Historically Underutilized Business (HUB) Program
The State of Texas Disparity Study – 2009
In September 2008, our office retained MGT of America, an independent vendor, to determine if there is a compelling interest to continue a narrowly tailored HUB program, as required by the U.S. Supreme Court. The purpose of the study was twofold: to comprehensively review the state’s utilization of HUBs and to evaluate various options for program development.
In 1991 Texas instituted the HUB program to increase the opportunities available to businesses owned by minorities and women in the area of state procurement and contracting. In accordance with Title 34, Section 20.13 of the Texas Administrative Code, 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. The Texas HUB program sets aspirational goals by procurement category and allows for HUB subcontracting plans for contracts above $100,000.
The 2009 Disparity Study examines the effect of remedial race- and gender-based efforts by Texas to redress ongoing influences of past discrimination in the marketplace. The findings are the basis for any rule revisions required of this agency by Chapter 2161, Government Code.
All state agencies, along with medical and health centers and institutions of higher education, were included in the study.
The participating state agencies and institutions of higher education were clustered into four groups:
- State Agencies (148)
- Universities (52)
- Medical and Health Centers (9), and
- the Texas Department of Transportation (TxDOT)
This clustering strategy was adopted due to variation in size and volume of procurement activities by participating state agencies and institutions of higher education. Please see Appendix A for a complete list of all participating agencies and institutions of higher education.
The 2009 Texas Disparity Study confirms the need for the continuation of the Statewide HUB Program. This conclusion is based primarily on:
- statistical disparities by race, ethnicity and gender classification in current HUB utilization, particularly in prime contracting
- statistical disparities by race, ethnicity and gender classification in the private marketplace, particularly in the area of utilization of women- and minority- owned firms in commercial construction
- statistical disparities in firm earnings by race, ethnicity and gender classification, even after controlling for capacity-related factors; and
- anecdotal testimony of disparate treatment as presented by business owners in interviews, surveys, public hearings and focus groups.
In conducting the study and preparing recommendations, MGT followed a carefully designed work plan that allowed its study team members to fully analyze availability, utilization, and disparity with regard to HUB participation.