Chapter 10: Contract Award and Subcontract Execution

Section 1: Subcontracts

In accordance with TxDOT Standard Specifications, the prime contractor must submit a copy of the executed subcontract agreement or purchase order for all DBE subcontracts including all tiered DBE subcontracts on federal-aid projects.

Subcontract Agreement

The prime contractor must incorporate the following TxDOT provisions in all subcontract agreements or material purchase agreements:
  • Disadvantaged Business Enterprise in Federal-Aid Contracts (
    000-394L
    )
  • Special Provision Measurement and Payment (
    Item 9L
    )
  • Contract Assurance (49 CFR, Part 26.13)
The prime contractor should review these provisions with the DBE.
It is considered a best practice to include language into the subcontract regarding the ability of a DBE to perform a CUF. Advise the DBE that it is expected to manage, supervise, and perform its work, with its own organization and resources. A DBE’s failure to perform a CUF is considered by TxDOT as a valid cause for termination. For more information regarding the CUF requirements, please refer to Chapter 6 of this Guide and 49 CFR, Part 26.55.

Multiple-Tier Subcontracts

The prime contractor is ultimately responsible for the actions of its subcontractors and any second-tier DBE subcontractors. The prime contractor should, therefore, ensure that any subcontract between a first-tier subcontractor and a DBE subcontractor contains language that the DBE goals are to be met and that the DBE performs a CUF. Additionally, the prime contractor should be certain that the first tier subcontractors understand the process of terminating a DBE subcontractor.

Submitted Contracts

The LG will check /verify the following to ensure the Contractor’s Assurance and DBE Program requirements have been satisfied:
  • Are the following provisions incorporated in contracts, regardless of tier?
    • Disadvantaged Business Enterprise in Federal Aid Contracts (000-394L)
    • Special Provision Measurement and Payment (Item 9L)
  • Is 49 CFR, Part 26.13(b) assurance language present in contracts, regardless of tier?
  • Is the DBE’s certification valid at the time of subcontract execution?
  • Is the DBE’s scope of work different from the commitment?
  • DBE's subcontract amount is the same as or greater than the amount in the commitment document (scope of work may differ if the line items are in addition to what was originally committed).
  • Is the subcontract default or termination clause consistent with 49 CFR, Part 26.53(f), and includes prior written consent from LG that termination and replacements are for good cause?
  • The dollar amount of DBE subcontract is equal or greater than the commitment and the scope of work does not differ from the commitment.
If deficiencies are found, the LG will contact the prime contractor in writing and request a copy of the modified subcontract.