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HubZone Empowerment Contracting Program
What is a HubZone?
A HubZone (Historically Underutilized Business Zone) is an area that is located in one or more of the following:
· A qualified census tract (as defined in section 42(d)(5)(C)(i)(1) of the Internal Revenue Code of 1986);
· A qualified non-metropolitan county that is: not located in a metropolitan statistical area (as defined in section 143(k)(2)(B) of the Internal Revenue Code of 1986); and in which the median household income is less that 80% of the non-metropolitan State median household or that based on the most recent data available from the Secretary of Labor, has an unemployment rate that is not less than 140% of the statewide average unemployment rate for the State in which the county is located;
· Lands within the external boundaries of an Indian reservation.
What is the HubZone Empowerment Contracting Program?
This program stimulates economic development and creates jobs in urban and rural communities by providing Federal-contracting preferences to small businesses located in distressed areas or HubZones. These preferences go to small businesses that obtain HubZone certification. Small business concerns (SBC’s) may apply for HubZone certification online at: www.sba.gov/HubZone. The certification process takes a maximum of 30 days.
How does a business qualify?
· It must be a small business by SBA size standards;
· Its principal office must be located within a HubZone, which includes lands on federally recognized Indian reservations;
· It must be operated and controlled only by a U.S. citizen, Community Development Corporation or an Indian tribe; and
· At least 35% of its employees must reside in a HubZone.
What’s the easiest way to find the location of a HubZone in my area?
Log onto the web at www.sba.gov/HubZone and select the option “Find out if you are in a HubZone.” You can search the system using several designations, including a specific address, a county or a full state.
Cumberland County has eight qualified census tracts designated as HubZones. These census tracts are 1, 2, 4, 10, 12, 13, 24, and 35.
What are the benefits of this program?
There are two levels of benefit. The first relates directly to Federal contracts, while the second involves specialized assistance.
Federal Contract Benefits
There are four types of HubZone contract opportunities:
Competitive: Contracts can be set-aside for HubZone competition when the contracting officer has a reasonable expectation that at least two qualified HubZone small business concerns will submit offers and that the contract will be awarded at a fair market price.
Sole-source: HubZone contracts can be awarded if the contracting officer determines that:
- Only one qualified HubZone SBC is responsible to perform the contract,
- Two or more qualified HubZone SBC’s are not likely to submit offers and
- The anticipated award price of the proposed contract, including options, will not exceed $5 million for a requirement within the North American Industry Classification System (NAICS) code for manufacturing or $3 million for a requirement within all other NAICS codes
Full and open competitive contracts can be awarded with a price evaluation preference. The offer of the HubZone small business must not be 10% higher than the offer of a non-small business.
Subcontracting: For most large contracts (over $500,000 or $1 million construction), large business contractors must create a subcontracting plan reflecting HubZone business participation.
Other Specialized Assistance -
- Eligible HubZone businesses can qualify for higher SBA-guaranteed surety bonds on construction and service contract bids.
- Businesses in Federal Empowerment Zones and Enterprise Communities (EZ/EC) can also benefit from employer tax credits, tax-free facility bonds, and investment tax deductions.
For additional information, contact:
Michael P. McHale
HubZone Associate Administrator
Or
Betty Toulson
HubZone Deputy Associate Administrator
(202) 205-8885
www.sba.gov/HubZone (Website)
HubZone@sba.gov (Email)
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