Feb 2022: The Value of HUBZone
There are different certifications and programs available to small businesses to support them in federal contracting; one of these is the HUBZone, or “Historically Underutilized Business Zone.” Sounds impressive, but what does it mean? The goal of the HUBZone program is to increase the number of federal contracts in urban and rural communities. This is
accomplished by giving preference to small businesses that obtain their HUBZone certification.
HUBZone has two parts – a program and a certification. The HUBZone program is meant to support small businesses located in qualified areas or HUBZones. Small businesses located in these areas must qualify to become certified HUBZone businesses. The Small Business Administration (SBA) sets an overall goal of 3% of government spending to be awarded to HUBZone-certified small businesses. Since the program started in 1998, it has never met its goal.
So, what is the value of being a certified HUBZone small business? “The certification gives a business a 10% price evaluation preference, a great pricing advantage, over large businesses on a full and open contract opportunity,” states Sherri Komrosky, Deputy District Director of the SBA’s North Dakota District Office. Additionally, there are federal contracts set aside specifically for HUBZone businesses; government prime contractors must also set aside subcontracting opportunities for HUBZone businesses.
To be a HUBZone Small Business:
- Your business must be a small business. Check your industry’s size standard for small on the SBA’s site.
- Your business must be 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.
- Your principal business location must reside in a HUBZone. A principal location is the physical business address with the most employees. If your business has two locations, one is a corporate office with 5 employees and the other an office with 25 employees, the principal address is the one with 25 employees. Check your location.
- 35% of your employees must live in a HUBZone. Your employee does not need to live in the same HUBZone as the principal business address; they simply must live in a HUBZone.
Reference materials:
Deputy District Director Komrosky noted, “Presently, there are only 22 HUBZone certified firms in ND. I would love to see this number grow! Take advantage of the Procurement Technical Assistance Center team, they can help you with the application process!”
As always, if you are not sure where to start or how to get organized, connect with the North Dakota Procurement Technical Assistance Center (ND PTAC). Our services are at no cost to businesses based in the state of North Dakota. Register to schedule an appointment. Additionally, take advantage of the many training opportunities and events listed on the ND PTAC website.
Not from North Dakota? Find your closest PTAC on the APTAC website and then click on your state.