organization of the SCG shall include the directors, or comparable supervisors of budget, accounting, purchasing, information services, and physical plant functions, and HUB Coordinators. Other staff representation may be added at the discretion of the president.

C. Establish an 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 component institutions and of requisite business processes and procedures. In connection with the objectives specified above, (a) implement the Mentor-Protégé Program designed by the GSC, and (b) design a program of forums for hearing HUB presentations regarding their capacity to do business with U. T. System component institutions.

D. Establish internal programs designed to educate and provide functional staff expertise to operating division heads, 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.

E. Develop and maintain a HUB utilization reporting system. Compile monthly data by operating division; compile data sufficient to satisfy reporting requirements of the GSC, and provide internal program management information. Reports submitted to the GSC and to U. T. System Administration (sub-paragraph H below) shall be certified by the president or the Chief Business Officer.

F. Utilize and supplement, as appropriate, purchasing rules and regulations published by the GSC in support of HUB objectives.

G. Establish a system to monitor individual buyer performance as it relates to institutional HUB program goals and objectives.

H. Report progress toward HUB program objectives as requested by U. T. System Administration.

Last reviewed October 2003

Historically Underutilized Business Firms