5 Things has previously discussed 8(a) Program basics and eligibility requirements. But the 8(a) Program isn’t the only socioeconomic program benefiting small businesses. In this post, we’ll begin exploring another crucial program for small businesses: the Historically Underutilized Business Zone—or HUBZone—program.
Here are five things you should know about the HUBZone program.
The HUBZone program has received its fair share of coverage on our blog, from recommended changes in the 35% employee-location requirement to SBA regulatory updates to the program. Well, the HUBZone program is once again undergoing some changes thanks to the 2018 National Defense Authorization Act–but note that some of these changes are not effective until January 1, 2020.
These changes include a requirement for an improved online mapping tool, a mandate that HUBZone verifications be processed in 60 days, and more. Here’s a look at some of the most significant HUBZone changes in the 2018 NDAA.
The HUBZone contracting program, while well-intended to provide economic and employment opportunities in otherwise low income, high unemployment areas, must nonetheless connect HUBZone firms with government contracts, the overwhelming majority of which are not located within a HUBZone.
If HUBZone firms are to experience growth, they will need to utilize the local labor force in the area where the contract is to be performed, in addition to utilizing the labor force residing in their HUBZone to perform indirect labor functions. As a company’s direct labor force grows, their indirect labor will also grow, producing more employment opportunities within the HUBZone, thereby fulfilling an intent of the program.
In order for an employee to count as a HUBZone resident for purposes of a specific HUBZone contract, the employee must reside in an officially designated HUBZone on the contract award date.
A recent decision of the U.S. Court of Federal Claims is a cautionary tale for HUBZone companies, which are responsible for ensuring that the 35% employee residency requirement is met on the award date.
Native Hawaiian Organizations soon will be able to own HUBZone companies under a new SBA direct final rule published yesterday in the Federal Register.
The new rule implements provisions of the 2016 National Defense Authorization Act, in which Congress instructed the SBA to open the HUBZone program to NHOs.
The SBA will not aggregate a HUBZone applicant’s employees with the employees of the applicant’s affiliates for purposes of determining compliance with the “35% rule,” but only if the SBA determines that there is a “clear line of fracture” between the HUBZone applicant and its affiliates.
A recent decision by the U.S. Court of Federal Claims highlights an important SBA policy, which isn’t codified in the SBA’s regulations but can have a tremendous impact on HUBZone Program eligibility.
A small business and its owner have agreed to pay $250,000 to resolve HUBZone fraud allegations, including a claim that the company’s HUBZone office was a “virtual” location where no employees actually worked.
According to a Department of Justice press release, Air Ideal, Inc. and its majority owner have also agreed to pay the government five percent of the company’s gross revenues over the next five years.