(a) A CRP desiring to provide services under the state use program must comply with the following requirements to obtain approval from the Agency's executive director or deputy executive director:
  (1) A minimum of 35 percent of the contract price of the service must be paid to the individuals with disabilities who perform the service in the form of wages and benefits;
  (2) Supply costs for the service must not exceed 20 percent of the contract price of the service;
  (3) Administrative costs allocated to the service must not exceed 10 percent of the contract price for the service. The minimum percentage required by the Agency of the hours of direct labor for each contract necessary to perform a service must be performed by individuals with disabilities;
  (4) The Commission may establish a different percentage other than 75 percent for each CRP at the time of initial certification or subsequent re-certifications if the Commission determines that a percentage other than 75 percent for the offered service is reasonable based on consideration of factors, including, but not limited to:
    (A) past practices in a particular area;
    (B) whether other CRPs providing the same or similar services have required or achieved a different percentage requirement;
    (C) whether the Commission has established a policy goal to encourage employment of individuals with disabilities in a particular field; and
    (D) the CRP proposes to offer employment opportunities for individuals with disabilities that meet the WIOA definition of CIE;
  (5) Any necessary subcontracted services shall be performed to the maximum extent possible by other CRPs and in a manner that maximizes the employment of individuals with disabilities; and
  (6) A detailed report will be submitted to the Agency providing breakdown of 100 percent of contract dollars for services.
(b) A CRP must comply with the following requirements to obtain approval for state use products:
  (1) Either 75 percent or the minimum percentage required by the Commission of the hours of direct labor, for each contract, necessary to reform raw materials, assemble components, manufacture, prepare, process, and/or package a product, must be performed by individuals with disabilities;
  (2) Appreciable contribution and value added to the product by individuals with disabilities must be determined to be substantial on a product-by-product basis, based on requested documentation provided to the Agency upon application for a product to be approved for the state use program;
  (3) The Commission may establish a different percentage from 75 percent for each CRP at the time of initial certification or subsequent re-certifications if the Commission determines that a percentage different from the 75 percent for the offered product is reasonable based on consideration of factors, including, but not limited to:
    (A) past practices in a particular area;
    (B) whether other CRPs providing the same or similar products have required or achieved a different percentage requirement;
    (C) whether the Commission has established a policy goal to promote workplace integration for individuals with disabilities;
    (D) whether the Commission has established a policy goal to encourage employment of individuals with disabilities in a particular field;
    (E) the CRP proposes to offer employment opportunities for individuals with disabilities that meet the WIOA definition of CIE; and
  (4) A detailed report will be submitted to the Agency providing breakdown of 100 percent of contract dollars for products.
(c) The rules governing the approval of products to be offered by a CRP apply to all items that a CRP proposes to offer to state agencies or political subdivisions, regardless of the method of acquisition by the agency, whether by sale or lease. A CRP must own any product it leases. A proposal by a CRP to rent or lease a product to a state agency is a proposal to offer a product, not a service, and the item offered must meet the requirements of these rules. If the product is offered for lease by the CRP, the unit cost of the product, for purposes of applying the standards set forth in these rules, is the total cost to the state agency of leasing the product over its expected useful life.
(d) Raw materials or components may be obtained from companies operated for profit, but a CRP must own any product that it offers for sale to state agencies or political subdivisions through the state use program and make an appreciable contribution to the product that accounts for a substantial amount of the value added to the product.
(e) Prior to the inclusion of a product or service in the program, a CRP must describe the product or service that will be provided through the program in sufficient detail for the Agency to determine the item's suitability for inclusion in the program. The Agency may consider those factors deemed necessary to the determination of the program suitability of a product or service, including, but not limited to, state and federal statutes governing state agencies, geographic saturation of CRPs providing like products and services, and whether the products and services will generate sufficient demand to provide employment for individuals with disabilities.

Source Note: The provisions of this §806.53 adopted to be effective June 12, 2017, 42 TexReg 3003; amended to be effective January 25, 2021, 46 TexReg 584