Last month the Small Business Administration designated an area of Downtown Leesburg, Virginia as a HUBZone, or “Historically Underutilized Business Zone”. As reported by Ethan Rothstein in an article published in Leesburg Today, such a designation is significant because it will provide qualifying small businesses with an advantage in competing for government contracts.
Additionally, with the current and expected future decrease in the amount of funds available for contractors due to sequestration, the advantages provided by SBA programs such as HUBZone could be significant in helping to keep smaller contractors in business. With that in mind, I thought it would be a good idea to review some HUBZone basics.
HUBZone: Why Should Contractors Care?
The Federal Government has a target for awarding 3% of all federal prime contracts to HUBZone certified entities. Contractors who are certified as a “HUBZone small business” enjoy several significant benefits when competing for contracting:
- They are eligible for competitive and sole source contracting
- They receive a 10% price evaluation preference in full and open competitions
- They are eligible for subcontracting opportunities
What is Required to Become Certified as a HUBZone Contractor?
While the benefits of HUBZone certification can be advantageous, qualifying for the HUBZone certification takes some planning. There are four basic requirements:
- The company must be considered a “small business”
- The company must be owned and controlled (51% or greater) by U.S. Citizens (there are other categories, but this is the most relevant)
- The company’s principal office must be located in a HUBZone
- 35% or more of the company’s employees must reside in a HUBZone
Residing in a HUBZone means any HUBZone. It does not mean that the principal office and the residence of the employees must be the same HUBZone. Additionally, the company is required to attempt to maintain 35% residence requirement while performing HUBZone contracts. This means that as the company seeks to recruit additional or replacement employees, it will take steps to recruit within a HUBZone, which includes activities such as job fairs, advertising, etc.
Certification as a HUBZone entity is not an impossible task. Some companies may already satisfy the requirements. For those that do not, spending time evaluating whether qualifying will be beneficial is something worth doing. In this environment any advantage will be beneficial. It make sense to investigate all avenues for developing business.
The post How to Qualify for HUBZone Certification and Why It Matters appeared first on Federal Government Contract Digest.