The Historically Underutilized Business Zones (HUBZone) program was established by the Federal Government Small Business Administration as part of the Small Business Reauthorization Act of 1997 to encourage economic development in areas designated by SBA as “HUBZones.” Federal government agencies have statutory small business program goals and executive agencies are required to award 3% of their eligible federal contracting dollars as prime and subcontracts to small business that are HUBZone-certified. The benefits to the community, employees and employers outweigh the difficulty of obtaining and maintaining the HUBZone certification.
The communities that are designated as HUBZone have limited economic development and opportunity for residents. This creates higher long-term unemployment or low median incomes in these areas. The SBA recognizes that small businesses can provide employment opportunities to residents in these communities to revitalize and stimulate the economy in areas designated as HUBZone.
Participation in the HUBZone program not only allows the small businesses to receive competitive advantages in winning federal contracts it gives small businesses a way to participate in the economic well-being of the surrounding communities and positively impact employees that reside in a HUBZone.
The criteria for a business to be certified as a HUBZone company is:
- The business must be considered a “small business” based on the size standards of the North American Industry Classification System (NAICS).
- The business must be 51% owned and controlled by United States citizens or citizen.
- The principal office of the firm must be located in a designated HUBZone area.
- At least 35% of the staff employed by the business must live in a designated HUBZone area.
AttainIt has been a qualified HUBZone small business concern for over 10 years. It is difficult to maintain a workforce of 35% employees living in a HUBZone. When you offer steady employment with good benefits, a lot of employees want to move out of a HUBZone once they are financially secure. This means constantly finding a way to increase our staff to secure employment for the employees that have moved out of the HUBZone and hire new employees that live in a HUBZone. However, it is very rewarding seeing the opportunity we can provide for financial stability with paid health benefits that may be difficult to offer without being certified in the HUBZone program.
Another challenge with maintaining the HUBZone certification is the redesignation of the HUBZones. The primary location of a business may be located in a HUBZone and 35% of the employees living in a HUBZone and then the areas are redesignated. This does not happen very often but if the location of the business is in an area that is designated HUBZone and it changes it will have to relocate to a HUBZone designated area. This also applies to the 35% employees living in a HUBZone. If the areas the employees reside in are redesignated, the business will have to figure out how to maintain the 35% status.
Although there are challenges to participating in the HUBZone program and maintaining the HUBZone certification it is well worth the effort. The FY 2016 Small Business Procurement Scorecard indicates that the federal government fell short of the 2016 HUBZone goal of 3%, reaching only 1.67%. We look forward to helping to educate the contracting officers on why it is important for them to award contracts to certified HUBZone businesses and how we can help them reach their goals which in turn helps our local communities and stimulates economic growth in economically disadvantaged areas.