The Five W’s of HUBZones: What Are They and How Do I Qualify?

A Historically Underutilized Business Zone (HUBZone), is a set-aside program designed to help businesses in economically underdeveloped areas. Set-asides like HUBZones are incredibly useful for government contractors who are trying to win federal contracts. Keep reading to learn more about this valuable program and  its eligibility requirements.

Who can participate?

  • Small businesses that have been certified according to SBA standards
  • Organizations that are owned and ran by 51% or more U.S. citizens, a community development corporation, an agricultural cooperative or an Indian tribe
  • Businesses where at least 35% of the business’ employees live in the HUBZone
  • Businesses where the main office is in the HUBZone

What does this Set-Aside Program Accomplish?

This program assists small businesses in areas of lower income or where there are high unemployment rates. The goal  is to increase employment, spur economic stimulation and growth, and create a better sense of community empowerment through greater economic development.

The Federal government is also required to award at least 23% of its contract dollars to small businesses.   Out of that 23%, the federal goal is to award 3% of contracting dollars specifically to HUBZone certified businesses. You can use this requirement to your advantage by seeking out agencies that have not reached their HUBZone contracting dollar goal.

When was the program established?

The HUBZone program came about as part of the Small Business Reauthorization Act of 1997. The SBA maps out all the requirements and qualifications of the HUBZone program and its history here. This document explains contract obligations, price evaluation preferences and much more. 

Where are HUBZone territories located?

To qualify for this program, your business must be located in one of the designated areas on the HUBZone Map. To meet all of the requirements of the HUBZone certification, it is imperative to determine how many of your employees live in your HUBZone and to make sure that your office headquarters is also located in a HUBZone designation. The goal of the program is to increase the economic development of the area, so ultimately the government would like to see HUBZone areas prosper without the special assistance of the program. Because of this, it is important to check back from time to time to make sure your headquarters and employees still are located and live in HUBZone areas.

Why should you take advantage of this program? 

The HUBZone program offers qualifying organization a more competitive chance to win government contracts and also provides the chance for contractors to be awarded sole source opportunities. To qualify for a sole source opportunity your company will have to be the only company that is able provide the goods or services required for a contract. The process of finalizing a sole source process is typically quicker than normal contract negotiations as well. This, in turn, can make the contract acquisition process much more efficient.

The HUBZone program also provides a 10% price evaluation preference in full and open contract competitions and subcontracting opportunities. Because of this preference, your HUBZone business could win a contract over an equally qualified larger business, even if your bid is up to 10% higher in price.

 

Ready to learn more? Check out our course for more information on how to qualify as a small business.

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June 5, 2017

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