Key takeaways
- The Texas HUB program is run by the Texas Comptroller and certifies Historically Underutilized Businesses for state purchasing.
- On many state contracts above set thresholds, the prime contractor must submit a HUB subcontracting plan with its bid or proposal.
- A good faith effort means documented outreach to certified HUBs for the subcontracting opportunities the prime has identified.
- VetHUB, run by the Texas Veterans Commission, recognizes veteran-owned businesses and is a different program from Comptroller HUB certification.
The Texas HUB program shapes how many state contracts are bid, and prime contractors who have not worked with it can lose a bid on paperwork alone. HUB stands for Historically Underutilized Business. The program is run by the Texas Comptroller of Public Accounts, and its purpose is to give certified small businesses owned by members of certain groups a fair share of state purchasing. For a prime contractor, the program mostly shows up as one document: the HUB subcontracting plan.
What the Texas HUB program is
The Comptroller certifies businesses as HUBs when they meet the program's ownership, control and size rules. Certified HUBs are listed in a public directory that state agencies and prime contractors search when they look for subcontractors and suppliers. State agencies set goals for HUB participation by category of spending, such as building construction and special trade construction, and they report how much of their spending reaches certified HUBs.
Where the HUB subcontracting plan comes in
On state agency contracts above set thresholds where the agency has decided subcontracting opportunities are likely, the solicitation asks every bidder to submit a HUB subcontracting plan. The plan lists the parts of the work the prime will subcontract and shows how the prime will meet the HUB goal for those parts, either by using certified HUBs or by documenting a good faith effort to find them. Many agencies treat a missing or incomplete plan as grounds to reject the bid, so the plan deserves the same care as the price.
- Identify each subcontracting opportunity in the scope.
- Search the Comptroller's directory for certified HUBs in those trades.
- Send written notice of each opportunity to the HUBs, with enough time to respond.
- Keep records of who was contacted, who responded and why each selection was made.
What a good faith effort looks like
A good faith effort is outreach that can be shown on paper. The agency wants to see that the prime gave certified HUBs a real chance to bid, with notice early enough to prepare a price and a scope clear enough to price. Phone calls with no record, notices sent the day before bids are due and scopes too vague to price tend to be questioned. After award, the prime reports actual payments to subcontractors, and changes to the plan usually need the agency's approval.
How this differs from VetHUB
Texas has more than one program with a similar name, and mixing them up causes problems on a bid. The Comptroller's HUB program is the one tied to state purchasing goals and subcontracting plans. VetHUB is a separate program run by the Texas Veterans Commission that recognizes veteran-owned businesses. Holding one does not mean holding the other. When a solicitation asks for HUB participation, it means the Comptroller's certification, and the directory to check is the Comptroller's.
Wattsmith Electric is certified as a Texas Veteran Owned Business through VetHUB, and holds SBA SDVOSB and VOSB certification. Those are published on our insurance and licensing page. Ask for our current certifications when you build the HUB subcontracting plan, so each one is counted for exactly what it is.
Where electrical work fits in a HUB plan
Electrical work is one of the most common subcontracting opportunities on a state building project. A prime planning its HUB participation will often split the electrical scope into parts, such as power and lighting, fire alarm, low voltage and site lighting, so that more than one subcontractor can take part. Whichever way the scope is divided, each part still needs a clear description and drawings an electrical contractor can price, and the subcontract carries the agency's requirements down to the trade.
If you are a prime planning a public project, our government page explains how we work on public jobs, and our commercial electrical services page covers the scope we take on.
Federal programs work differently
Federal contracts use their own small business programs, with goals set at the federal level and certifications issued by the Small Business Administration. A prime working on a federally funded project inside Texas may have to meet federal subcontracting rules and, if a state agency is also involved, state HUB rules at the same time. Our guide to SDVOSB subcontracting goals explains the federal side.
Read next: SDVOSB subcontracting goals, how public agencies buy electrical work, and our page on government and military buildings.
When a subcontractor is not a HUB
A prime is free to choose a subcontractor that is not a certified HUB, as long as the HUB subcontracting plan shows the good faith effort the solicitation requires. The plan records which HUBs were notified, which responded and why the prime chose the subcontractor it did, such as price, schedule or capacity. Agencies review that reasoning, so it should be specific and supported by the bids received rather than a general statement written after the fact.
After the award
The HUB subcontracting plan becomes part of the contract. During the work, the prime reports payments to its subcontractors on the schedule the agency sets, and any change to the plan, such as replacing a subcontractor or moving work between subcontractors, usually needs the agency's approval first. Keeping subcontract payments, change orders and the reports in step avoids questions at closeout.
Common mistakes in a HUB plan
The plans that get bids rejected tend to fail in the same few ways. The plan is left blank because the prime intended to self-perform everything but did not say so on the form. Notices go out too late for HUBs to prepare a price. The scope sent to subcontractors is too vague to price. Or a subcontractor is counted as a HUB because of a different certification. Each of these is avoidable by starting the plan while the bid is being priced, not the night before it is due.
- Complete every section, including the self-performance statement.
- Send notices early enough to receive real prices.
- Describe each subcontract scope clearly enough to price.
- Confirm certification in the Comptroller's directory.
Self-performed work
A prime that intends to perform all of the work with its own employees can usually say so on the HUB subcontracting plan, and the plan then documents that no subcontracting opportunities exist. Agencies may ask the prime to show it has the people and equipment to do the work itself. If the prime later decides to subcontract part of the scope after all, the plan has to be revised and approved before that subcontract is awarded, with the same outreach to certified HUBs that would have happened at bid time.
Primes that bid state work often keep a short list of HUB subcontractors by trade, checked against the directory before each bid, so outreach can start the day a solicitation is released rather than the week it closes. The list is a starting point for notices, not a substitute for them.
Practical steps for a prime contractor
Read the HUB section of the solicitation first, not last. Identify subcontracting opportunities while the scope is being priced, send notices early, and keep every response on file. Check each subcontractor's certification in the Comptroller's directory rather than relying on what a company says about itself. And when a subcontractor holds a different certification, such as VetHUB or an SBA designation, record it accurately rather than counting it toward a HUB goal it does not meet.
Related services: generator installation for standby power, and electrical repair for building service calls.