43 Tex. Admin. Code § 9.38 – Contract Management

(a) DBE/HUB participation.
1. (1) HUB program goals may be satisfied by a HUB prime provider as long as the HUB prime provider performs at least 25% of the work with its own forces. DBE prime providers may receive DBE credit for work performed by its own forces or performed by a DBE subprovider.
2. (2) If the prime provider or the subprovider is a DBE/HUB, the DBE/HUB provider and subprovider may subcontract in accordance with §9.56 of this title (relating to Contract Compliance). If the DBE prime provider subcontracts a portion of the work to a non-DBE subprovider on a federal-aid contract, the value of the work performed by the non-DBE subprovider will not count towards the DBE goal.
(b) Subcontracts.
1. (1) A prime provider shall perform at least 30% of the contracted work with its own work force. No subprovider may perform a higher percentage of the work than the prime provider, unless approved by the CRC chair when the work is so specialized that the prime provider cannot perform at least 30% of the work.
2. (2) The department will review subcontracts for compliance with the requirements of this subsection. Subcontracts shall incorporate by reference all of the provisions of the prime contract.
3. (3) Subcontracts shall:
  1. (A) refer to the prime contract and have the same purpose;
  2. (B) include nondiscrimination attachment;
  3. (C) include DBE/HUB special provision;
  4. (D) include lower tier debarment certification (negotiated contracts); and
  5. (E) provide clear payment terms.
4. (4) Subcontracts shall not include:
  1. (A) multipliers, such as supplies plus 10%; and
  2. (B) the state as a party to the subcontract.
(c) Operations.
1. (1) Management responsibility. The department's project manager will be designated by the managing officer.
2. (2) Project manager. The prime provider's project manager may not be changed without prior consent of the department.
3. (3) Commencement of work. The provider shall not proceed with any contract work until advised in writing by the department to proceed.
4. (4) Suspension of work. The department may suspend the work by:
  1. (A) verbally notifying the provider; and
  2. (B) providing written notification of the suspension, including:
    1. (i) identifying the reason for suspension; and
    2. (ii) identifying approximate length of suspension and payment based on actual work completed as of the date of suspension.
5. (5) Payment on provider contracts. Payment for eligible costs will be made within 30 days after receiving a correct invoice. Payment may be withheld pending verification of satisfactory work performed. To receive payment for services, the provider shall submit to the department project manager:
  1. (A) a monthly progress report;
  2. (B) an itemized and certified invoice (department form 132 or other acceptable format); and
  3. (C) a DBE/HUB report (The CSTB may require proof of DBE/HUB use, including submittal of canceled checks that are properly identified by department project number or contract number).
6. (6) Interim audit. The department may perform interim audits.
(d) Supplemental agreements.
1. (1) The original executed contract will require a supplemental agreement if:
  1. (A) additional funding is required in accordance with terms of the contract;
  2. (B) additional time is needed to complete work in progress; or
  3. (C) changes in scope of services are necessary.
2. (2) The supplemental agreement will be executed:
  1. (A) prior to the expiration date of the original contract;
  2. (B) prior to exceeding the contract amount; and
  3. (C) prior to performance of unauthorized work.
(e) Errors and omissions.
1. (1) Policy. It is the department's policy to require providers to correct errors or omissions in the providers' services which are required under the contract without undue delay and without additional cost to the department.
2. (2) Procedure.
  1. (A) Notification. The department will notify the provider of the errors and omissions.
  2. (B) Resolution. A dispute involving errors and omissions shall be resolved in accordance with §9.2 of this title (relating to Contract Claim Procedure).
(f) Contract close out.
1. (1) Final audit. The department audit office will perform an audit of the provider's records in accordance with the terms of the contract.
2. (2) Time. A contract is ready for close out when:
  1. (A) services have been provided;
  2. (B) products have been received and accepted;
  3. (C) approval has been received from the U.S. Department of Transportation, when federally funded;
  4. (D) payments have been made;
  5. (E) audit findings have been resolved;
  6. (F) the contract expires unless extended by supplemental agreement; and
  7. (G) the final DBE/HUB report has been submitted.
(g) Provider performance evaluations.
1. (1) The department will document a prime provider's demonstrated competence and qualifications by evaluating the project manager's performance in the categories of management, innovation, quality, and timeliness.
  1. (A) The evaluation shall be conducted annually at twelve month intervals during ongoing contract activity, upon completion of a contract, or when the managing office determines that the work is behind schedule or not being performed according to the contract.
  2. (B) Optional evaluations may be conducted upon completion of a contract phase or to document exemplary performance.
2. (2) The department will evaluate the prime provider in the categories of cost administration and the firm's expertise as further demonstration of qualifications and competence.
3. (3) The department may evaluate project constructability every 12 months during the contract period and upon completion of the construction contract.
4. (4) The department may evaluate a subprovider's performance when it has completed its work, upon exemplary performance, or if the managing office determines that the subprovider is delaying the progress or completion of the work or that work is not being performed according to the contract.
5. (5) The department will give a copy of the performance evaluation to the prime provider or subprovider for review and comment. If the prime provider or subprovider responds with comments on its evaluation, the department will include the comments in the CCIS database identified in §9.41 of this title (relating to Precertification).
6. (6) Evaluation scores will be entered into the CCIS database and used in determining the qualifications of the prime provider or subprovider in accordance with §9.35 (relating to Short List Meeting, Proposals, and Evaluation) or §9.36 (relating to Interviews and Evaluation) of this subchapter.

Source Note:The provisions of this §9.38 adopted to be effective November 25, 1994, 19 TexReg 8768; amended to be effective September 22, 1995, 20 TexReg 7086; amended to be effective April 23, 1996, 21 TexReg 3221; amended to be effective January 13, 1997, 22 TexReg 64; amended to be effective June 21, 1998, 23 TexReg 6258; amended to be effective March 21, 1999, 24 TexReg 1821; amended to be effective December 12, 1999, 24 TexReg 10905; amended to be effective March 15, 2001, 26 TexReg 2053.