HUBZone Truths

By Greg Cullison

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What's that you heard about working with a HUBZone firm? It's time to lay the myths to rest. As a SBA-CERTIFIED HUBZONE FIRM, we help our partners save time and money – and win contracts. Let’s talk about these truths:

Myth: Owners must reside in a HUBZone where the consultants are employees. The employees working on a HUBZone set-aside contract must reside in a HUBZone.

Truth: The company's primary office must be in a HUBZone; upon award of a HUBZone set aside contract, the company must be in compliance at time of bid and award. 35% OF THE FIRM'S EMPLOYEES MUST RESIDE IN ANY HUBZONEAffiliated companies may be considered during an audit when working with a HUBZone contract.  

Myth: Sole-source contracts cannot be awarded to HUBZone firms

Truth: Sole‐Source HUBZone contracts can be awarded if a contracting officer determines that:

(a) just one qualified HUBZone firm is able to fulfill the contract;

(b) two or more qualified HUBZone firms are not likely to submit offers; and

(c) the anticipated award price of the proposed contract, including options, will not exceed $5 million for a requirement within the North American Industry Classification System (NAICS) code for manufacturing or $3 million for a requirement within all other NAICS codes.

See FAR 19.1306 for more details.

Additional types of HUBZone contracts:

  • A competitive HUBZone set-aside contract can be awarded if the contracting officer has a reasonable expectation that at least two responsible HUBZone small businesses will submit offers and that the resulting contract can be awarded at a fair market price.
  • A full and open competition contract can be awarded with a price evaluation preference. The offer of the HUBZone small business will be considered lower than the offer of a non-HUBZone/non-small business-providing that the offer of the HUBZone small business is not more than 10 percent higher.

Myth: A small business impact study must be conducted before moving a historical small business set-aside to a HUBZone. If it is determined that the proposed HUBZone set-aside will "impact" a small business (former contract awardee), then the requirement cannot be issued as a HUBZone set-aside.

Truth: Unlike the 8(a) Program, there is no requirement to conduct an impact study when a procurement is moved from a small business set-aside to a HUBZone set-aside. The HUBZone program provides an alternative contract option that can save your organization time and money and help to meet small business contracting requirements.

Myth: The HUBZone portfolio is composed of small, undercapitalized, low-tech service and construction firms.

Truth: According to the SBA, the HUBZone portfolio of over 13,000 firms includes capability in virtually every NAICS code procured by the Federal Government. HUBZone Portfolio includes:

  • 931 firms with annual revenue of $10 million+
  • 620 firms with over 100 employees
  • 141 clothing manufacturers
  • 498 machine shops
  • 1,177 computer service firms

To sum it up, here are a few benefits of partnering with a HUBZone firm:

  • Eligibility for HUBZone set aside and sole source contracts,
  • 10 percent price evaluation preference in full and open contract competitions, and
  • Help create jobs where they are needed most!

If you’re searching for a HUBZone-certified consulting firm in the Washington, D.C. area, please give us a call – we’d be more than happy to share our experience and answer any questions you may have.

Easy Contracting with HUBZone