New HUBZone Rules Kick In December 26

SBA proposed a major revamp of how it will interpret and enforce the HUBZone program’s rules back in October of 2019. We wrote about the major changes in a couple of posts (here and here) as well as some of the common misconceptions that SBA cleared up as part of the proposed rule.

Well, the wait is over. SBA will release the final rule November 26 and the new rules will become effective on December 26, 2019.

Some of the big changes detailed in these earlier posts are:

  • Annual recertification of HUBZone status, rather than at time of bid and award.
  • A minimum threshold for attempting to maintain compliance with the requirement that at least 35 percent of a concern’s employees reside within a HUBZone. SBA will impose a presumption that, if the HUBZone’s employee residency drops below 20 percent, the HUBZone will have failed to use its best efforts to comply.
  • HUBZone small businesses will be able to keep counting employees that formerly resided in a HUBZone toward the required totals for the 35 percent residency requirement, even if those employees move out of a HUBZone.

The rules contain many other changes and clarifications. If you are a HUBZone certified company or looking to become one, be sure to read through our in-depth coverage of these changes on SmallGovCon.com or consult the rule. We’ll continue to review the final rule and provide an update on any major changes in the final rule from the original proposed rule.

Editor’s Note: My original post mistakenly stated the effective date as January 1, 2020, but the effective date of this rule is December 26, 2019. The effective date for SBA’s rules on the HUBZone Program Provisions for Governor-Designated Covered Areas, in contrast, is January 1.