The following information provides a brief overview of the HUBZone Empowerment Contracting Program commonly referred to as the HUBZone (Historically Underutilized Business Zone) Program. The HUBZone website at www.sba.gov/hubzone can provide more details about this program and includes specific sections dedicated to contracting professionals.

Program History
The HUBZone Empowerment Contracting Program was enacted into law as part of the Small Business Reauthorization Act of 1997 and falls under the auspices of the US Small Business Administration. The purpose of this “place-based” federal contracting program is to stimulate economic development and job creation in designated urban and rural communities by providing Federal contacting preferences to small businesses. These preferences go to small businesses that obtain HUBZone certification in part by employing personnel who live in a Historically Underutilized Business Zone.

The program provides for contract set-asides, sole source awards, and price evaluation preferences for certified HUBZone small businesses. The program also enhances subcontracting opportunities and establishes government-wide goals for contract awards to HUBZone-based firms.

The HUBZone program is in line with the efforts of both the Administration and Congress to promote economic development and employment growth in distressed areas by providing access to more Federal contracting opportunities. As of October 1, 2000, all Federal agencies are subject to the requirements of the HUBZone Program.

How The HUBZone Program Works
The US Small Business Administration (SBA) regulates and implements the program and determines which businesses are eligible to receive HUBZone contracts, maintains a listing of qualified HUBZone small businesses that Federal agencies can use to locate vendors, adjudicates protests of eligibility to receive HUBZone contracts, and reports to the Congress on the program's impact on employment and investment in HUBZone areas.

Eligibility
In order to qualify for the HUBZone Program, a small business concern must be certified by the SBA as meeting the following criteria:
• It must be a small business by SBA size standards
• It must be owned and controlled by one or more U.S. citizens.
• Its principal office must be located in a HUBZone.
• At least 35 percent of its employees must reside in any area designated as a HUBZone.

HUBZone Contracts
There are three types of HUBZone contracts:
• Competitive Contracts can be set-aside for HUBZone competition when the contracting officer has a reasonable expectation that at least two qualified HUBZone small business concerns 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 does not have a reasonable expectation that two or more HUBZone small businesses will submit offers, determines that the HUBZone business is responsible and determines that the contract can be awarded at a fair market value.
• Competitive contracts can be awarded with a 10 percent price evaluation preference. The offer of the HUBZone small business must not be more than 10 percent higher than the offer of the non-HUBZone/non-small business.

Additional HUBZone Features
• All subcontracting plans for federal prime contractors must include a negotiated HUBZone sub-contracting goal.
• Certified HUBZone small businesses qualify for higher government guaranties (90%) on surety bonds for service contract bids.
• Since 2003, the annual Federal government contracting goal for the HUBZone program is three percent of the total value of all federal prime contracts. (2005 est. - $6 Billion)

The HUBZone website at www.sba.gov/hubzone can provide more details about this program and includes specific sections dedicated to contracting professionals.