Congress created the HUBZone Program in 1997 as a way to rejuvenate low income and high unemployment areas. By providing small businesses with a Federal contracting program as an incentive to hire employees within this low income zones and reinvest in their local communities. Congress mandated all federal government agencies that have at least one contracting officer to utilize the program. As an added benefit Congress also revised the Subcontracting Program to include HUBZone businesses. As a result, any government contractor must incorporate the HUBZone Program into its subcontracting plan.
This program does not apply to state or local governments. However, state and local governments can utilize small HUBZone certified businesses for their own local programs. These programs are also designed to increase employment opportunities, investment, and economic development in these areas.
What Are The Requirements To Qualify?
A business must meet the following requirements:
- Be a small business for your primary industry (including all affiliates);
- Firm must be 51% or more owned by U.S. citizens;
- The Business principal office must reside within a qualified area. (See SBA’s HUBZone Map)
- At least 35% of your employees must reside within a qualified area.
Do I have to be an 8(a) company to qualify?
There is not a requirement for a small business to participate in any other SBA programs in order to qualify for this certification. However, the more certifications you have the more the government will like your business. Why? Because the Government has to set-aside 23% of all prime federal contracts to small businesses. The more certifications you have the more boxes the government contracting officer can check off. For example, a woman owned small business that is 8(a) certified wins a contract. The Contracting Officer can now claim a woman owned small business and an 8(a) business on their goals!
Of all the set-aside programs the HUBZone program is the hardest one for the Government to meet its goals. Therefore this is the one set-aside I would recommend any small business that can qualify for.
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