Even small businesses can compete successfully for contracts with state

To be certified as a HUB and to qualify for the state's HUB Program, businesses must be Texas-based with at least 51 percent ownership by a minority (Asian Pacific American, African-American, Hispanic American, Native American and/or American woman) who resides in the state.

Additionally, the state instructs agencies contracting for anything with a value of $100,000 or more to determine if subcontracting opportunities are possible in the contract. When subcontracting is a possibility, agencies must specify in all procurement solicitation documents that such an opportunity exists and bidders will be required to submit a HUB Subcontracting Plan (HSP). That means that businesses responding to the bid must outline how HUB subcontractors will be used.

The goal of the HUB program in Texas is to ensure that the state's small firms have an ability to compete for procurement dollars. Government leaders want HUB firms to compete for possible contracts with the state's more than 300 agencies and institutions of higher education.

The state has set HUB guidelines for agencies and expects that the following quotas will be met:

• 11.9 percent of all state procurement contracts for heavy construction will be awarded to HUBs,
• 26.1 percent for building construction,
• 57.2 percent for special trade construction contracts,
• 20 percent for professional services,
• 33 percent for all other service contracts, and
• 12.6 percent for commodities.

In FY 2007, the state spent the following amounts in these categories with Texas HUBs:

• $490 million with Texas HUBs for heavy construction,
• $227 million for building construction,
• $111 million for special trades (including maintenance and repair work for facilities and buildings and land and lease contracts, and
• $107 million for professional services that included financial and accounting services, medical services and architectural and engineering services.

Some of the other HUB services secured by the state included legal, veterinary, cleaning, advertising and communications services, telecommunications and motor vehicle repair and maintenance. Commodities purchased through HUBs include fuels and lubricants, medical supplies, food, plants, fabric and linens, computers, passenger cars and other motor vehicles, furnishings and equipment, to name a few.

For FY 2007, the Texas Department of Transportation awarded more than $667 million of its $6 billion in total expenditures for the year to HUB businesses, or 10.43 percent of its expenditures. The M.D. Anderson Cancer Center in Houston ranked second in HUB contracting, spending more than $65.5 million of its $826.7 million budget with HUBs.

Among Texas universities, the University of Texas System did more business with HUBs than any other institution, sending $104.8 million of its $534 million total expenditures to smaller firms.

Small and minority firms should never rule out contracting with the state - there are too many opportunities for both contracting and subcontracting. There is no cost for a four-year HUB certification and many state agencies hold seminars and conferences designed to help HUBs sell to their agencies.