HUBZoneContract Opportunities
The Historically Underutilized Business Zone program provides set-aside contracts and a 10% price evaluation preference for businesses located in economically distressed areas with employees living in HUBZones.
Definition
What are HUBZone contract opportunities? HUBZone contract opportunities are federal set-asides for small businesses located in Historically Underutilized Business Zones with at least 35% of employees residing in HUBZones. The program uniquely offers a 10% price evaluation preference in full-and-open competitions, plus sole-source awards up to $4.5 million for services.
Key Takeaways
- HUBZone firms receive a unique 10% price evaluation preference in full-and-open competitions, an advantage no other set-aside program offers.
- The federal government targets 3% of prime contract dollars for HUBZone-certified businesses.
- Sole-source awards are available up to $4.5 million for services and $7 million for manufacturing.
- Principal office must be in a HUBZone, and at least 35% of employees must live in HUBZones.
- Certification must be recertified every 3 years, with ongoing compliance monitoring by the SBA.
Eligibility Requirements
Location and employment requirements for HUBZone certification
| Requirement | Details |
|---|---|
| Principal Office Location | Must be located in a designated HUBZone. Use the SBA HUBZone Map at maps.sba.gov/hubzone to verify. The principal office is where the greatest number of employees work or management directs operations. |
| Employee Residency | At least 35% of all employees must reside in a HUBZone. This is verified through documentation and ongoing compliance reviews. Employees are counted based on home address, not work location. |
| Business Size | Must qualify as a small business under SBA size standards for your primary NAICS code. |
| Ownership | At least 51% owned by U.S. citizens, a Community Development Corporation, an agricultural cooperative, an Indian tribal government, an Alaska Native Corporation, or a Native Hawaiian organization. |
| Attempt to Maintain | Must make a good-faith effort to maintain the 35% HUBZone employee residency requirement during contract performance. "Attempt to maintain" means striving to reach 20% HUBZone residency during contract performance. |
| Recertification | Must recertify every 3 years by demonstrating continued compliance with all HUBZone requirements. The SBA may also conduct interim compliance reviews. |
The 10% Price Evaluation Preference
The HUBZone program offers a unique advantage that no other set-aside program provides: a 10% price evaluation preference in full-and-open competitions. This means your bid is evaluated as though it were 10% lower than the actual price.
Example:
- HUBZone firm bids: $110,000 (evaluated as $100,000)
- Non-HUBZone firm bids: $105,000 (evaluated as $105,000)
- Result: HUBZone firm wins because $100,000 < $105,000
- Contract awarded at: $110,000 (actual bid price)
This preference applies only to full-and-open competitions, not to set-aside procurements or simplified acquisitions. It effectively allows HUBZone firms to compete against larger, non-certified businesses with a built-in price advantage.
How to Find HUBZone Opportunities
From location verification to winning contracts
Verify Location Eligibility
Use the SBA HUBZone Map at maps.sba.gov/hubzone to confirm your principal office is in a designated HUBZone. Check employee home addresses to verify at least 35% reside in HUBZones.
Confirm Business and Ownership Requirements
Ensure the business is a small business per SBA size standards, at least 51% owned by U.S. citizens, an Indian tribal government, a Community Development Corporation, an agricultural cooperative, or an Alaska Native Corporation.
Document Employee Residency
Compile proof that at least 35% of employees live in HUBZones. Acceptable documentation includes driver licenses, utility bills, voter registration, or other address verification for each qualifying employee.
Apply Through SBA Certify Portal
Submit your HUBZone application at certify.sba.gov. Provide office lease documentation, employee roster with addresses, business formation documents, tax returns, and ownership verification. Processing takes 60 to 90 days.
Search for HUBZone Set-Aside Opportunities
Filter opportunities on SAM.gov or GCFinder by HUBZone set-aside type. Also look for full-and-open competitions where you can leverage the 10% price evaluation preference. Set up alerts for new HUBZone postings.
Maintain Compliance and Recertify
Monitor your principal office location and employee residency continuously. HUBZone certification requires recertification every 3 years, and the SBA may conduct compliance reviews at any time. Report any changes that affect eligibility.
Why HUBZone Matters for Contractors
The 10% price evaluation preference is unique to HUBZone and provides a competitive edge in full-and-open procurements that no other certification offers.
HUBZone has lower competition than programs like 8(a) and SDVOSB because of the geographic and employment requirements, meaning fewer firms compete for each set-aside.
Many agencies struggle to meet their 3% HUBZone contracting goal, which means contracting officers are actively seeking HUBZone firms to fulfill their annual targets.
HUBZone certification can be combined with other certifications like SDVOSB or WOSB, allowing you to compete for multiple types of set-aside contracts simultaneously.
Frequently Asked Questions
Common questions about HUBZone certification and contracting
What qualifies as a HUBZone area?
HUBZones are designated by the SBA and include qualified census tracts with low income or high unemployment, qualified non-metropolitan counties, Indian reservations and Alaska Native regional corporations, military facilities closed through Base Realignment and Closure (BRAC), and qualified disaster areas. Use the SBA HUBZone Map tool at maps.sba.gov/hubzone to check if a specific address is in a HUBZone.
What is the HUBZone 10% price evaluation preference?
In full-and-open competitions (not set-asides), HUBZone-certified firms receive a 10% price evaluation preference. This means if a HUBZone firm bids $110,000 and a non-HUBZone firm bids $100,000, the HUBZone firm is evaluated as if it bid $100,000 for comparison purposes. The actual contract price remains at $110,000. This preference does not apply in simplified acquisition or set-aside procurements.
What is the 35% employee residency requirement?
At least 35% of your employees must reside in a HUBZone at the time of certification and throughout the life of any HUBZone contract. Employees count based on where they live, not where they work. The SBA verifies this through documentation and may conduct compliance reviews. Falling below 35% can result in decertification.
How long does HUBZone certification take?
The SBA typically processes HUBZone applications within 60 to 90 days. More complex cases may take longer. Ensure all documentation is complete before submitting, including employee address verification, lease agreements for principal office, and proof of ownership. HUBZone certification must be recertified every 3 years.
What happens if my area loses HUBZone designation?
If your principal office area loses HUBZone designation, you can maintain certification for a limited period under the "redesignated area" provision. The SBA provides a transition period during which your business can still qualify. However, you must eventually relocate to a current HUBZone or lose certification. Employee residency requirements still apply.
Can I have multiple offices and still qualify for HUBZone?
Yes, but your principal office must be located in a HUBZone. The principal office is where the greatest number of employees work or where management directs operations. Satellite offices can be located anywhere, but the 35% employee residency requirement applies to your entire workforce regardless of office location.
Find HUBZone Set-Aside Contracts
Search live HUBZone opportunities, leverage the 10% price preference, and track deadlines with GCFinder.