What is HUBZone Certification?
HUBZone stands for “Historically Underutilized Business Zone.” The HUBZone Certification is a federal designation for small businesses located in economically disadvantaged areas, aiming to boost local economic development and employment. The program encourages federal agencies to spend a certain portion of their contracting budget with HUBZone-certified businesses.
The Evolution of the HUBZone Certification
The concept behind the HUBZone Certification program has its origins in efforts to revitalize economically distressed communities. As urban decay, rural isolation, and economic downturns hit certain parts of the U.S., it became evident that targeted intervention was required to spur business growth and employment.
This awareness culminated in the creation of the HUBZone Empowerment Act, which was a part of the Small Business Reauthorization Act of 1997. Signed into law by President Bill Clinton, this Act aimed to address economic disparities across the country by tapping into the vast federal procurement system. By channeling federal contracting dollars into these underutilized areas, the goal was to stimulate economic activity, foster job creation, and improve the quality of life for residents.
Since its inception, the HUBZone Certification program has evolved in response to changing economic landscapes and feedback from participating businesses. It has been instrumental in fostering collaboration between federal agencies and local businesses, resulting in both community growth and the success of countless small enterprises. The program is a testament to the U.S. government’s commitment to ensuring that prosperity and opportunity are widespread, reaching even the most challenged corners of the nation.
Why Get Certified?
- Priority in Federal Contracts: HUBZone-certified businesses receive competitive and sole-source contracting opportunities, with a goal of awarding at least 3% of all federal contracting dollars to HUBZone-certified companies annually.
- Enhanced Business Growth: Companies with this certification often see an uptick in business opportunities and, consequently, a potential increase in revenue.
- Contribution to Local Development: By ensuring that businesses within the HUBZone retain local employees, this program indirectly contributes to the economic upliftment of the region.
- Eligibility for Special Bidding: Being HUBZone certified allows businesses to partake in contracts set aside exclusively for HUBZone companies, elevating their chances in the bidding process.
How to Get Certified
The process for HUBZone certification ensures the benefits are channeled to businesses truly operating and employing within these zones.
- The business must be a small business based on the SBA’s size standards.
- It must be at least 51% owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, or an Indian tribe.
- The business’s principal office (where the majority of its employees perform their work) must be located within a HUBZone.
- At least 35% of the business’s employees must live in a HUBZone.
- Gather Necessary Documents: This includes proof of business size, ownership, principal office location, and employee residency.
- Complete the Online Application: Using the SBA’s online certification platform, submit the application and accompanying documents.
- Await Review: The SBA will review the application and may request additional information.
- Maintain Compliance: Once certified, businesses must undergo annual reviews to ensure they continue to meet the HUBZone program’s criteria.