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Summary: Historically Underutilized Business

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According to Texas Comptroller of Public Accounts, a Historically Underutilized Business (HUB) is defined as a business that is “ a for-profit entity that has not exceeded the size standards prescribed by 34 TAC §20.23, and has its principal place of business in Texas, and is at least 51% owned by an Asian Pacific American, Black American, Hispanic American, Native American, American woman and/or Service Disabled Veteran, who reside in Texas and actively participate in the control, operations and management of the entity's affairs.” In an effort to try to incorporate smaller business into the bidding process, some owners, typically public government owners, put into the contract a percentage of work that must be done by an HUB. In 2014, because …show more content…

It is beneficial for the business to do this because it increases exposure to the public which helps the business become recognize and makes them more likely to get work. The state of Texas has a master list which is available to prime contractors to seek out HUBs in order to complete the contract requirements. For example, when state entities have a contract larger than $100,000, they must demonstrate that they have reached out to HUBs. The certification is good for four years and it there is no cost to the business to become certified. Certain businesses, identify themselves as Minority Business Enterprise (MBE), Women Business Enterprise (WBE), Small Business Enterprise (SBE), Disadvantaged Business Enterprise (DBE), or Disabled Veteran Business Enterprise (DVBE), all these businesses fall under the HUB definition. The reason for a more specific definition of these businesses is that other owners may require of the contractor to have a certain percentage of MBEs specifically. If a business is minority owned and meets the requirements for HUB, it is important that the business applies to become HUB …show more content…

In the event that many change orders occur, the added work increases the cost of the project. Thus, it may decrease the amount of work being done by the HUBs and the contractor will then break contract. To keep the percentage, the contractor should take into the subcontractor's scope of work to see if any HUBs are able to complete the work. If not, the contractor should then reach out to other subcontractors. The problem with this is in bringing in a new subcontractor. Not only is this a risk because they will be bringing in new employees to the work on the project, but also the new HUB will the contractor will have to start from new to ensure that the HUB is up to date and meets all the project

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