Simply put, the Federal government wants to do business with small businesses. The government encourages this through small business contracting programs, which are largely administered by the U.S. Small Business Administration (SBA), and by establishing government-wide agency-specific small business goals.
The Historically Underutilized Business Zones or HUBZone Program is one of the four programs that was created to encourage economic development in HUBZone areas. The SBA designates HUBZone areas using information from various Federal agencies, such as the U.S. Census Bureau, Department of Housing and Urban Development, U.S. Bureau of Labor Statistics, and Department of Defense. HUBZone designated areas typically have low median household incomes and/or high unemployment. The SBA has a map tool on its website at, http://map.sba.gov/hubzone/maps, which can be used to identify if a specific address is in fact in a HUBZone.
In the State of Hawaii, all neighbor islands are HUBZone areas. On Oahu, there are only pockets of HUBZones. Because of the minimal HUBZone designated areas in the state of Hawaii, there aren’t too many companies that participate in the program. As of August 21, 2015, and as reported on SBA’s Dynamic Small Business Search, there were only 54 currently HUBZone small business concerns in Hawaii.
The Federal government’s goal is to award 3 percent of both prime and subcontracts to HUBZone firms. While this number may seem insignificant, considering the Federal government spends an average of $440 billion in contracts each year, 3 percent is a very substantial amount. Unfortunately, the Federal government has consistently failed to achieve its HUBZone goal.
The fact that there are few HUBZone certified firms in Hawaii coupled with the government’s desire to attain its HUBZone small business goals means there is a great opportunity for companies that qualify for the program. We encourage companies, especially those trying to get into the Federal contracting industry, to seriously look into the program and determine if it’s a program that they qualify for and can benefit from. HUBZone program benefits include set-aside and sole-source opportunities, a 10% price evaluation preference in full and open contract competitions, and subcontracting opportunities.
So, how do businesses qualify for the HUBZone program? There are basically four criteria, including, a business must:
- Be small according to SBA’s size standards;
- Have a principal office in a HUBZone;
- Have 35% of employees living in a HUBZone; and,
- Be majority owned and controlled by a U.S. citizen, Community Development Corporation (CDC), agricultural cooperative, or Indian tribe/ANCs.
In summary, there is a great opportunity for businesses that qualify for the HUBZone program. To learn more about the HUBZone program and how we might be able to assist you, contact us at (808) 369-9710.