Businesses seeking government contracting opportunities may have a greater chance of landing contracts than they realize. Nearly all levels of city, state, and federal governments have goals to purchase goods and services from companies that qualify under a variety of certifications generally known as historically underutilized businesses. Becoming a certified HUB business gives you a competitive advantage in selling to cities, state agencies, school districts, universities, and federal agencies.
The acronyms can be confusing, and rules regarding eligibility vary from city to state, among states, and within the federal government. For convenience in this article, we’re using the term HUB to identify various common programs. But generally speaking, if your business is at least 51 percent owned or controlled by a person or people who fall into one of the following groups, you may qualify under some local, state, and federal programs:
- Woman-Owned Business Enterprise of any ethnicity (or WBE)
- Minority-Owned Business Enterprise (or MBE), including those who are Asian Pacific American, black, Hispanic American, and Native American
- Veteran-Owned Small Business (or VOSB)
- Service-Disabled Veteran-Owned Small Business (or SDVOSB)
In addition, the federal government sets goals to purchase goods and services through the HUBZone program, which helps companies that are located in federally identified economically distressed areas. An owner whose business is located in a HUBZone does not have to fall into one of the groups mentioned above to be eligible for HUBZone contracts.
HUB program goals at all government levels vary based on the types of goods and services a given city, state, or federal agency is trying to purchase. For example, the Texas HUB program goals for fiscal year 2009 were as follows:
- Construction: 11.9 percent
- Building construction: 26.1 percent
- Special trades: 57.2 percent
- Professional services: 20 percent
- Other services: 33 percent
- Commodities: 12.6 percent
Because most state agencies have a difficult time reaching their purchasing goals, they dedicate HUB staffs to help qualifying companies obtain certification and contracts from their agencies. Many city governments operate similar programs, though certification rules vary. Often, states allow businesses that have been certified under a local HUB program to participate automatically in their state program.
The paperwork required for most HUB certification programs is nominal and includes:
- Proving you are a qualifying individual who owns at least 51 percent of company shares
- Proving that your residence and business are located in the jurisdiction in which you are applying for HUB status
- Proving you are a U.S. citizen
- Providing documentation that shows your day-to-day involvement with the business is consistent with your ownership percentage
- Providing corporate articles of incorporation, bylaws, organizational meeting minutes, and annual meeting minutes (if you are not a sole proprietorship or general partnership)
Once you become a certified HUB, check to ensure that your information is entered in your state and local jurisdictions’ master bidders list and the federal Central Contractor Registration. States and municipalities often use this list to find businesses that can provide goods and services. In addition, carefully pick the National Institute of Governmental Purchasing codes for products and services you can provide. Finally, make sure all your contact information on the bidders lists is up-to-date.
Sam Thacker is a partner in Austin, Texas-based Business Finance Solutions.