Authority/Reference(s) Texas Government Code 261.252
Revision Date May 1, 2020

POLICY

DFPS may allow an entity (prime contractor) contracting with DFPS to use subcontracts to provide part or all of the services procured under the prime contract. Subcontracting does not relieve the prime contractor of responsibility for ensuring goods or services are provided. Subcontracts are separate contractual agreements in which DFPS has no direct legal relationship with subcontractors.

The prime contractor is selected for its technical and management abilities, including the right to manage contractual deliverables and performance through subcontractors. Contract staff should focus on a prime contractor's ability to ensure a subcontractor meets required minimum qualifications to perform and meet the standards fixed by the prime contract. Contract staff must review the prime contractor's subcontracting policies and processes to establish the ability to fulfill the standards set out in the prime contract.

HUB Subcontracting Plan (HSP)

When HUB subcontracting opportunities have been determined, the HUB Coordinator informs the prime contractor that they must notify all subcontractors reflected on the HSP within 10 days of contract award.

  • The prime contractor must submit a copy of the notification to the DFPS HUB Coordinator.
  • The HUB Coordinator will upload the notification into SCOR; and
  • The HUB Coordinator will notify the Contract Manager of the correspondence and documentation.

For information on using Historically Underutilized Business (HUB) subcontractors, refer to policy HUB Subcontracting Compliance.

DFPS retains the right to disapprove a subcontract at its discretion; however, contract staff must consult with Contracts Legal when making such a decision.

Subcontracting Requirements

If a subcontract is used to deliver any or all of the work required under a contract, the following conditions apply:

  • Prime contractors must identify the proposed subcontractors to DFPS in a manner agreeable to the contract division involved;
  • Subcontracting will be solely at the prime contractor’s expense, including remedies, penalties and incentives as applicable;
  • A payment to a subcontractor is overdue on the 31st day after the prime contractor receives remittance from DFPS for the contracted goods or service;
  • DFPS retains the right to check subcontractor’s background and approve or reject the use of submitted subcontractors;
  • Prime contractor will determine a designated point of contact for all DFPS inquiries;
  • Prime contractor must include a term in all subcontracts that incorporates the prime contract by reference and binds the subcontractor to all the requirements, terms, and conditions of the contract related to the service being provided by the subcontractor, as well as explicitly hold that the contract controls in the event of any conflict with subcontract;
  • The subcontractor is held to requirements under applicable state and federal requirements;
  • Use of any subcontractor is conditioned upon the extent that any subcontract does not conflict with any requirements of the contract between DFPS and prime contractor; and,
  • Complaints received against subcontractors are the prime responsibility of the contractor but does not prohibit DFPS staff to investigate.