Texas Administrative Code
Title 43 - TRANSPORTATION
Part 1 - TEXAS DEPARTMENT OF TRANSPORTATION
Chapter 9 - CONTRACT AND GRANT MANAGEMENT
Subchapter J - DISADVANTAGED BUSINESS ENTERPRISE (DBE) PROGRAM
Section 9.232 - Commercially Useful Function

Universal Citation: 43 TX Admin Code § 9.232

Current through Reg. 50, No. 13; March 28, 2025

(a) A DBE is considered to perform a commercially useful function (CUF) if the DBE is responsible for:

(1) the performance of the work subject to the contract and for the execution of its responsibilities by actually performing, managing, and supervising the work involved; and

(2) the provision of the materials and supplies used in the performance of its contract, unless the contract provides for labor services only and is approved by the department, and includes:
(A) the negotiation of the price of the materials and supplies;

(B) the determination of the quality, if applicable, and quantity of the materials and supplies;

(C) the ordering of the material and supplies;

(D) the installation of the material, if applicable; and

(E) payment for the material.

(b) In determining whether a DBE is performing a CUF, the department will consider:

(1) the amount of work subcontracted by the DBE;

(2) industry practices;

(3) whether the amount the DBE is paid under the contract is commensurate with the work actually being performed by the DBE;

(4) the amount of DBE credit claimed for the DBE's performance; and

(5) any other factor that the department determines to be relevant.

(c) A DBE does not perform a commercially useful function if its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of DBE participation. In determining whether a DBE is an extra participant, the department will examine similar transactions, particularly those in which DBEs do not participate.

(d) A DBE is presumed not to be performing a CUF if the DBE:

(1) does not perform or exercise responsibility for at least 30 percent of the total cost of its contract with its own work force; or

(2) subcontracts a greater portion of the work of a contract than would be expected on the basis of normal industry practice for the type of work involved.

(e) A DBE may present evidence to the department to rebut the presumption provided under subsection (d) of this section.

(f) A decision regarding a DBE's CUF is subject to review by the appropriate OA, but is not administratively appealable to DOT.

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