Hubzone

Benefits of HUBZone Certification

  • Set-Aside Contracts
  • Sole-Source Contracts
  • 10% price evaluation preference in full and open contract competition as well as in subcontracting opportunities.
  • 3% congressional budget target ($11.1 billion target)
  • Limited competition (approximately 6,000 firms are certified)

Price: $1,600

Call for a Free Consultation 703-688-3546

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Participants can receive Sole-Source Contracts up to a ceiling of $3.5 million for products and services, and $5.5 million per contract for manufacturing. The contracting officer must have reason to believe at least two HUBZone firms will bid on the contract.

Competitive Bid during price value adjustment:

Example A: In a full and open competition, a qualified HUBZone Small Business Concern submits an offer of $980, a non-HUBZone Small Business Concern submits an offer of $950, and a large business submits an offer of $930. The lowest, responsive, responsible offer would be the large business at $930. However, the Contracting Officer must apply the HUBZone price evaluation preference of 10%. Therefore, the qualified HUBZone Small Business Concern’s offer is regarded as the lowest bid.

HUBZone Small Business Small Business – non-HUBZone Large Business
Bid $980 $950 $930
Price Preference 10% N/A N/A
Adjusted Bid $882 $950 $930
Winner

Example B: In a full and open competition, a qualified HUBZone Small Business Concern submits an offer of $1040, a non-HUBZone Small Business Concern submits an offer of $1000, and a large business submits an offer of $930. The lowest, responsive, responsible offer would be from the large business. The Contracting Officer must then apply the HUBZone price evaluation preference. In this example, the qualified HUBZone SBC’s offer is more than 10% higher than the large business’s offer and, consequently, the qualified HUBZone SBC does not displace the large business as the lowest, responsive, and responsible offeror. In addition, the non-HUBZone SBC’s offer at $100 does not displace the large business’s offer because a price evaluation preference is not applied to change an offer and benefit a non-HUBZone SBC.

HUBZone Small Business Small Business – non-HUBZone Large Business
Bid $1040 $1000 $930
Price Preference 10% N/A N/A
Adjusted Bid $936 $1000 $930
Winner

Example 3: In a full and open competition, a qualified HUBZone SBC submits an offer of $98 and a non-HUBZone SBC submits an offer of $93. The CO would not apply the price evaluation preference in this procurement because the lowest, responsive, responsible offer is an SBC.

Joint Ventures up to three contracts can be awarded per joint venture agreement

The Mentor /Protégé program is similar to a Joint Venture: A, firm can only have one per industry; however, size standards are not combined as with Joint Venture Agreements, and a mentor can own up to 40% of an 8(a) firm.

Percentage of Procurement: 5% congressional budget target with the target exceeded for 8(a) firms every year in the past decade.

Qualifications for HUBZone

1. 51% Ownership by a U.S. Citizen

2. The firm must be classified as a small business according to the SBA.

3. Principle office located in a Historically Underutilized Business Zone – look up your principle office location here. http://map.sba.gov/hubzone/maps/

a. Principle location is the location where the most number of employees for the firm work.

b. At least one employee must work at the principal office in the HUBZone on a full-time basis.

c. Typical evidence requirement by the SBA is a lease or mortgage in the firm name, as well as a utility bill.

4. 35% of the firm’s employees must reside within a HUBZone.

a. Definition of an employee is a person who works over 40 hours per month. The employee can be a temporary employee or work for an employee leasing company.

b. Example: A firm has three employees, 7 x .35 = 2.45. Therefore, the firm must have three employees residing in a HUBZone.

c. Normally a copy of an employee’s State ID or State Driver’s License is considered as evidence of where they reside.

5. The owner of the HUBZone firm must be independent meaning they have the right to make current and strategic decisions for the company. Current conditions do not exist that could change the ownership of the firm.

6. The SBA can affiliate a firm if an owner owns more than 10% of the HUBZone firm, as well as owns another firm in a similar industry. If these two firms conduct a material amount of business together, the SBA can affiliate the two businesses. If affiliated the two business combined must be under the SBA size standard and have 35% of the combined employees residing within a HUBZone.

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HUBZone Frequently Asked Questions

1. Is there a time limit for how long a HUBZone Certified firm can keep its HUBZone Status?

No – as long as your firm maintains eligibility there is no time limit for the HUBZone certification.

2. How often must I recertify my firm?

Every three years.

3. How often is the HUBZone census tracks changed?

Every 10 years as part of the U.S. Census.

4. What would cause an affiliation between my company and another firm?

13 CFR 121.103 rules apply for HUBZone firms. The SBA will review the following areas to determine HUBZone ownership.

1) Stock ownership to make certain the qualifying party has control of the HUBZone firm.

(2) Convertible securities such as options or debt will be viewed by the SBA as fully exercised.

(3) If common management exists between two firms the SBA can affiliate the two entities.

(4) Identity of interest between individuals or businesses where patterns exist for subcontracting, staff, locations, and other veiled attempts to disguise the true nature of the relationship.

(5) Contractual relationships or economic dependency where one firm represents a large portion of another firm’s revenue or has lent money to another firm.

(6). A new concern with similar ownership and whereby the older firm furnishes the new firm with contracts, technical assistance, indemnification or facilities can create an affiliation.

5. What if 34.5% of my employees reside within a HUBZone?

To be considered eligible for HUBZone certification, more than 35% of the firm’s employees must reside within a HUBZone.

Our Easy 8(a) Service Process Book a Call

Shape Round
Free consultation to determine eligibility and, review potential obstacles
Retainer letter and non-disclosure agreement to protect our client's privacy
Consultation with application checklist preparer. Interviews with Social, Economic and Two-Year Waiver narrative writers
Final review of the application
Answer SBA Business Opportunity Specialist's inquiries
Receive SBA Certification Letter