For qualified small businesses, the SBA HUBZone Program offers an excellent opportunity to secure government contracts. Although the Small Business Administration (SBA) maintains the HUBZone Empowerment Contracting Program, all federal buying agencies are part of the HUBZone Program and must abide by its requirements.
The SBA Reauthorization Act of 1997 created the HUBZone program with the intention of promoting economic development in historically underutilized business zones by establishing preferences for government contracts in these areas. The Federal Acquisitions Regulation (FAR) gave HUBZone the ability to contract in January of 1999.
The role of the SBA in overseeing the HUBZone Program is to:
- Determine the eligibility of businesses to receive HUBZone contracts
- Maintain a listing of qualified small business that federal agencies can use to locate vendors
- Settle any disputes regarding a business’s eligibility in the program
- Give updates to Congress as to the success of the program in developing employment and investment in underutilized areas.
Working with the Department of Housing and Urban Development (HUD), the SBA designates certain areas as being historically underutilized. These can include a qualified census tract, a difficult development area, a qualified county, a qualified Indian reservation, or a former military base closed by the Base Realignment and Closure Act (BRAC).
If you want to know if your business is located in a HUBZone area, log on to the HUBZone Web site and click on the option “Are you in a HUBZone?” By typing in a specific address, a county, or full state, you’ll have your answer.
In order to qualify for HUBZone contracts, your small business must meet certain eligibility requirements. These are:
- Your business must qualify as a small business under the SBA standards. For more information, read Registering with the SBA as a Small Business.
- 51 percent of your company must be owned by citizens of the United States of America
- The principal location of your business must be located within a HUBZone
- 35 percent of your employees must live within the area of the HUBZone
The SBA awards HUBZone contracts according to regulations set up by FAR. The three basic HUBZone contracts awarded are: (1) competitive contracts, (2) sole source contracts, and (3) full and open competition contracts.
Competitive Contract — This pertains to contracts where the SBA contracting officer identifies two or more qualifying businesses that then must compete for the contract.
Sole Source Contract — In this instance, the SBA contracting officer determines that there is only one HUBZone qualified business that meets the criteria of the contract.
Full and Open Competition Contracts — An open field where qualified companies can submit offers or bids and the best bid is accepted to do the job. HUBZone businesses are given preference in the contract process.
The prime contracting goal of the HUBZone Program is 3 percent of all government agency contracting. This means that your chances of gaining government contracts can increase by this much, giving your business that extra edge for success.