OBJECTIVE
The Comptroller of Public Accounts for the State of Texas contracted with MGT to provide a comprehensive review of the State’s utilization of Historically Underutilized Businesses (referred to as HUB) to determine whether the State could continue its Historically Underutilized Business program and to evaluate and provide recommendations for future program development.

METHODOLOGY
This extensive research for this study included the examination of prime contractor and subcontractor utilization from 210 State agencies (148 State agencies, 52 universities, nine medical and health centers, and the Texas Department of Transportation); the review of availability data based on bids, bidders, prequalified firms, vendors, U.S. Census Bureau, business surveys, and Dunn & Bradstreet; the review of anecdotal evidence from public hearings, telephone survey of firms, focus groups, individual interviews with firms, a web survey, and policy interviews with Texas procurement; and the review of private sector disparities based on data from the U.S. Census Bureau, local building permits data, survey responses, Reed Construction Data, and the National Survey of Small Business Finance.

OUTCOME
The study results provided evidence to support the continuation of the Statewide HUB program due to statistical disparities in HUB utilization and private sector marketplace, as well as statistical disparities in firms’ earnings even after controlling for capacity-related factors.