Is your business located in HUBZone? You may be wondering why this is important. Well, businesses located in these Historically Underutilized Business Zones – or HUBZones, for short – are eligible to compete for contracts set out for companies that are HUBZone qualified.
The HUBZone program was enacted into law as part of the Small Business Reauthorization act of 1997. The program is regulated and implemented by the SBA. The SBA also determines which businesses are eligible to receive HUBZone contracts and maintains a list of HUBZone qualified small business that federal agencies can use to locate vendors.
To qualify to be a HUBZone participant, your business must meet the following criteria:
1) Your business must be considered small – according to SBA standards
2) Your business must be located in a HUBZone
3) The business must be owned and controlled by one or more US citizen, a Community Development Center or an Indian tribe and
4) At least 35% of the employees of the business must stay in a HUBZone.
This is great news for small businesses who'd like to gain a competitive advantage when it comes to government contracting but do not meet the race, gender or service requirements for certificates like 8 (a), WOSB or VOSB. Even established businesses who relocate to a HUBZone can qualify to participate.
So, the next logical question is what advantages does a HUBZone certification provide.
There are 3 types of HUBZone contracts:
1. Competitive HUBZone contracts,
2. Sole Source HUBZone contracts and
3. Full and Open Competitive contracts.
Competitive HUBZone contracts can be awarded if the contracting officer is reasonably sure that 2 or more qualified HUBZone small business concerns will bid on the contract and that the contract will be awarded at fair market price.
A Sole Source HUBZONE contract may be awarded if the contracting officer can determine the following:
1) One qualified HUBZone participant is responsible to perform the contract
2) Two or more qualified HUBZone participants are not likely to bid and
3) The anticipated award of the proposed contract, including options, will not exceed $ 5MM for manufacturing NAICS codes and $ 3MM for other NAICS codes.
Full and Open Competitive contracts may be awarded with a price evaluation preference. The offer from the HUBZone participant must not, however, be higher than 10% than the offer from a non-small business.
Now that you know the basics, check to see if your business is located in a HUBZone by going to http://map.sba.gov/hubzone/maps/ . Simply type in your business address and it will tell you whether or not you are located in a HUBZone. It also has a map that appears and highlights eligible areas in Green and those ineligible areas in Red. Most of the major metropolitan areas are not HUBZones, but be sure to type in your address because there are pockets of areas that may be eligible due to unemployment rates and other factors.
Is all of this worth the fuss? When I last checked there was a commercial cleaning company in the Metro Atlanta area with 3 active HUBZone contracts in the amounts of $ 1.372MM, $ 62K and $ 64K respectively. So do the research in your industry and decide if it's worth the effort.