Hubzone Information
In 1997 Sen. Christopher Bond (R-Mo) championed the idea of creating a program that helps small businesses located in HUBZones (Historically Underprivileged Zones). The idea was to provide opportunities to people living in these areas by supporting small businesses. This program is designed to help these areas to overcome high unemployment and low wage rates.
In 2005 the program was revamped with regulatory changes permitting up to 49% ownership in a HUBZone firm by a non-US Citizen, as long as the firm met the other requirements. Another change was HUBZone firms employing tribal members from reservations could become HUBZone certified without the necessary number of HUBZone residence. Once a Federal Contract was awarded the firm would then have to meet the 35% HUBZone residency provision. This allowed businesses startups to locate on or near Indian Reservations bid on Federal contracts. In addition firms in tracts no longer in Historically Underprivileged Zones due to economic improvement could keep their HUBZone Status until the 2010 Census was completed.
In 2006 the Federal Government increased the targets of the HUBZone program from 2% of the Federal Budget to 3% of the Federal Budget.
In 2008 due to low controls placed on firms the application process for the HUBZone program was revamped and more stringent guidelines were put in place for the HUBZone program.
Frequently Asked Questions
 Do I include myself in the calculation if I am the owner of the applying firm? |
| Yes |
| If we just moved into a HUBZone can my business qualify for HUBZone Status? |
| Yes |
| What are the benefits to being HUBZone Certified? |
Federal Contract Opportunities - Competitive HUBZone Firm Bids: Contracts are awarded as set-asides for HUBZone firms when the contracting officer has a reasonable expectation that at least two qualified HUBZone small business concerns (SBCs) will submit offers. The submitting officer believes that awarded party will be doing so at a fair market price.
- Sole-source Contracts: HUBZone contracts can be awarded if a determination is made that only one qualified HUBZone SBC is responsible to perform the contract and that it is unlikely that two or more qualified HUBZone SBCs are not likely to submit offers and the anticipated award price of the proposed contract not exceeding:
--- $5 million for a NAICS code for manufacturing or
--- $3 million for a NAICS code for all other NAICS codes
- Full and open competitive contracts can be awarded to the HUBZone business and that business is given a 10 percent higher than the offer of a non-small business.
- Subcontracting: Federal primary contractors must include a HUBZone subcontracting plan in all contracts that are awarded in access of $550,000.
Other Assistance – - SBA-guaranteed higher level surety bonds on construction and service contract bids.
- Employer tax credits for firms in Federal Empowerment Zones and Enterprise Communities
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| What does it take for someone to be considered a HUBZone Resident? |
- Live at current location over 180 days or currently registered to vote from that location
- Employee Should intend to live their indefinitely
Does the Employee have to reside within the same HUBZone that they work? No (an employee is eligible if they reside in any HUBZone.)
What does the term “Principle Office” refer? The single location where the greatest numbers of employees perform their job functions.
How does the Construction and Service Exemption Work? The principle office where the at least 1 person works within a HUBZone is considered the primary business location for purpose of the HUBZone certification as long as 35% of the employees working for the firm reside within a HUBZone.
Can a location that is not on the official HUBZone map be qualified as a HUBZone? Yes if unemployment for the county of the primary business location is greater than 140% of that state-wide average. |
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HUBZone Application Guide
Any number of simple mistakes can cause your firm to be forced to reapply, delaying your HUBZone approximately 6 months. Another type of application failure will cause your firm to become barred from applying again for a one year period. A failure of this nature will delay your HUBZone almost 2 full years! The HUBZone Application Guide is a step-by-step manual which will easily save its’ cost in the value of your time when applying for a HUBZone Certification and will give you peace of mind that you have not fallen into any SBA HUBZone application pitfalls.
