HUBZone Certification & HUBZone Requirements

How to Get SBA HUBZone Certified

Having SBA HUBZone certification opens many doors for you as a contractor.  It is important to understand the requirements that you must fulfill in a proposal submission and what is owed to you by the government in a request for proposal. 

HUBZone stands for Historically Underutilized Business Zone.  When a business is SBA HUBZone certified, SBA HUBZone certification helps small companies in urban and rural communities to gain preferential access to federal contracting opportunities.  The SBA HUBZone certification encourages investment, economic development, and employment growth for underutilized and distressed areas.

The SBA HUBZone Program encourages investment, economic development, and employment growth for underutilized and distressed areas.

There are three exclusive measures to aid SBA HUBZone certification with obtaining federal contracts:

• HUBZone sole source awards
• HUBZone certification set asides
• HUBZone certification price evaluation preference in full and open competitions

SBA HUBZone Requirements:

• Small by SBA standards
• Owned and controlled at least 51% by US citizens, Community Development Corporation, an agricultural cooperative, or an Indian tribe
• The main office must be located in a HUBZone (see a map)
• At least 35% of employees must live in the HUBZone

When can the SBA can De-certify your HUBZone Status? Because of the many benefits that come with SBA HUBZone certification, there are many requirements that must continue to be met, otherwise you may face de-certification.

• The SBA performs routine, unannounced site visits to any of the company’s offices to make sure the requirements are met
• You must re-certify every three (3) years
• Any material changes must be reported
• SBA can perform a program examination after SBA HUBZone certification has been issued to make sure all eligibility requirements are still met
• SBA also relies on third-party referrals about compliance

A business may be SBA HUBZone certified for as long as it qualifies.  SBA HUBZone Certification ends, however, either when the company voluntarily de-certifies or the SBA de-certifies the business.  If the SBA decertifies the business, the business can apply for re-certification 90 calendar days after the date of decertification.

When should the SBA HUBZone Certification Price Preference be included in Solicitations? 

Not all solicitations provide for the price evaluation preference mandated by the HUBZone Act.  However, contractors can ask that the Agency amend the solicitation to provide for the preference.  The SBA HUBZone Certification Act does not limit the type of contract it applies to; the Act applies broadly to all federal contracts that involve full and open competition.

The Small Business Act provides that when the price offered by an SBA HUBZone certified business shall be deemed as lower than the price offered by another offeror (other than another small business), so long as the price is not 10% higher than the price offered by the otherwise lowest, responsive, and responsible offeror.  15 U.S.C. § 657a(b)(3)(A).

The SBA HUBZone certified business must also agree to certain conditions to receive the 10 percent evaluation preference:

• At least 50% of personnel cost will be spent on employees of the primary HUBZone company or other SBA HUBZone-certified companies
  • Except construction, which has a 15% requirement for general construction and a 25% minimum requirement for construction by special trade contractors
• At least 50% of the cost of manufacturing (excluding the cost of supplies) will be performed by the primary HUBZone company or other SBA HUBZone companies

Learn more about 8a set asides versus HUBZone contracts.

Avoid being denied the contract – Draft a clear proposal: In a recent bid protest, the company submitted their proposal, but was not awarded the contract even though they were SBA HUBZone certified.  The GAO noted that although the company was certified, they had not also agreed to the performance conditions required by the FAR.  Wakan, LLC, B-408535.2 (2014).  Compliance with the conditions is material to the solicitation and the SBA HUBZone offeror must comply with them to receive the evaluation preference.

These agreements must be made clear in the SBA HUBZone certified company’s proposal.  It is up to the business to submit a well-written proposal with adequately detailed information to show that they will comply with the solicitation and any requirements.

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For help with your SBA HUBZone certification or proposal writing, please contact our certification and proposal writing experts 1-866-601-5518 for a free consultation.