The HUBZone program was created to help drive small business growth in historically underutilized business zones by limiting competition for certain government contracts to qualifying businesses.
At least 3% of all federal contracting dollars each year are designated for this program. In addition to being eligible for these contracts, HUBZone-certified small businesses are also granted a 10% price evaluation preference in full and open contract competitions.
What are the benefits?
If your business is located in a HUBZone, joining the HUBZone program will make you eligible to compete for the program’s set-aside contracts, including competitive set-asides and sole-source set-asides.
Competitive set-asides are typically designated automatically for all government contracts under $150,000 — or whenever at least two small businesses could perform the work or provide the products being purchased.
Sole-source contracts are contracts that can be issued without a competitive bidding process. This usually happens in situations where only a single business can fulfill the requirements of a contract.
In 2019, Small Business Association (SBA) amended regulations to make it easier for small businesses to utilize the HUBZone program. Theses changes, implemented in 2020, were designed to make the program more attractive to small businesses, providing greater impact in these communities and making it easier for federal agencies to meet their 3% contracting goals.
- Faster certification decisions processed within 60 days of a complete submission
- New interactive tools and revised checklists to streamline the application process.
- Expanded early-engagement assistance to help applicants navigate the certification process more smoothly.
- The ability to count long-term HUBZone resident employees as permanent HUBZone residents, with proper documentation.
- Greater predictability of HUBZone designations with HUBZone maps frozen through 2021 and updated every five years.
- New Governor-designated HUBZone areas including more rural communities with high unemployment.
- Up to 10 years HUBZone eligibility for small businesses that purchase a building or enter a long-term lease (of 10 years or more)
How do I qualify?
To qualify for the HUBZone program, your business must:
- Be a small business
- Be at least 51% owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, an Alaska Native corporation, a Native Hawaiian organization, or an Indian tribe
- Have your principal office located in a HUBZone
- Have at least 35% of your employees living in a HUBZone
You’ll need to recertify for the HUBZone program once a year and a program examination will be required every three years. The good news is, there’s is no limit to the length of time a business can participate as long as it continues to qualify.
Tips for certification
An experienced organization like Sage Business Consulting can help to guide you through HUBZone certification. We recommend the following steps to simplify and accelerate the application process.
1. Start with a preliminary assessment to determine whether you meet the criteria above using the SBA’s certification website.
2. Make sure you’re prepared to do business with the government before you apply. This includes identifying agencies which purchase the products or services you sell and understanding the requirements for working with these agencies. More information about government contracting can be found here.
3. Ensure you have a DUNS number, select a NAICS code, and register with SAM.gov.
4. Gather all required supporting documents before you begin the application process and don’t forget to review to make sure you’ve checked all the right boxes and included your signature. Incomplete applications will be withdrawn and you’ll need to start the submission process over again.
5. Stay on top of your email inbox — including your spam folder. Once your application has been submitted, you’ll receive a notice that you have 2 days to go back into the system to verify your application verified. Once verified, you’ll receive a second email prompting you to submit documentation within 3 days to keep your application moving forward.
Once certified, your business will be ready to begin taking advantage of this program by competing for set-aside contracts, winning federal dollars, and growing revenue accordingly.