Category Archives: HUBZone Program

Posts dealing with the HUBZone program, including HUBZone eligibility and certification, the “35%” and “primary office” rules, the HUBZone price preference, and related matters.

HUBZone Certification Not Required At Solicitation Issuance, Says GAO

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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

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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

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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

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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.

Thank You, HUBZones!

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Last week, I had the honor of returning to Washington, DC and giving a presentation at the National HUBZone Conference on best practices for remaining HUBZone compliant.  The presentation addressed critical ongoing HUBZone compliance issues, including the principal office rule, 35% employee residency rule, and other HUBZone eligibility rules.

Many thanks to Mark Crowley and the HUBZone Council for inviting me to be part of the conference.  And a big “thank you” to my engaged audience of HUBZone companies, which asked many great questions and probably could have kept going all morning if there had been time.  Finally, thanks to my sister Karen, for allowing me to use her apartment in Van Ness as my personal HUBZone Conference hotel and introducing me to Comet Ping Pong while I was in town.

If your company is HUBZone certified, but you weren’t able to make it to this year’s National HUBZone Conference, never fear.  My presentation slides are now up on the Past Presentations page.  Enjoy!

Explaining HUBZone Eligibility And The 35% Residency Requirement

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In order to qualify as a HUBZone business, 35% of a company’s employees must reside in a HUBZone (though not necessarily the same HUBZone where the business has its principal office).  But what happens if a business slips below the 35% requirement?  After all, employees come and go all the time.

Here’s how it works.

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Agency Awards HUBZone Set-Aside to Federal Prison Industries

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When is a HUBZone set-aside not really a HUBZone set-aside?  According to one GAO bid protest decision, when Federal Prison Industries (also known as UNICOR) submits an offer.

In Tennier Industries, Inc., B-403946.2 (June 29, 2012), the Defense Logistics Agency set-aside a procurement for HUBZone contractors, but awarded the contract to Federal Prison Industries rather than a HUBZone company.  One might think that the GAO would sustain a bid protest.  Instead, the GAO held that the award to FPI was A-OK.

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