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 certified small businesses that meet the program's location, employee-residency, ownership, and size requirements. The program also provides a 10% price evaluation preference in covered full-and-open competitions and sole-source authority up to $5.5 million for nonmanufacturing NAICS codes.
Key Takeaways
- FAR 19.1307 provides a 10% price evaluation preference in covered full-and-open competitions, subject to specified exceptions.
- The federal government targets 3% of prime contract dollars for HUBZone-certified businesses.
- Sole-source awards are capped at $5.5 million for nonmanufacturing NAICS codes and $8.5 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 current SBA HUBZone Map at maps.certify.sba.gov to verify. The regulatory definition of principal office depends on the firm's employee and work-location facts. |
| 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
In covered full-and-open competitions, FAR 19.1307 generally applies the preference by adding 10% to non-HUBZone offers for evaluation. Exceptions apply, including for an otherwise successful offer from a small business.
Example:
- HUBZone firm bids: $110,000 (evaluated at $110,000)
- Large business bids: $105,000 (evaluated at $115,500 after the 10% factor)
- Result: HUBZone firm has the lower evaluated price
- Contract awarded at: $110,000 (actual bid price)
The preference applies only where FAR 19.1307 requires it in a full-and-open competition. It does not reduce the HUBZone firm's actual offer or change the amount paid under the awarded contract.
How to Find HUBZone Opportunities
From location verification to pursuing eligible opportunities
Verify Location Eligibility
Use the SBA HUBZone Map at maps.certify.sba.gov 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 through MySBA Certifications with the location, employee, ownership, and business documents listed for your firm. SBA's 60-calendar-day decision period begins after it receives a complete package.
Search for HUBZone Set-Aside Opportunities
Filter opportunities on SAM.gov or Gov Contract Finder 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 can affect price comparisons in covered full-and-open procurements.
HUBZone set-asides restrict eligibility to firms that satisfy the program requirements and are certified by SBA.
The government-wide HUBZone goal is 3% of federal prime contracting dollars, although agency goals and actual opportunities vary.
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 several geographic categories defined by law and regulation. Because designations change, use the current SBA HUBZone Map at maps.certify.sba.gov to check a principal-office or employee address rather than relying on a static area list.
What is the HUBZone 10% price evaluation preference?
In covered full-and-open competitions, FAR 19.1307 generally applies the preference by adding 10% to non-HUBZone offers for evaluation, subject to exceptions including an otherwise successful small-business offer. The HUBZone firm's offered price is not reduced, and the award price remains the actual offered price.
What is the 35% employee residency requirement?
At least 35% of employees must reside in a HUBZone for certification and recertification. During performance of a HUBZone contract, the separate “attempt to maintain” rule applies: the firm must make good-faith efforts to maintain 35% and generally have at least 20% of employees residing in a HUBZone. Employee-counting rules and exceptions are defined in SBA regulations.
How long does HUBZone certification take?
SBA regulations state that the agency makes its determination within 60 calendar days after receiving a complete package. Time spent completing the application or responding to requests for more information is additional. HUBZone certification must be recertified every three 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 Gov Contract Finder.