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Office of Government Contracting & Business Development

“The HUBZone Primer” Eligibility & Certification Requirements. May 3, 2012. Office of Government Contracting & Business Development. -- HUBZone Program --. -- HUBZone Program --. Program is designed to help small firms in certain communities gain access to federal contract opportunities

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Office of Government Contracting & Business Development

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  1. “The HUBZone Primer” Eligibility & Certification Requirements May 3, 2012 Office of Government Contracting & Business Development -- HUBZone Program --

  2. -- HUBZone Program --

  3. Program is designed to help small firms in certain communities gain access to federal contract opportunities • HUBZone areas: typically areas of low median household incomes or high unemployment, or both • At any given time, there are about 6,000 small firms certified in the HUBZone program -- HUBZone Program --

  4. Provides federal contracting assistance to qualified small firms in designated HUBZones to: • Increase employment opportunities • Stimulate capital investment • Empower communities through economic leveraging -- HUBZone Program --

  5. SBA regulates and implements the HUBZone program • Determines which businesses are eligible • Maintains a listing of qualified HUBZone firms to fulfill procurement opportunities • Adjudicates protests of eligibility regarding HUBZone contracts -- HUBZone Program --

  6. Contract set-asides • 3% government-wide prime and subcontracting goals • 10% price evaluation preference in full and open contract competitions -- HUBZone Program --

  7. A sole source HUBZone contract can be awarded if the contracting officer does not have a reasonable expectation that two or more qualified HUBZone small businesses will submit offers, determines that the qualified HUBZone small business is responsible, and determines that the contract can be awarded at a fair price. The government estimate cannot exceed $6.5 million for manufacturing requirements or $4 million for all other requirements. • A competitive HUBZone contract can be awarded if the contracting officer does have a reasonable expectation that at least two qualified HUBZone small businesses will submit offers and that the 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% higher. -- HUBZone Program --

  8. 6,700 small firms certified in the HUBZone program • In fiscal year 2010, $12B in prime contracts to Hubzone firms, including $3B in HUBZone set-asides. In Nebraska: • 29 active Hubzone certified firms (ccr.gov) • Fiscal year 2011: $25.7M in HUBZone contracts (fpds.gov) • 2.3% of total obligated dollars in Nebraska for fiscal year 2011 ($1.1B) -- HUBZone Program --

  9. Small business (by SBA standards/primary NAICS code) • Owned and controlled by at least 51% U.S. citizens or a community development corporation, an agricultural cooperative, or an Indian tribe • Principal office must be located within a designated HUBZone • At least 35% of its employees must reside in a HUBZone Note: Different rules apply for Tribal Governments, Alaska Native Corporations, Community Development Corporations and small agricultural cooperatives. These are delineated in Title 13 of the Code of Federal Regulations, Part 126 -- HUBZone Program --

  10. Business must be directly and unconditionally owned and controlled by at least 51% U.S. citizens - - - 13 CFR 126.200(b) (1)(i) • Citizen means a person born or naturalized in the United States. SBA does not consider holders of permanent visas and resident aliens to be citizens - - - 13 CFR 126.103 • Person means a natural person - - - 13 CFR 126.103 -- HUBZone Program --

  11. Principal office must be located within a designated HUBZone • Principal office means the location where the greatest number of the concern's employees at any one location perform their work . • For concerns whose “primary industry” is service or construction, the determination of principal office excludes the concern's employees who perform the majority of their work at job-site locations to fulfill specific contract obligations . -- HUBZone Program --

  12. At least 35% of its employees must reside in a HUBZone • Employees don’t have to live in the same hubzone as the principal office, just A hubzone. • When determining % of employees that reside in a Hubzone, if the % results in a fraction, round up to the nearest whole number. • Check the hubzone mapping tool with employee addresses to verify. -- HUBZone Program --

  13. Janitorial firm with • 100 employees • 95 work in job sites • HQ office is in a HZ • A 2nd office is in a non-HZ • HQ office has 3 employees • The 2nd office has 4 employees Firm does not meet the principal office requirement because the greatest number of the concern's employees work at the non-HZ location Question: Do the employees that work in the HZ office have to reside in a HZ? Answer: No When dealing with the evaluation of the principal office - do not consider where employees live When dealing with the evaluation of the 35% employee residency requirement - do not consider where employees work

  14. Re-designated areas are former HUBZone areas that have had an improvement in their economic conditions -- as reflected in -- updated 2010 census data. • In addition, such areas were granted an extended eligibility by Congress in 2004. This extended period ended on October 1, 2011, the date the Census Bureau publicly released the first results from the 2010 decennial census. • 3,400 firms impacted nationwide for decertification • This includes firms where principal office is not located in a HZ anymore or 35% of its employees are no longer reside in a hubzone. -- HUBZone Program --

  15. Metropolitan Area Census Tracts : 10,169 areas • “Qualified Census Tract” that meets test for Low Income Housing Tax Credit. (HUD) (Changes with decennial census.) • Non-metropolitan Counties: 1,349 counties • Median household income is less than 80% of the non-metropolitan state level (Census) (Changes with decennial census.) • Unemployment rate that is at least 140% of the lower of the state-wide or U.S. average (BLS) (Changes annually.) -- HUBZone Program --

  16. Federally recognized Indian Reservations: 659 • Locations include land meeting the definition of Indian Country (BIA and IRS) (Change is periodic) • Difficult Development Areas: 67 locations • “Difficult Development Area” external to continental U.S. that meets test for Low Income Housing Tax Credit. (HUD) (Changes with decennial census) • Former military base closed by BRAC: 48 • Former military bases closed as a result of Base Realignment and Closure Act (BRAC). Locations remain HUBZone for five years after date of closing or, if already closed by Dec. 8, 2004, five years from that date. (Defense) (Changes periodically) -- HUBZone Program --

  17. http://map.sba.gov/hubzone/maps/ -- HUBZone Program --

  18. www.ccr.gov -- HUBZone Program --

  19. Most successful HUBZone firms plan for their success • Long-term and revolving strategies that define how to be and remain competitive • Maintain principal office and 35% employee residency requirements • Planning is everything -- HUBZone Program --

  20. HUBZone CertificationApplication Process

  21. STEP 1. Verify eligibility compliance • STEP 2. Gather what you need (supporting documentation) • STEP 3. Review sample HUBZone application form • STEP 4. Review and ask questions • STEP 5. Access SBA’s General Login System (GLS) • STEP 6. Complete and submit the online HUBZone application • STEP 7. Submit requested supporting documentation -- HUBZone Program --

  22. Firm is a small business by http://www.sba.gov/content/determining-size-standards • Business is directly owned and controlled by at least 51% U.S. citizens or a community development corporation, an agricultural cooperative, or an Indian tribe • Firm’s principal office and at least 35% of its employees reside in a designated HUBZone • Note: Different rules apply for Tribal Governments, Alaska Native Corporations, Community Development Corporations and small agricultural cooperatives Learn more… Eligibility Requirements 13-CFR 126 -- HUBZone Program --

  23. CHECKLIST - http://www.sba.gov/sites/default/files/hubzone_request_for_doc.pdf -- HUBZone Program --

  24. Review a sample HUBZone application form (http://www.sba.gov/sites/default/files/files/sample_HUB_Application.pdf) • Critical Step – do not attempt to complete the actual online HUBZone application until you have reviewed the sample form and gathered all documents you need to complete it -- HUBZone Program --

  25. You don’t know what you don’t know… • Review HUBZone eligibility requirements, sample application form and the documentation you gathered and ask questions HUBZone Help Desk: (202) 205-8885 HUBZone@sba.gov -- HUBZone Program --

  26. https://eweb.sba.gov/gls/dsp_addcustomer.cfm?imappsystypnm=8ASDBhttps://eweb.sba.gov/gls/dsp_addcustomer.cfm?imappsystypnm=8ASDB -- HUBZone Program --

  27. Complete and submit the online HUBZone application http://www.sba.gov/content/applying-hubzone-program -- HUBZone Program --

  28. After application is submitted and reviewed, supporting documents will be requested by the SBA • Documents must be provided to the SBA within two weeks • Requested documents will include: • Documentation supporting ownership & control and size standards • Business and personal tax returns • Documents showing compliance with HUBZone employment and principal office requirements Checklist of documents needed: http://www.sba.gov/sites/default/files/hubzone_request_for_doc.pdf -- HUBZone Program --

  29. Application “times-out” • Unable to access the GLS system • 35% of employees are not located within HUBZone areas • Requested supporting documents do not validate information in the HUBZone application -- HUBZone Program --

  30. Annual assertion of eligibility • Requiring firms to attest in writing under penalty of perjury they remain eligible • Target: All certified firms (except those certified <1 year) • Full document reviews • Collection and review of documentation to verify current eligibility • Target: All certified firms • Contract audits • Collection and review of documentation to verify eligibility at time of contract bid and/or award • Target: Select certified firms with HUBZone contracts • Site visits • Unannounced visits by Field Operations staff to verify Principal Office criterion • Target: New applicants and select certified firms -- HUBZone Program --

  31. Resources and Tools

  32. http://www.sba.gov/content/contracting Success in government contracting is certainly elusive to some firms and clearly realized by others. There are a lot of reasons for this. However, some approaches continuously standout. Consider these: • Prepare and maintain an updated and clear contracting strategy that makes sense for your firm • Use your CCR profile as your business resume and update it frequently • Research agency needs, buying patterns and projections – then aggressively market your company accordingly • Update, refine and consistently improve your qualifications statement – this is important • Critique past proposals you submitted and seek guidance for improvements • Become an expert in using ALL aspects of fedbizopps – you would be surprised at how few firms understand and use this tool to its full capacity • Explore aliening your business with GSA and participating in other contracting vehicles, such as multiple award contracts • And, most importantly benefit from the wisdom of others – network and cultivate relationships with mentors and contract experts

  33. -- HUBZone Program --

  34. Thank you for taking the time to learn about the HUBZone program • Please contact us with any questions you may have: HUBZone Help Desk (202) 205-8885 HUBZone@sba.gov SBA Nebraska District Office www.sba.gov/ne 402-221-4690 -- HUBZone Program --

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