SBA Provides Flexibility for HUBZone Compliance

We’ve written quite a few posts about how contractors can adapt and deal with the changes caused by the COVID-19 pandemic. Some small businesses federal contractors, however, face unique challenges. This is particularly true of participants in the HUBZone Program. Specifically, while the OMB has encouraged agencies to allow contractor employees to telework, how will this affect HUBZone entities, where the location of their employees is key to maintaining their HUBZone status?

Well, the SBA has the answer in some recent guidance, and it’s something we could all probably do with a little more of–flexibility. Flexibility, in this case, means that SBA realizes complying with the principal office and employee residency requirements may be tough during a time when all people are encouraged to telework. The flexibility applies to a few of the HUBZone rules.

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SBA Issues Guidance on New HUBZone Rules

Can a business seeking HUBZone status give employees bonuses or higher wages to entice them to live in a HUBZone?

According to new guidance published by the U.S. Small Business Administration, yes. But that’s not the only question addressed in the guidance.

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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.

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HUBZone Program: SBA’s Proposed Rule Clears Up Some Common Misconceptions

Last week, the SBA released a proposal to overhaul the HUBZone Program.  The proposed rule will make major changes to almost all aspects of the HUBZone Program, and my colleagues are covering those changes in a series of two posts on SmallGovCon.

But while the proposed HUBZone Program rule changes will garner most of the headlines, the SBA also has used the proposed rule as an opportunity to clear up a few very common HUBZone Program misconceptions–such as the notion that so-called “jobsite employees” don’t count toward the 35% HUBZone residency requirement.

Here are three of the most important clarifications SBA offered in the proposed HUBZone rule.

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2018 NDAA: Changes to 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.

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SBA Considering 8(a), HUBZone Changes

The SBA is considering making changes to improve its socioeconomic programs–particularly the 8(a) and HUBZone Programs.

In a talk yesterday at the 2017 Navy Gold Coast Procurement Conference, Robb Wong, the SBA’s recently-appointed Associate Administrator, Office of Government Contracting and Business Development, discussed some of the big changes the SBA is considering.  And to my ears, at least, a lot of what Mr. Wong said makes good sense.

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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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