The Historically Underutilized Business Zones (HUBZone) program helps small businesses in urban and rural communities gain preferential access to federal procurement opportunities. These preferences go to small businesses that obtain HUBZone certification in part by employing staff who live in a HUBZone. The company must also maintain a “principal office” in one of these specially designated areas.
Important Notice on Expiration of Redesignated HUBZones on October 1, 2011
The HUBZone Maps
In order to qualify for the HUBZone program, your business must be located in an area designated as a Historically Underutilized Business (HUB) Zones. You may determine if an address or a particular area is designated as a HUBZone by using the HUBZone maps
Understanding the HUBZone Program
The Historically Underutilized Business Zones (HUBZone) Empowerment Contracting program was enacted into law as part of the Small Business Reauthorization Act of 1997. The program falls under the auspices of the U.S. Small Business Administration. The program encourages economic development in historically underutilized business zones – “HUBZones” – through the establishment of preferences.
SBA’s HUBZone program is in line with the efforts of both the Administration and Congress to promote economic development and employment growth in distressed areas by providing access to more federal contracting opportunities.
How the HUBZone Program Works
The SBA regulates and implements the HUBZone program. SBA does the following:
- Determines which businesses are eligible to receive HUBZone contracts
- Maintains a listing of qualified HUBZone small businesses that federal agencies can use to locate vendors
- Adjudicates protests of eligibility to receive HUBZone contracts
- Reports to the Congress on the program’s impact on employment and investment in HUBZone areas.
Benefits of the HUBZone Program
The program’s benefits for HUBZone-certified companies include:
- Competitive and sole source contracting
- 10% price evaluation preference in full and open contract competitions, as well as subcontracting opportunities.
The federal government has a goal of awarding 3% of all dollars for federal prime contracts to HUBZone-certified small business concerns.
Eligibility for the HUBZone
Make sure to review the HUBZone Primer (transcript) to understand the HUBZone requirements. To qualify for the program, a business (except tribally-owned concerns) must meet the following criteria:
- It must be a small business by SBA standards
- It must be owned and controlled at least 51% by U.S. citizens, or a Community Development Corporation, an agricultural cooperative, or an Indian tribe
- Its principal office must be located within a “Historically Underutilized Business Zone,” which includes lands considered “Indian Country” and military facilities closed by the Base Realignment and Closure Act
- At least 35% of its employees must reside in a HUBZone.
To qualify for the program, a business (except tribally-owned concerns) must meet the following criteria:
- It must be a small business by SBA standards.
- It must be owned and controlled at least 51% by U.S. citizens, or a Community Development Corporation, or an agricultural cooperative or an Indian tribe.
- Its principal office must be located within a “Historically Underutilized Business Zone,” which includes lands considered “Indian Country” and military facilities closed by the Base Realignment and Closure Act. A principal office is the location where the greatest number of employees at any one location are performing work, with the exception of the construction and service industries.
- At least 35% of its employees must reside in a HUBZone. Reside means to live in a primary residence at a place for at lease 180 days, or as a currently registered voter, and with intent to live there indefinitely.
Maintaining the HUBZone Certification
If your business is HUBZone certified and there are no changes during your certification, you have no reporting obligations to SBA. However, you must report all “material changes” to SBA because they may affect your eligibility in the HUBZone Program.
What is considered a “material change?” For example:
- Change in the ownership
- Change in business structure
- Change in principal office
- Failure to meet the 35% HUBZone residency requirement
There is no limit to the length of time you are qualified as a HUBZone small business concern. You may remain certified as long as you continue to follow the HUBZone regulations, notify SBA of any changes, and you properly recertify the business.
Recertifying your HUBZone Certification
Even though there is no limit to the length of time you may qualify as a HUBZone firm, your certification is not a lifetime certification.
If you wish to retain your HUBZone certification, you must recertify every three years to SBA, indicating that the firm is still located a qualified HUBZone and is still a small business concern.