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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5 Things You Should Know: HUBZone Program (The Basics)

5 Things has previously discussed 8(a) Program basics and eligibility requirements. But the 8(a) Program isn’t the only socioeconomic program benefiting small businesses. In this post, we’ll begin exploring another crucial program for small businesses: the Historically Underutilized Business Zone—or HUBZone—program.

Here are five things you should know about the HUBZone program.

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DOJ Files Complaint In HUBZone Fraud Cause

The Department of Justice has filed a complaint accusing an Ohio construction contractor and its owner of fraudulently obtaining HUBZone certification and HUBZone set-aside contracts.

According to a DOJ press release, the government is alleging that William Richardson, the owner of TAB Construction Co. Inc., made false statements regarding TAB’s principal office to obtain HUBZone certification, then used that certification to win millions of dollars in HUBZone set-aside contracts.

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HUBZone Fraud: Contractors Agree To $6.25 Million Settlement

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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Thank You, HUBZones!

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

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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