The Historically Underutilized Business Zone (HUBZone) Certification program was designed to help improve economic conditions in areas of high unemployment. The program offers non-competed (sole source) and reduced competition (set-aside) opportunities among others to certified firms.
Approximately only 6,000 firms in the program nationwide. The Federal Government struggles to meet its HUBZone Small Business goals, so recently legislation was passed to make it easier for firms to get certified and remain in the program.
Basic eligibility requires 35% of the company’s employees live in a HUBZone and the company’s principal office (where the majority of its employee’s work) be located in a designated HUBZone. View the HUBZone map here. The following are a few key challenges and changes put in place to increase program participation.
Issue 1: Small Businesses Found the Program Difficult:
Constantly changing maps and a difficult application process made the program difficult to enter and disincentivized companies from locating and remaining in a HUBZone. Therefore, communities experienced mixed results.
Solutions: Current HUBZone map will be frozen until 2021. Future map updates will occur every five years. The application will be transitioning to certify.SBA.gov, which is more user-friendly. Faster Certification: within 60 days of complete submission. Further, Governors can petition the SBA to add HUBZone areas based on a few parameters which show the area is distressed.
Issue 2: Federal Agencies not meeting the 3% goal
Solutions: Make it easier for certified firms to maintain eligibility by allowing an employee who resided in a HUBZone for at least six months before and after certification to continue to be considered as a HUBZone resident as long as continuously employed by the firm. Also, allowing HUBZone firms to retain their certification as long as they “attempt to maintain” the 35% requirement and at minimum employ at least 20% HUBZone residents.
The SBA has a push to bring on more qualified firms into the program quickly and has made some changes to ensure this happens. Further, the government is trying to ensure it meets its 3% goals by creating more opportunities for certified HUBZone firms. Have additional questions? Let’s connect to see if the program is a fit for you. https://provinceconsulting.com/contact-us/
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