Did you know that running a business in certain designated areas of the country can give you preferential (or even exclusive) access to billions of dollars in federal contracts? While simply existing in these areas isn’t the only criteria, many people qualify for HUBZone certification without even realizing it. This could mean you’re missing out on lots of money being awarded by the federal government every day. But what is a HUBZone, how do you know if you meet the requirements, and what other benefits does this bring? Let’s discuss:
What is a HUBZone?
A HUBZone, or Historically Underutilized Business Zone, is a designated area of the United States where there hasn’t been as much support or use of small businesses in the past. To counteract this and give businesses in these areas a more level playing field, these areas are given certain benefits by the government. The SBA uses data from the Bureau of Labor Statistics, the Department of Housing and Urban Development, and more to determine what locations should be considered HUBZones as they update this map (linked below).
When was the HUBZone program started?
This program was started in 1998 by the HUBZone Empowerment Act, created by the US Congress. The first company to be certified as a HUBZone business happened in March 1999, with the first HUBZone contract being issued a month later in April 1999.
Who is eligible to be a HUBZone business?
So we’ve established that your business needs to be in a HUBZone to qualify for this certification, but what else? And what part of your business actually needs to be in this zone? The major criteria for a HUBZone certification are as follows:
- The company’s principal office must be located in a HUBZone
- At least 35% of employees must also live in a HUBZone
- The company must be a small business under its primary NAICS code
- The company must be at least 51% owned and controlled by a US citizen
If your business meets these requirements, you can start thinking about whether the long-term benefits make sense for you. However, there are also other long-term considerations to factor in.
HUBZone certification renewal
HUBZone eligibility is determined as an ongoing and recurring process, and you need to recertify annually. This means that if your area loses its HUBZone designation, you can also lose your HUBZone certification. This is why it’s important to stay up-to-date on what changes the SBA is making to the zoning in your area.
To renew your HUBZone certification, the first step is to find your certification anniversary date. This date is listed on your certification letter, as well as the company’s DSBS profile. Once you know this, check that your firm still meets all of the criteria we discussed. If it does, go to SAM.gov and ensure that the information (such as address, email, etc.) is correct. The final step is to complete the recertification form in the General Login System (GLS), which must be done by an authorized officer of the company.
The SBA has confirmed that the current HUBZone map is frozen until July 1, 2023, at which point the zones and designated areas will be updated again. To check your address or see the entire interactive HUBZone map, visit maps.certify.sba.gov/hubzone/map.
If your company is in a HUBZone and fulfills the requirements mentioned above, you can apply for certification and reap the benefits that it brings.
Benefits of HUBZone certification
As we mentioned at the beginning of this post, having a HUBZone certification entitles you to exclusive access to a pool of federal contract opportunities. However, there are other advantages that make this certification even more appealing to many businesses. Some of these benefits include:
- Each year, the government gives 3% of all funds/contracts to HUBZone entities, which amounts to nearly $10 billion annually
- There is a pool of contracting opportunities that are only available to HUBZone-certified businesses, improving the chances of winning them
- On all other open contract competitions, HUBZone businesses get a 10% price evaluation preference over other businesses
- Large companies bidding on federal contracts over $550,000 also have to provide allocation for the participation of a HUBZone firm
These perks of HUBZone certification can be incredibly advantageous for businesses, particularly from a monetary perspective. If you meet the requirements, your company should consider applying for this certification, so you can start receiving the benefits that come with it.
Start your headache-free certification today
If you’re ready to start earning contracts and money today, getting your HUBZone certification is a great way to start. The process can be complicated and frustrating sometimes, so FAMR is here to make it easy for you. Our years of experience working with federal contractors and the SBA means that you’ll have an expert team in your corner that makes sure you maximize your contracting opportunities and profit.