HUBZone Program: SBA Will Delete “Direct” Ownership Requirement

HUBZone companies owned by U.S. citizens will no longer be required to demonstrate that the ownership is “direct.”

The SBA’s HUBZone program rules have long required that a HUBZone company owned by U.S. citizens be at least 51% directly owned by those citizens–as opposed to allowing the qualifying citizens to own those interests through legal vehicles like holding companies.  But the SBA has had second thoughts, and effective May 25, 2018, the direct ownership requirement will be eliminated.

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SmallGovCon Week In Review: March 6-10, 2017

I am headed back to Kansas after a great trip out west to speak at the 2017 Alliance Northwest Procurement Conference in Puyallup, WA. It was great seeing many familiar faces and meeting many other new ones. But I won’t be home long: I will be off to fabulous Las Vegas for the National RES Conference, where I’ll be presenting on Monday. If you will be at RES, please be sure to connect.

Even with all of this travel, I’ve been keeping a close eye on government contracting news–and that means that it’s time for the SmallGovCon Week In Review. In this week’s edition, scammers are using the HHS OIG telephone number in a spoofing ploy, the GAO releases a report on developments in the HUBZone program, a Coast Guard employee makes a funny FedBizOpps post (no, really!) and more.

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HUBZone Program: Employees Must Reside In HUBZones On Award Date

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.

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HUBZone Program: SBA Final Rule Allows NHO Ownership

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.

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HUBZone Program: Court Decision Highlights “Fracture” Policy

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.

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Joint Ventures: SBA Proposes Major Changes

The SBA has proposed major changes to rules governing joint venturing for set-aside contracts.

As part of a proposed rule released last week, the SBA proposes to eliminate so-called “populated” joint ventures, and proposes additional changes regarding joint venture certifications, performance of work reports, and more.

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Limitations on Subcontracting: SBA Proposes Sweeping Changes

The limitations on subcontracting would undergo sweeping changes under a recent SBA proposal.

On December 29, the SBA issued a proposed rule to enact the changes implemented by Congress in the National Defense Authorization Act of 2013–including a thorough re-write of the way that compliance with the subcontracting limits is calculated and enforced.

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