In late 2011, the HUBZone eligibility of thousands of firms was wiped away as a result of the 2010 decennial census, conducted by the U.S. Census Bureau every 10 years, which re-designated many areas previously considered HUBZone due to changes in economic data. The impacts of the census were significant, decreasing the number of designated HUBZone organizations from over 9,200 to approximately 5,200 - over a 40% drop. HUBZone areas typically exhibit high unemployment and lower average income, which is why the U.S. Federal government has created the program. The idea is to incentivize contracting with businesses that operate and to create jobs in communities with statistically proven economic needs. To qualify for the program, 35% of an organization’s workforce must reside within the designated HUBZone area.
In fiscal year 2011, the Federal government spent $9.9 billion on HUBZone businesses (roughly 2.35% of its overall contract dollars). While the number is impressive, only a third of agencies that receive an SBA procurement scorecard actually met their 3% percent HUBZone contracting goal. For agencies that are struggling to meet their goals, an exodus of decertified firms from the program can have far reaching implications. To help these agencies, the SBA has begun to conduct outreach to HUBZone areas in order to identify organizations that could potentially qualify. Indeed, this “spring and early summer, the SBA initiated a HUBZone recruitment plan at its 68 district offices nationwide and will repeat that recruitment plan next year.” The recruitment plan is designed to educated small businesses about the benefits of the program and to help them through the certification process. Additionally, a pilot program has been established during evening office hours twice a month so that HUBZone organizations can call for general assistance.
To learn more about the HUBZone Certification, please visit: http://www.sba.gov/hubzone/