Thursday, November 4, 2010

Hubzone and SBA 8(a) Contracts

Under the Small Business Administration’s (SBA) 8(a) business development program, a business owned and controlled by socially and economically disadvantaged individuals can apply for certification from the SBA as an 8(a) business. A business certified as an 8(a) contractor can obtain certain preferences during the contracting process, and can bid on contracts that the agency has set aside for qualified 8(a) businesses. A business can remain in the 8(a) program for up to nine years.

Under the HUBZone program, companies that maintain their principal office in a designated HUBZone and employ 35 percent of their workforce from a HUBZone, among other requirements, can apply to the SBA for certification as a HUBZone small business company. A HUBZone company can then use this certification when bidding on government contracts. In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies. If you want to know where the HUBZone’s are or determine whether you are located in a HUBZone, go here. You might be surprised.

A recent case settled by the Justice Department illustrates the importance of ensuring the accuracy of self-certifications of eligibility for 8(a) and HUBZone status. A Maryland company agreed to pay the United States $200 thousand to settle claims it used false statements to obtain contracts from the Department of Defense. The contracts had been set aside for companies that qualified for the SBA 8(a) business development program as well as for businesses that qualified for the HUBZone program.

The SBA is cracking down on companies who seek to obtain government contracts intended for businesses run by socially or economically disadvantaged individuals or for companies located in areas that need jobs that are not "playing by the rules." "This case is one of a series that the government has pursued for false claims made to obtain HUBZone, 8(a), and other set-aside contracts.

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