HUBZone stands for Historically Underutilized Business Zone and is a program that was created by the provisions contained in the Small Business Reauthorization Act of 1997. The purpose of the HUBZone program is to promote economic development and employment in distressed areas by providing access to federal contracting opportunities for small businesses.
If you are thinking of setting up or relocating your office you may want to locate within a HUBZone given the benefits. Regardless, it is worthwhile checking to see if you are in a HUBZone area already or whether any of your competitors are already qualified under the program.
Benefits
Being a HUBZone company provides several benefits that can give a business a distinct advantage when seeking federal contracts.
The federal government has a goal of awarding 3% of all dollars for federal prime contracts to HUBZone certified businesses. Benefits include the potential for set-aside or sole-source federal contract arrangements and the potential for price evaluation preferences of up to 10% on full and open competitive contracts. In addition, all subcontracting plans for large business federal contractors must include a HUBZone subcontracting goal. Eligible firms also can qualify for higher SBA-guaranteed surety bonds on construction or service contract bids and for certain tax-related benefits.
If you run an advanced search on FedBizOpps you will be able see whether any federal bids have been set-aside for HUBZone companies for your particular industry.
Eligibility Criteria
To be a HUBZone company, a business must meet the following criteria:
- Must be a small business in accordance with SBA standards
- Must be owned or controlled at least 51% by US citizens (or a Community Development Corporation or an Indian Tribe)
- Principal office must be located within a HUBZone
- At least 35% of its employees must reside in a HUBZone
How to find out if you are in a HUBZone area
Whether an area is a HUBZone is based on either income or employment data and the SBA relies upon definitions provided by various federal agencies. To ascertain whether you are in or near a HUBZone area click here and you are able to search either by a specific address or by county and/or state. Your search will return a map and list of places within the county designated as HUBZone areas. I suggest that you search by county as you may be surprised at the number of areas within your county that are qualified as HUBZone areas.
How To Apply
The SBA regulates and administers the program. They maintain a listing of qualified HUBZone businesses and also deal with the application process. To apply you must first have an active Dun and Bradstreet profile and DUNS number as well as a CCR profile. Once you have this, proceed to the rather outdated SBA HUBZone website to electronically apply.
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There have been talks about SBA reorganizing or eventually phasing out the HUBzone designation. More info regarding why can be found here:
http://www.allbusiness.com/company-activities-management/company-structures-ownership/11845221-1.html