HUBZone is a United States Small Business Administration (SBA) program for small companies that operate and employ people in Historically Underutilized Business Zones (HUBZones). The HUBZone program was created in response to the HUBZone Empowerment Act created by the US Congress in 1998. Based on the Act, small businesses will be designated as HUBZone certified if they have the following criteria:
Contents
- The firm must be a small business based on the North American Industry Classification System (NAICS) for size standards.
- The business must be at least 51% owned and controlled by U.S. citizens, or a Community Development Corporation, an agricultural cooperative, or an Indian tribe (including Alaska Native Corporations).
- The firm's principal office (the location where the greatest number of employees perform their work, excluding contract sites) must be in a HUBZone.
- 35% of the firms total workforce must reside in a HUBZone.
Definition
HUBZone means a historically underutilized business zone, which is an area located within one or more:
- Qualified census tracts;
- Qualified non-metropolitan counties;
- Lands within the external boundaries of an Indian reservation;
- Qualified base closure area; or
- Redesignated area.
To determine if a location (residence or business) is in a HUBZone, the SBA web site has a feature the make this determination found at [1]
The primary goal of the program is to create incentives for the U.S. federal government to do contracting with businesses that operate and create jobs in communities with statistically proven economic needs.
Government contracting requirements
The agencies of the U.S. federal government are required by the HUBZone Empowerment Act to contract with HUBZone certified small businesses for more than 3% of their budget in the form of prime contracts to HUBZone firms. The government has made some progress towards these goals but by and large remains below them.
Many contractors are unaware of the opportunities that are available through these agencies that are engaged in the hiring of contractors for the upkeep of properties owned, occupied or affiliated with the agencies. These agencies act in a similar manner as a general contractor deploying work to many subcontractors. Further, the government is set to grant billions on community development projects. Nearly everyone calling for more government spending is also calling for better accountability of where this money goes. Ideas include posting specific projects online, their status, how much they cost, and how many people they employ. These goals are impossible to achieve while the agencies deploying work are vastly inefficient. Unfortunately, many recipients of government agency contracts operate their business with limited use of technology.
HUBZone creators
Numerous legislators created and continue to support the HUBZone program. However, it is widely held that U.S. Senator Kit Bond (R-MO) was the true creator of the program and continues to be the champion. His motivation came from numerous meetings with business owners at events that discussed training. In those events, the feedback was grateful for the training for businesses in lower economic areas, but the training was slated as inadequate unless work was also going to be allocated to those communities. Based on the need for jobs, Senator Bond began the concept of HUBZones.
Notable firsts
The first business to receive a contract under the HUBZone program's simplified acquisition program was Garrett Container based in Accident, Maryland.