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Operating Policy and Procedure

HSC OP: 72.13, Veteran Heroes United in Business 

Attachments

PURPOSE: The purpose of this Health Sciences Center Operating Policy/Procedure (HSC OP) is to establish the policy and outline the procedures for the utilization of Veteran Heroes United in Business (VetHUB) for the purchases of goods and services by Texas Tech University Health Sciences Center (Ï㽶ֱ²¥). This HSC OP shall apply to all purchases of goods and services regardless of source of funds used for payment.

REVIEW: This OP will be reviewed on June 1 of every fourth year (E4Y) by the Director of VetHUB Operations and the Director of Purchasing, with recommendations for revision forwarded to the Executive Vice President of Finance and Operations and the President by June 15.

POLICY/PROCEDURE:

1. Policy.

a. The State of Texas is committed to providing procurement and contracting opportunities for businesses owned by disabled veterans. It is the state's policy to create an environment that will enhance VetHUB participation in state procurements and contracts. Consequently, Ï㽶ֱ²¥ will make a good faith effort to increase the award of goods, services and construction contracts to VetHUBs in accordance with the Comptrollers Statewide Procurement Divisions adopted rules.

b. Ï㽶ֱ²¥ will make a good-faith effort to assist VetHUBs in receiving a portion of the total contract value of all contracts awarded in a fiscal year.

All Ï㽶ֱ²¥ offices and departments shall identify and ensure that businesses owned by disabled veterans are given an equal opportunity to bid on commodities, services, leases, and construction projects.

c. Special outreach efforts will be made to identify noncertified VetHUB vendors currently used by Ï㽶ֱ²¥. Assisting the VetHUB vendors in obtaining certification will benefit Ï㽶ֱ²¥ utilizing the VetHUB as well as other state agencies utilizing the same VetHUB in the future. To assist in this outreach, Ï㽶ֱ²¥, through its VetHUB Coordinator, will design, sponsor and participate in the Economic Opportunity Forums that provide contract opportunities and training to VetHUBs and other state agency purchasers. In addition, Ï㽶ֱ²¥ will encourage businesses to participate in the VetHUB Mentor-Protégé Program.

d. Definition. A VetHUB is defined by statute as a corporation, sole proprietorship, partnership, or joint venture with its principal place of business in the State of Texas that is formed for the purpose of making a profit in which at least 51 percent of all classes of the shares of stock or other securities are owned by one or more persons who have been historically underutilized (economically disadvantaged) because of their identification as Disabled American Veterans. These individuals must have a proportionate interest and demonstrate active participation in the control, operation, and management of the business.

2. Responsibilities.

a. The President of Ï㽶ֱ²¥ will designate a VetHUB Coordinator who will be at least equal in position to the institution’s Procurement Director. The Procurement Director may serve in this capacity, and the Vice Chancellor for Facilities Planning and Construction as the Chancellor’s designee will serve as the VetHUB Coordinator for all facilities projects that fall under the control of the Office of Facilities Planning and Construction pursuant to Board Policy. The VetHUB Coordinator shall coordinate training programs to recruit, identify, and certify VetHUBs, report any required information to the Comptrollers Statewide Procurement Division, and match VetHUBs with appropriate Ï㽶ֱ²¥ staff members.

b. The VetHUB Coordinator is responsible for providing assistance to vendors and ensuring that the TPASS’s Centralized Master Bidders List (CMBL) is utilized as the primary reference list for VetHUB vendors. All Ï㽶ֱ²¥ employees participating in the purchase of goods and services will be held accountable for adhering to the policy outlined in this HSC OP.

c. The VetHUB Coordinator will prepare, publicize, and distribute information on procurement procedures in a manner designed to encourage businesses owned by disabled American Veterans to participate in the institutions’ acquisition of goods and services.

(1) Special attention will be given to ensure that purchase orders/contract specifications are written to encourage VetHUB participation. When applicable, the VetHUB Coordinator may recommend the following actions:

(a) Divide proposed requisitions of various supplies and services into reasonable lots in keeping with industry standards and competitive procurement requirements. The intent of such division must be to increase VetHUB participation rather than to avoid competition or to subvert the competitive bidding process.

(b) Except for construction contracts, where statutory requirements are to be followed, develop insurance and bonding requirements so that, if feasible, more than one interested business may perform the work. If the work exceeds the amount for which a performance bond may be obtained, allow the business to perform the amount of work up to the vendor's approved amount of bonding. Performance bond for work to be performed should not be reduced less than 50 percent. Note: As a guideline, the Comptrollers Statewide Procurement Division does not require performance bonds on term contract awards of less than $100,000.

(c) Ensure that delivery schedules are established on a realistic basis that will encourage VetHUB participation to the extent  schedules are consistent with the ordering department's actual requirements.

(d) Ensure requisitions contain terms, conditions, and specifications that do not impose unreasonable or unnecessary contract requirements. The requisitions should accurately reflect Ï㽶ֱ²¥â€™s needs.

(2) The VetHUB Coordinator will also:

(a) Provide assistance to potential bidders with the Centralized Master Bidder List of certified VetHUBs for subcontracting.

(b) Determine whether specific Ï㽶ֱ²¥ goals are appropriate under the State of Texas disparity study described in section 2161.002(c)of TX Gov Code.

(c) Identify potential subcontracting opportunities in all contracts requiring a VetHUB Subcontracting Plan, and seek VetHUB subcontracting on contracts that do not require a VetHUB Subcontracting Plan whenever possible.

3. Veterans Heroes United in Business Subcontracting Plan (HSP) Procedures.

a. Before soliciting bids, proposals, offers, or other applicable expressions of interest on a contract with an expected value of $100,000 or more, the VetHUB Coordinator shall determine if subcontracting opportunities are probable under the contract. If so, a VetHUB Subcontracting Plan will be required as part of a contractor’s or vendor’s bid, proposal, offer, or other applicable expression of interest. Responses that do not include the VetHUB Subcontracting Plan and responses that Ï㽶ֱ²¥ determines were not developed in good faith will be rejected as a material failure to comply with advertised specification.

b. The VetHUB Coordinator shall review all supporting documentation submitted by a potential contractor/vendor to determine if the proposed VetHUB Subcontracting Plan complies with the bid specifications. No changes will be made to an accepted subcontracting plan prior to its incorporation into the contract.

c. Offices, departments and project managers will collect and provide to the Purchasing Director contractor progress assessment reports which should reflect the value of contracts awarded to VetHUB subcontractors, suppliers, or material providers.

In order to comply with state reporting requirements, the following guidelines/steps will be used when processing an HSP for the agency, regardless of the funds used:

(1) When it has been determined that subcontracting opportunities exist under a contract of $100,000 or more, the potential contractor/vendor will submit a completed HSP as part of the bid/proposal.

(2) Purchasing will receive and review all bids/proposals and will select a bidder based on a selection process.

(3) Purchasing then will forward the selected bidder’s HSP to the VetHUB Coordinator for the review and approval process.

(4) After review and approval of the HSP good-faith effort by the VetHUB Coordinator, the Director of Purchasing will contact the appropriate project manager/prime contractor that contract development procedure can begin.

(5) After award of the contract, before any changes can be made to the approved VetHUB Subcontracting Plan, the Project Manager/officer or contractor must submit a written request for approval of changes. The request for change to the HSP must be submitted, in writing, to the Purchasing Director, by submitting a completed Ï㽶ֱ²¥ HSP Change Order Request Form for Contract Modifications (Attachment A). Project Managers must monitor the contract and allow for sufficient project time for Contractors to initiate amendments, renewals, and termination notices. The Project Manager must notify the Director of Purchasing and the VetHUB Coordinator if the contractor/vendor has made any contract changes without the prior approval of the Director of Purchasing and the VetHUB Coordinator.

(6) Prior to approval of any changes, the Purchasing Director and/or VetHUB Coordinator shall review all HSP Change Order requests to determine if the additional scope of work contains additional probable subcontracting opportunities not identified in the initial solicitation.

(7) If the Purchasing Director and/or VetHUB Coordinator determines additional probable subcontracting opportunities exist, the contractor/vendor will be notified/instructed to initiate a revised VetHUB Subcontracting Plan and perform the specified good-faith effort requirements for the additional probable subcontracting opportunities.

(8) If the agency expands the original scope of work through a change order or contract amendment including contract contingencies that expand the scope of work, the Project Manager shall determine if the additional scope of work contains additional probable subcontracting opportunities not identified in the initial solicitation. If it has been determined that additional probable subcontracting opportunities exist, the Project Manager will submit to the Purchasing Director a change order request form, and the contractor/vendor will be notified by the agency VetHUB Coordinator to initiate a revised VetHUB Subcontracting Plan and perform the specified good-faith-effort requirements for the additional probable subcontracting opportunities.

(9) In order to comply with state contracting requirements after a contract has been awarded, Project Panagers will ensure that prime contractors meet their contractual responsibilities. One important aspect of this responsibility is the monthly compliance report (Prime Contractor Progress Assessment Report - PAR). Project Managers will require PARs from all prime contractors and report all VetHUB and non-VetHUB subcontractor payments, as a condition for payment and will be responsible for ensuring that the agency Purchasing Director receives completed copies of the PARs on a monthly and recurring basis for all contracts that are in progress. For all other contracts not being monitored by Project Managers, the vendor will be responsible for providing copies of the PARs to the Purchasing Director on a monthly basis as required. When PARs are sent by the vendors as part of the invoice to accounts payable, then the Manager of Accounts Payable will ensure that copies of the PARs received are sent to the Purchasing Director. The Purchasing Director will then file the PARs in the procurement record and will provide a working copy to the VetHUB Coordinator for monitoring and reporting purposes.

(10) During the term of the contract, the VetHUB Coordinator will monitor the VetHUB Subcontracting Plans on a monthly basis, by reviewing the monthly Prime Contractor Progress Assessment Reports (PARs) to determine if the value of the subcontracts to VetHUBs meets or exceeds the VetHUB Subcontracting provisions specified in the prime contractor’s original HSP.

d. Ï㽶ֱ²¥ will require prime contractors to put forth a good-faith effort in establishing contracts with VetHUBs as subcontractors, suppliers, or material providers. VetHUB subcontracting performance will be a criterion incorporated in the TPASS vendor performance rating system. In making a determination whether a good-faith effort has been made in the development of the HSP, the potential contractor/vendor is required to submit with his bid a HSP and written supporting documentation, clearly explaining the actions taken to prove a good-faith effort has been made. Documentation of good-faith efforts by the general/prime contractor during the procurement process includes, at a minimum, the following:

(1) Whether the respondent utilized the Centralized Master Bidders List (CMBL), the VetHUB Directory, and other internet resources and directories as identified by Ï㽶ֱ²¥ to identify VetHUBs that perform the type of work required for each subcontracting opportunity identified in the contract specifications or any other subcontracting opportunity the respondent cannot complete with its own equipment, supplies, materials, and/or employees.

(2) Whether the respondent divided the contract work into reasonable lots or portions to the extent consistent with prudent industry practices.

(3) Whether the respondent provided written notice to three (3) or more VetHUBs that perform the type of work required for each subcontracting opportunity identified in the contract specifications or any other subcontracting opportunity the respondent cannot complete with its own equipment, supplies, materials, and/or employees. Notices to VetHUBs shall contain adequate information about the scope of the work, information regarding location to review plans and specifications, information about bonding and insurance requirements, and a name and telephone number of a contact person. Potential contractor shall allow a minimum of five (5) working days prior to the date/time that the responses (bids, proposals, offers, or other applicable expressions of interest) are due to Ï㽶ֱ²¥. Copies of the written documentation of the potential subcontractors/suppliers must be included in the HSP.

(4) Whether the potential contractor/vendor provided written notice to disabled veterans or small business development centers to assist in identifying VetHUBs by disseminating subcontracting opportunities to their members/participants. Notices shall contain adequate information about the scope of the work, information regarding location to review plans and specifications, information about bonding and insurance requirements, and a telephone number of a contact person. Potential contractor shall allow a minimum of five working days prior to the date/time that the responses (bids, proposals, offers, or other applicable expressions of interest) are due to Ï㽶ֱ²¥. Copies of the written documentation to trade organizations or small business development centers must be included in the HSP.

(5) Whether the respondent negotiated in good faith with qualified VetHUBs and did not rejecting qualified VetHUBs who were the best value responsive bidders to their subcontracting opportunities. The respondent shall provide written justification of the selection process if a VetHUB subcontractor is not selected.

(6) Whether contractor/vendor assisted non-certified VetHUBs to become certified.

e. Failure of the general/prime contractor to meet the VetHUB 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 VetHUB Subcontracting Plan in good faith, Ï㽶ֱ²¥, in addition to any other remedies, may report nonperformance to the Texas Comptroller of Public Accounts in accordance with 1 TAC, Chapter 113, Subchapter F (relating to Vendor Performance and Debarment Program).

f. General/Prime Contractors:

(1) Will maintain their stated VetHUB participation goal regardless of reduced scope of services in the contract; and

(2) Will prepare and submit established forms within the time period designated on each form. This will assist agencies in documenting the VetHUB usage/monitoring of the prime contractor's VetHUB Subcontracting Plan.

g. Vendor's past performance in meeting the contractual agreement outlined in the award may be consideration in determining future awards of agency contracts.

4. Types of Purchases.

a. All ordering departments will ensure that bids are obtained from businesses that normally sell the goods and services being purchased.

b. Delegated Spot Purchases (commodities or services under $50,000):

(1) Purchases of $50,000 or less: Ï㽶ֱ²¥ departments and offices are encouraged to purchase from a VetHUB whenever possible;

(2) Purchases of $50,000.01, but not greater than $100,000, require at least three telephone bids - two bids from certified VetHUBs. If VetHUBs are unavailable, the department or office must document the lack of required VetHUB bids;

(3) Ï㽶ֱ²¥ purchases of services greater than $100,000: Purchasing will solicit formal bids. Bids/Proposals will be requested from vendors providing the required classification and servicing the geographic area concerned.

c. Catalog Purchasing. Ï㽶ֱ²¥ will solicit catalogs and evaluate pricing from approved VetHUBs in accordance with the catalog purchasing procedures. An approved VetHUB vendor will be used to the fullest extent possible.

d. Construction, Consulting, and Professional Services:

(1) Construction. Ï㽶ֱ²¥ will solicit bids by (a) advertising in the legal notice section of the local newspaper or (b) specifically mailing bid packets, which will include at least two disabled American veterans. The VetHUB Coordinator or their representative will inform general contractors of state policy to award VetHUBs a good faith effort.

(2) Consulting. If HSC OP 50.27 requires solicitation of proposals, the department will utilize and demonstrate that the VetHUB directory was used as a resource.

(3) 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 VetHUB directory will be used as a resource in selection of these professionals.

Note: In the event a/an (operating unit, i.e., division, program, facility, etc.) is unable to locate a VetHUB vendor from the TPASS's certified VetHUB Directory or the CMBL, the unit must make a written notation or attach documentation with the spot purchase form or the contract of all referenced sources used and document the unavailability of VetHUBs.

5. Data Collection and Reporting. The VetHUB Coordinator of Ï㽶ֱ²¥ will comply with all VetHUB reporting requirements, including supplemental and annual reports. The VetHUB Coordinator will also track the extent of the VetHUB participation by contractors and all major departments in their acquisition programs.

Attachments

Attachment A - HSP Change Order Request Form for Contract Modifications