SBA's HUBZone Program

SBA's (Small Business Administration) Historically Underutilized Business Zones (HUBZone) program helps small businesses in urban and rural communities gain preferential access to federal procurement opportunities. If offers a couple of benefits to HUBZone-certified companies. First, some contracting opportunities are set-aside solely for HUBZone contractors. Some of those set-asides are sole-source procurements. Secondly, it offers a 10 percent price evaluation preference in full and open contract competitions as well as subcontracting opportunities. That means a HUBZone contractor's bid can be 10 percent higher than the lowest bid and still be competitive.

The amount of dollars flowing through the HUBZone program is not insignificant. The federal government has a goal of awarding three percent of all dollars for federal prime contracts to HUBZone-certified small business concerns.

Companies must meet four requirements in order to participate in the Government's HUBZone Program.

1. A firm must be classified as a small business.
2. A firm must be controlled and owned at least 51 percent by US citizens.
3. A firm's principal office must be located in designated HUBZone areas.
4. At least 35 percent of the firm's employees must reside in a designated HUBZone area.

Before a firm can participate in this program and bid on designated government contracts, it must seek and obtain a certification from the Small Business Administration (SBA) verifying that the firm was HUBZone Program eligible. The SBA relies on information that is provided by applicant firms to determine and certify eligibility. It may or may not "audit" these applications.

Firms that win a contract because of their HUBZone status often come under extra scrutiny, not by the SBA or another Governmental agency but by unsuccessful bidders. It is not uncommon for contract awards to be challenged and one the first things that attorneys will look at is the winning bidder's 'standing'. It doesn't take a skilled gumshoe to figure out whether a firm meets the criteria for the HUBZone program.

You can read more about SBA's HUBZone program here including maps of the current HUBZone areas. Who knows. Maybe your firm qualifies.