The HUBZone Empowerment Contracting Program stimulates economic development and creates jobs in urban and rural communities by providing Federal contracting preferences to small businesses. These preferences go to small businesses that obtain HUBZone (Historically Underutilized Business Zone) certification in part by employing staff who live in a HUBZone. The company must also maintain a "principal office" in one of these specially designated areas. [A principal office can be different from a company headquarters, as explained in our section dedicated to Frequently Asked Questions.] The program resulted from provisions contained in the Small Business Reauthorization Act of 1997.

There are three types of HUBZone contracts:

• Competitive HUBZone contracts can be awarded if the contracting officer has a reasonable expectation that at least two qualified HUBZone small business concerns (SBCs) will submit offers and that the contract will be awarded at a fair market price.

• Sole-source HUBZone contracts can be awarded if the contracting officer determines that:

• one qualified HUBZone SBC is responsible to perform the contract,
• two or more qualified HUBZone SBCs are not likely to submit offers and
• the anticipated award price of the proposed contract, including options, will not exceed:

• Full and open competitive contracts can be awarded with a price evaluation preference. The offer of the HUBZone small business must not be 10 percent higher than the offer of a non-small business.

• Eligible HUBZone firms can qualify for higher SBA-guaranteed surety bonds on construction and service contract bids.

• Firms in Empowerment Zones and Enterprise Communities (EZ/EC) can also benefit from employer tax credits, tax-free facility bonds, and investment tax deductions.

To qualify for the program, a business must meet the following criteria:

• It must be a small business by SBA standards;
• Its principal office must be located within a "Historically Underutilized Business Zone," which includes lands on federally recognized Indian reservations;
• It must be owned and controlled by one or more U.S. citizens, a Community Development Corporation or an Indian tribe; and
• At least 35% of its employees must reside in a HUBZone.

Existing businesses that choose to move to qualified areas are eligible. To fulfill the requirement that 35% of a HUBZone firm’s employees reside in the HUBZone, employees must live in a primary residence within that area for at least 180 days or be a currently registered voter in that area.

Rebuilding America’s Communities
One Small Business at a Time

Westmoreland County Qualifies as a HubZone

Computer mapping software available on SBA’s website allows firms to search a database to determine whether they are located in a qualified HUBZone. The system allows searches by address, county, or town and displays metropolitan areas, Indian reservations, and counties that qualify by income, unemployment rate, or both.

Access the site at eweb1.sba.gov/hubzone/internet/ Select the option that let's you determine if you're in a HUBZone.

Applying to the Program

To apply, companies are encouraged to use the electronic application on the HUBZone website listed above. Doing so can shave days off the decision-making timeline. Paper applications, while still available, usually result in longer time frames for review and as such are strongly discouraged. Applicants can download the paper version from the website or obtain it from any local SBA district office before submitting it to SBA Headquarters in Washington, D.C.

As of October 1, 2000, the program applies to all federal departments and agencies.

To search for eligible HUBZone businesses, contracting officers can use SBA’s Procurement Marketing and Access Network (PRO-Net). The direct URL for that site is http://pro-net.sba.gov

The HUBZone program was enacted into law as part of the Small Business Reauthorization Act of 1997. The SBA regulates and implements the program, determines which businesses are eligible to receive HUBZone contracts, maintains a listing of qualified HUBZone small businesses federal agencies can use to locate vendors, and adjudicates protests of eligibility to receive HUBZone contracts.

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