HUBZone Certifications Averaging 116 Days–And Other Tidbits From The SBA OIG HUBZone Report

HUBZone certifications are averaging 116 days from the date of application to the date of certification, according to a fascinating SBA Office of Inspector General Report on the HUBZone certification process.  The 116-day time frame is considerably longer than the SBA’s goal of 90 days.  However, in a majority of cases, the SBA does complete the certification process within 90 days of receiving all of the applicant’s supporting documentation.

In addition to an overview of the time frames associated with a HUBZone certification (a question I am often asked), the SBA OIG report concludes that the SBA’s HUBZone application procedures need updating–and that three potentially ineligible firms were certified in 2012.

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SBA: SDVOSB, HUBZone, WOSB Mentor-Protege Programs May Arrive In 2014

The SBA will “make it a priority” to adopt regulations establishing mentor-protege programs for SDVOSBs, HUBZones, and WOSBs in the next 12 months, according to the SBA’s most recent semiannual regulatory agenda.

The regulatory agenda states that the three new mentor-protege programs are expected to be “similar” to the 8(a) mentor-protege program, which suggests that the special joint venturing benefits currently available only to 8(a)s may become available to SDVOSBs, HUBZones and WOSBs, as well.

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DOJ Files Complaint In HUBZone Fraud Cause

The Department of Justice has filed a complaint accusing an Ohio construction contractor and its owner of fraudulently obtaining HUBZone certification and HUBZone set-aside contracts.

According to a DOJ press release, the government is alleging that William Richardson, the owner of TAB Construction Co. Inc., made false statements regarding TAB’s principal office to obtain HUBZone certification, then used that certification to win millions of dollars in HUBZone set-aside contracts.

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HUBZone Certification Not Required At Solicitation Issuance, Says GAO

A Treasury Department solicitation did not require contractors to be certified HUBZone participants at the time the solicitation was issued, despite language in the solicitation arguably requiring just that in order to receive a high rating for socioeconomic status.

In a recent GAO bid protest decision, the GAO held that the agency properly interpreted the solicitation to require HUBZone certification at the time proposals were due, not the time the solicitation was issued.  The GAO’s ruling comports with the HUBZone program regulations, which do not require contractors to be certified at the time a solicitation is issued in order to be considered HUBZone participants for purposes of that solicitation.

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HUBZone Fraud: Contractors Agree To $6.25 Million Settlement

Two Kentucky-based government contractors and their owners have agreed to pay $6.25 million to settle HUBZone fraud claims, according to a U.S. Department of Justice press release.

The costly settlement puts an end to a saga involving DOJ claims of a vacant “principal” office, undisclosed affiliation, and fraudulent statements made to the SBA and and the U.S. Army.

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HUBZone Price Preference: GAO Confirms Application to GSA Leases

The HUBZone price preference applies to GSA leasehold acquisitions, according to a GAO decision confirming a prior bid protest ruling.

In General Services Administration–Reconsideration, B-406040.2 (Oct. 24, 2012), the GSA asked the GAO to reconsider its decision in The Argos Group, LLC, B-406040 (Jan. 24, 2012), in which the GAO initially held that the HUBZone price evaluation preference applies to GSA lease acquisitions.  The GAO–with the SBA’s support–confirmed its prior ruling, holding that the GSA cannot evade the HUBZone price preference when it issues a competitive procurement to acquire a lease.

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Idaho Man Pleads Guilty to HUBZone Fraud Charge

An Idaho man has pleaded guilty to a HUBZone fraud charge.  According to a U.S. Department of Justice press release, last week, Patrick Large, the owner of Quality Tile and Roofing Inc., pleaded guilty to one count of wire fraud resulting from a HUBZone scheme.

Large admitted defrauding the government by falsely representing the location of two employees, apparently in order to satisfy the SBA’s “principal office” requirement for HUBZone firms.  Based on Large’s representation, the SBA admitted Quality Tile to the HUBZone program.  Quality Tile subsequently won a HUBZone set-aside contract valued at approximately $220,000.

As part of the guilty plea, Large agreed to pay $150,000 in restitution.  However, he still faces the possibility of additional penalties, including prison time.  He is scheduled to be sentenced on January 8, 2013.