D.J. Caulfield Area Director/U.S. East HUBZone Program

1. State of the HUBZone Program**FOCUS on Contracting**HUBZone Overview for U.S. Department of Treasury staffJuly 17, 2008 D.J. Caulfield Area Director/U.S. East HUBZone Program

2. What We’ll Be Talking About • HUBZone program overview, access • (NOTE: Eligibility covered on Fact Sheet handout) • HUBZone contracting methodologies • FOCUS: HUBZone Set-asides • Statutes and regulations • Quick Search Tool • Questions and Replies

3. Program Overview The HUBZone Program = E³ Community Based: Employment Empowerment Enterprise

4. Access • From outset, designed as virtual program available at: www.sba.gov/hubzone Covers: • Application for Certification • Recertification • Program Examinations • Contracting Officer Assistance

5. HUBZone Contracting • Set-aside awards (HUBZone Rule of Two) • Sole source awards • Awards through full and open competition after application of 10% price evaluation preference (PEP). Applied if ‘other than small’ apparent successful offeror. • Subcontracting Opportunities

6. Federal Government-wide Prime HUBZone Contracting Awards by Fiscal Year • FY 1999 Goal - 1% Actual - not available • FY 2000 Goal – 1.5% Actual - $663.3M (.33%) • FY 2001 Goal – 2.0% Actual - $1.7 B (.72%) • FY 2002 Goal – 2.5% Actual - $1.7 B (.71%) • FY 2003 Goal – 3.0% Actual - $3.4 B (1.23%) • FY 2004 Goal – 3.0% Actual - $4.8 B (1.59%) • FY 2005 Goal – 3.0% Actual - $6.1 B (1.94%) Latest verified FPDS-NG data • FY 2006 Goal – 3.0% (about $10 billion) Actual -2.1% ($7.1 billion)

7. HUBZone Set-Aside Contracts --Evolutionary Language • Statutory – PL 105-135 • Regulatory – 13CFR 126 • Federal Acquisition Regulation – Subpart 19.13 ‘HUBZone Rule of Two’

8. SBA Reauthorization (PL 105-135)Title VI – HUBZone Act of 1997 • Public Law 105-135, encompassing HUBZone Act of 1997, contains this clause: • “Notwithstanding any other provision of law, a contract opportunity shall be awarded . . . on the basis of competition restricted to qualified HUBZone small business concerns if the contracting officer has a reasonable expectation that not less than 2 qualified HUBZone small business concerns will submit offers and that the award can be made at a fair market price.” Appears in 15 U.S.C. 658(b)(2)(B).

9. Regulatory – 13CFR 126 • § 126.607 When must a contracting officer set aside a requirement for qualified HUBZone SBCs? • (a) The contracting officer first must review a requirement to determine whether it is excluded from HUBZone contracting pursuant to §126.605. • (b) If the contracting officer determines that §126.605 does not apply, the contracting officer shall set aside the requirement for HUBZone, 8(a) or SDVO SBC contracting before setting aside the requirement as a small business set-aside. • (c) If the contracting officer decides to set aside the requirement for competition restricted to qualified HUBZone SBCs, the contracting officer must: • (1) Have a reasonable expectation after reviewing SBA's list of qualified HUBZone SBCs that at least two responsible qualified HUBZone SBCs will submit offers; and • (2) Determine that award can be made at fair market price.

10. FAR 19.1305(a) HUBZoneSet-Aside Procedures • First paragraph, first sentence: • A participating contracting officer shall set aside acquisitions exceeding the Simplified Acquisition Threshold for competition restricted to HUBZone small business concerns… • HUBZone set-asides shall be considered before HUBZone sole-source awards or small business set-asides

11. Four Common Myths That Severely Impact HUBZone Contract Opportunities • MYTH #1. It’s difficult to identify HUBZone firms when conducting market research to establish a basis for a HUBZone set-aside. • Reality: It's actually quite simple to identify HUBZone firms through the following sources: • HUBZone Home Page • https://eweb1.sba.gov/hubzone/internet/ • (aka – www.sba.gov/hubzone) • Use ‘Contracting Officer’s HUBZone Gateway’ • Central Contractor Registration/Dynamic Small Business Source System (CCR/DSBSS) • http://www.ccr.gov

12. Four Common Myths Severely Impacting HUBZone Contract Opportunities cont’d • MYTH #2. The HUBZone portfolio is composed of small, undercapitalized, low-tech service and construction firms. • Reality: 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

13. Four Common Myths Severely Impacting HUBZone Contract Opportunities cont’d • MYTH #3. The ‘HUBZone Rule of Two’ does not apply to procurement actions that were formerly set-aside for small business (aka -- historical small business set-asides) • Reality: There is no exemption to the ‘HUBZone Rule of Two’ for historical small business set-asides. The ‘HUBZone Rule of Two’ is based upon specific language found in The HUBZone Act of 1997, the FAR, SBA’s regulations, Federal Court rulings and GAO decisions. All historical small business set-asides are subject to the ‘HUBZone Rule of Two’ requirement. • MYTH #4. Movement of a historical small business set-aside to a HUBZone set-aside cannot be accomplished until a small business impact study is conducted. 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. • Reality: 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

14. Quick Market Search Tool Next time you are on CCR’s Dynamic Small Business Search function, try this:

15. Quick Market Search cont’d • So how does it work? • Basically, you fill in one or two data fields and press ‘Search.’

16. Quick Market Search cont’d • What do I get for NAICS 323110 (Commercial Lithographic Printing) in less than 3 seconds?

17. The HUBZone Program Now it’s time for the Questions and Replies