FAA Updates Its Rules to Embrace HUBZone Program

Until now, the Federal Aviation Administration (FAA) did not participate in the SBA’s Historically Underutilized Business Zones (HUBZone) Contracting Program. But as of January 2021, it looks like that may be changing!

Historically, the FAA did not incorporate any HUBZone goals into its Acquisition Management System (AMS) Contract Clauses. In fact, the FAA website’s FAQ sheet still states, “[t]he FAA has not established a HUBZone goal and is exempt from the SBA Goal Setting Guidelines including the establishment of HUBZone goals.”

But as of January 2021, the FAA has added Clause #3.6.1-18, Notice of HUBZone Set-Aside, to its existing AMS contract clauses. As set forth in the updated AMS, Clause #3.6.1-18:

Must be used in SIRs and contracts set aside, either competitive or noncompetitive, for HUBZone small business. This includes multiple-award contracts when orders may be set aside for HUBZone small business concerns, issued either competitively or noncompetitively.

As for the contents of Clause #3.6.1-18, they are nearly identical to the corresponding Federal Acquisition Regulation (FAR) clause, FAR 52.219-3, Notice of HUBZone Set-Aside or Sole Source Award.

Just like the FAR provision, section (a) of Clause #3.6.1-18, cites to 13 C.F.R. § 126.103 for SBA’s standard HUBZone contracting definitions. And section (b) sets forth the clause’s applicability to:

(1) Contracts that have been set aside for HUBZone small business concerns, awarded either competitively or noncompetitively;

(2) Part or parts of a multiple-award contract that have been set aside for HUBZone small business concerns;

(3) Orders set-aside for HUBZone small business concerns, issued on a competitive basis, under multiple-award contracts; and

(4) Orders issued on a noncompetitive basis to HUBZone small business concerns under multiple-award contracts.

Section (d) sets forth the general requirements that offers will only be solicited from–and award will only be made to–qualified HUBZone small business concerns. Section (e) establishes the applicable limitations on subcontracting for HUBZone small business awardees. Section (f) establishes the HUBZone joint venture performance of work requirements–and unfortunately, contains the same language from the FAR that, as we explained in a prior blog, is simply wrong. But it’s in there nonetheless.

The final section requires that the “HUBZone awardee must be a HUBZone small business concern at the time of award,” and it requires a HUBZone small business offeror to give SBA notice of any change in eligibility prior to award.

Additionally, in this same January 2021 update of the AMS, the FAA has also updated its subcontracting plan, via Clause #3.6.1-4, Small, Small Disadvantaged, Women-Owned, Service-Disabled Veteran Owned, and HUBZone Small Business Subcontracting Plan, to now include HUBZone.

And this updated subcontracting plan at Clause #3.6.1-4:

Must be used in solicitations and contracts that offer subcontracting possibilities, are expected to exceed $750,000 ($1.5 million for construction of any public facility), and are required to include the clause 3.6.1-3 Utilization of Small, Small Disadvantaged, Women-Owned, Service-Disabled Veteran-Owned, and HUBZone Small Business Concerns, unless the acquisition is set aside.

Again, these clauses provide some pretty familiar HUBZone contracting requirements. But for all the HUBZone concerns out there looking to pursue FAA work, this could be some really big news–as FAA has not included HUBZone contracting language in the AMS in the past!

Though we are not sure yet what, when, or how exactly the FAA will establish its HUBZone contracting goals moving forward–based on these updated clauses–we are optimistic that HUBZone goals are coming! And if and when they do, it will dramatically increase the chance of FAA awards going to HUBZone small business concerns.

Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919.

Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedInTwitter and Facebook.