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Frequently Asked Questions
- General Questions
- Who is Considered an Employee?
- The 35% Requirement
- The Principal Office Requirement
- Ownership and Control
- Designations and the HUBZone Maps
- Getting Declined
- Maintaining Certification; Decertification
- HUBZone Joint Ventures
- Additional Help
Which regulations describe the HUBZone program?
You can read the HUBZone regulations here.
Where can I find a list of HUBZone certified firms?
The official "list" of certified firms is contained within the Dynamic Small Business Search. You can run a search to produce a list of certified firms by clicking this link, The database search results are limited to 5,000 firms but there are typically more than this number of certified HUBZone firms so you will have to limit your search by geography, industry, or other conditions in order to produce the required list.
Each firm's DSBS profile has two fields relevant to HUBZone certification. "HUBZone Certified?" will indicate by a YES or NO whether the firm in question is currently certified. A marked YES for this question on a company's profile is official evidence that the firm is certified. An approval or recertification letter is NOT valid evidence that a firm is currently certified, since a firm may have been decertified since the notice was issued. The other relevant field is the “HUBZone Certification date.” The date given indicates only the initial date of certification and does not reflect the dates of any recertification process, which is internal to SBA.
We also note that small businesses submitting an offer on a HUBZone sole source or set-aside contract, or where the HUBZone price evaluation preference will be applied, acknowledge that a prospective HUBZone awardee must be a HUBZone small business concern at the time of award. Further, these offerors must notify a contracting officer of any material change notice sent to SBA that occurs before contract award, which could affect its eligibility. See 52.219-3 – Notice of HUBZone Set-Aside or Sole Source Award and 52.219-4 – Notice of Price Evaluation for HUBZone Small Business Concerns (Jan 2011).
I created a profile in SAM and the Dynamic Small Business Search. Why can’t my customers find my firm’s profiles?
You may have opted out of public display of your record within SAM. To fix this, you need to update your SAM record. Under the Core Data section, you can change this setting under the Information Opt-Out tab.
For more information visit the SAM user guide.
Is there a HUBZone logo that HZ SBCs can use/incorporate into their website and other marketing material?
SBA does not have a HUBZone logo in circulation. Additionally, the SBA does not lend its logo for private use, as that might be perceived as an endorsement.
My firm is in a HUBZone area but it has not applied for HUBZone certification from SBA. Can I display in our website that the firm is in a HUBZone?
It is only appropriate for firms currently certified as a HUBZone small business concern by the SBA to present themselves as “HUBZone” concerns. Please be advised that any small business concern that is determined by the Administrator to have misrepresented the status of that concern as a "HUBZone small business concern" shall be subject to the penalties defined in the Small Business Act. See 15 U.S.C.A. § 657a(c)(4). Furthermore, SBA’s regulations set forth the potential penalties for misrepresenting one’s status as that of a HUBZone concern. 13 C.F.R. § 126.900.
What supporting documents will I need to submit?
You will be required to submit different supporting documentation based on your ownership structure:
- Corporations must submit documents described in the Corporation Document Request.
- Sole Proprietors must submit documents described in the Sole Proprietor Document Request.
- Partnerships must submit documents described in the Partnership Document Request.
- LLCs must submit documents described in the LLC Document Request.
You must submit a signed program certification sheet based on the type of ownership:
- Program Certification for Applicants Owned by U.S. Citizens, ANCs or CDCs
- Program Certification for Applicants Owned by Indian Tribal Governments
We encourage all applicants to use these lists to begin assembling supporting documentation prior to the formal request from the HUBZone Program. However, please DO NOT SEND ANY DOCUMENTS TO THE HUBZONE PROGRAM PRIOR TO THAT FORMAL REQUEST OR THEY WILL BE DESTROYED.
How long does it take to be certified?
Complete applications are finalized in about 90 days. It may take more or less time depending on the specifics of your application. See the application timeline for a more specific breakdown.
Can I get an update on the status of my application?
Follow these steps to check the status within the General Login System:
Enter your User ID and password
Click on the HUBZone icon
Click on HUBZone Electronic Application
The status will be displayed under the application number.
The HUBZone program office does not issue certificates. When you submit bids for HUBZone contracts, contracting officers are required to confirm your HUBZone certification by searching for your firm in the publicly available Dynamic Small Business Search (DSBS). Your firm's profile will reflect whether you are HUBZone certified and if so, the date that you were certified. This part of your profile is automatically populated by the HUBZone program.
Is there a paper application or a sample application?
No, but there is this application guide which can help you prepare to submit the online application.
The online application says that my principal office is NOT in a HUBZone, but I know that it is. What can I do?
You may describe the discrepancy in the "dispute box" below Section A of the application. You may then proceed with filling out the application. To verify that the address is in a HUBZone, you may be required to submit a signed statement from a county or local government agency certifying the census tract number and county of the address in question. The statement must be on official letterhead from the county or local government agency. You may also be requested to send documentation such as copies of maps used by the county representative to determine the census tract and county. If you are experiencing an error with the HUBZone maps, please refer to the FAQ "The HUBZone Maps incorrectly plotted my address. Can you fix the map?" below.
Can my business qualify for HUBZone certification if we just moved into a HUBZone?
An existing business that chooses to move to a qualified HUBZone area is eligible so long as:
- It is small by SBA standards;
- It is owned and controlled at least 51% by U.S. citizens, a Community Development Corporation (CDC), an agricultural cooperative or an Indian tribe;
- At least 35% of its employees reside in a HUBZone. Employees must live in a primary residence within that area for at least 180 days or be a currently registered voter in that area
Can the HUBZone office expedite my application?
To ensure fairness to all applicants, the HUBZone applications are processed on a first come/first serve basis.
How does SBA define the term "employee"?
Employee means all individuals employed on a full-time, part-time, or other basis, so long as that individual works a minimum of 40 hours per month. This includes employees obtained from a temporary employee agency, leasing concern, or through a union agreement or co-employed pursuant to a professional employer organization agreement.
SBA will consider the totality of the circumstances , including criteria used by the IRS for Federal income tax purposes and those set forth in SBA's Size Policy Statement No. 1, in determining whether individuals are employees of a concern.
Volunteers (i.e., individuals who receive deferred compensation or no compensation, including no in-kind compensation, for work performed) are not considered employees.
The definition of employee does not mention if independent contractors are considered employees.
How do I determine if I should include or exclude an independent contractor (i.e., a 1099 employee) from the employee pool?
It depends. SBA considers the totality of the circumstances in determining whether individuals should be excluded as employees or not. This includes, but is not limited to, the criteria in SBA's Size Policy Statement No. 1 and the direction IRS provides for Federal income tax purposes, such as the Employer’s Supplemental Tax Guide - Publication 15-A and the information in the IRS website. SBA tends to consider individuals to be employees where it is not clear that they are independent contractors.
If I own the company applying for HUBZone certification, should I include myself when calculating the number of employees?
Yes. Additionally, any individual with an ownership interest in and who works for the HUBZone firm a minimum of 40 hours per month is considered an employee regardless of whether or not the individual receives compensation.
My firm is very small and cannot afford to pay an employee but I have an agreement that I’ll pay her as soon as we obtain our first contract. I also pay the rent in her apartment as in-kind compensation. Can I count her as an employee?
Yes, because the employee is expecting to receive compensation. Additionally, the individual is receiving in-kind compensation.
I just hired a new employee. How soon can I apply?
You can apply at any time you believe you are eligible. However, in order to count that individual as an employee toward the principal office and 35% HUBZone residency requirement, you must be able to provide documents (e.g., payroll records), which cover the date of your application, showing that the employee worked a minimum of 40 hours in that month.
I hire seasonal employees. Are they considered to be employees for the purpose of HUBZone certification?
For your firm to remain eligible, it must meet the eligibility criteria both “in season” and “out of season” because your seasonal employees are counted when they are working and not counted when they are not.
There is no exception in the HUBZone regulations for seasonal employees and your firm must remain in compliance with all HUBZone regulations at all times. This means that if SBA is conducting an evaluation of the 35% requirement, you will have to provide supporting documentation that lists the employees who are working at that time, seasonal or otherwise.
How should I count an employee who is on leave at the time my firm is being reviewed for HUBZone compliance?
Employees on temporary leave, including sick leave and maternity leave, will be counted as employees if there is evidence that the individual is being paid or will or has returned back to work and there is evidence they worked prior to the leave. Those on indefinite leave will not be counted.
What is acceptable evidence that the employee will return to work?
Signed statements from the employee and/or the employer with a definitive timeline for the employee’s return.
If the leave status is with pay or without pay, does this make a difference? Why or Why not?
If the temporary leave is paid, then the individual conclusively counts as an employee because the individual is still listed in the payroll documents as being paid. If the leave is unpaid, then the firm must provide evidence that the individual has previously worked at the firm and will return/has returned.
How does SBA define the term "principal office?"
It's the location where the greatest number of employees at any one location actually perform their work, except for construction and service industries, which have exemptions based on their occasional need to assign employees at the contract location.
Is the principal office the same as the firm's headquarters?
The "principal office" does not have to be the company's headquarters. It could happen that a small business might have a headquarters in a non-HUBZone location and establish a principal office within a HUBZone locality and still qualify legitimately for program participation.
Does a virtual office meet the principal office requirement?
The HUBZone regulations define principal office as the place where the greatest number of employees perform their work. This means that the virtual office would be considered to be the principal office if it is the place where the greatest number of employees perform their work.
I have an employee who works partially in the principal office and a secondary office. Where do I allocate that employee?
Allocate the employee to the principal office if the person works a majority of their time there. If employee works a majority of time in the secondary office, allocate that person to the secondary office. The secondary office could be another office of the firm (that you own and control) or a job site. Allocate employee to principal office if the person works an equal amount of time in principal and secondary office.
Example: Employee works 21 hours per month at the principal office and 19 hours per month at 2nd site (which could be a job site) à allocate employee as working at principal office.
I am the sole owner and have no other employees. I work 40 hours per month at a principal office(s) that is in a HUBZone. I am in the construction or services industry. Do I qualify as a principal office employee for the purpose of meeting the principal office requirement, regardless of the number of hours I work at the job sites?
Yes. The sole owner/employee of a business who works at least 40 hours per month at a principal office located in a HUBZone qualifies as a principal office employee, regardless of number of hours worked at job sites. This exception is limited to concerns with one person only who is both the owner and the employee.
Example 1: Sole owner/employee works 42 hours per month at a principal office (located in a HUBZone) and 83 hours per month at jobsites. The firm meets the principal office requirement.
Example 2: Sole owner/employee works 20 hours per month at the principal office (located in HUBZone), 20 hours per month at home office (located in HUBZone) and 40 hours per month at jobsites. In this situation the sole owner/employee would be counted as working at the principal office. What matters is that the sole owner/employee works 40 hours per month in the office(s).
Example 3: Sole owner/employee works 20 hours per month out of the principal office (located in a HUBZone) and spends the rest of the month working at jobsites. This firm would not meet the principal office requirement since the sole owner/employee does not spend at least 40 hours per month at the principal office.
NOTE: The sole owner/employee is limited to one home-based office and one non-home office and both must be located in a HUBZone. This policy only applies when the company has one employee/owner and is in the service or construction industry. As soon as the sole owner/employee hires at least one additional employee, the firm would be governed by the principal office definition in 13 CFR 126.103. SBA may consider the totality of the circumstance according to the facts of the case.
How does SBA define the term "reside" in reference to the employee residency requirement?
The term reside means to live in a primary residence at a place for at least 180 days, or as a currently registered voter, and with intent to live there indefinitely. Employers should be aware that it makes no difference which HUBZone their employees reside in. An employee can reside in one HUBZone and work in another and meet the standards for this residency requirement.
My employee does not have, and cannot obtain, a driver’s license or voter’s registration card corroborating her residency in a HUBZone. What evidence can I submit to prove that she resides in a HUBZone?
What if the applicant only has supporting documents showing a PO Box with no physical address?
The individual will have to reach out to a local government office to obtain the evidence. The filled out template below on official letterhead provided by a recognized local government entity is acceptable. This template does not need to be notarized.
[person’s name] lives at [home address] and has lived there since [dd/mm/yyyy]. I declare under penalty of perjury, under the laws of the United States of America, that the foregoing is true and correct to the best of my knowledge.
[signature and date]
[Local Government Entity]
What if my employee is a student residing in student housing that is in a HUBZone, but the employee’s driver’s license does not display this address?
To support the assertion that the student resides in student housing located in a HUBZone, the firm needs to provide:
1. A statement from an official or representative from the University, in letterhead, confirming the student’s residency status or a copy of an off campus housing lease showing the address to be in a HUBZone
2. The filled out, notarized template below from the employee.
This statement serves in lieu of a driver’s license and/or voter’s registration card as one cannot be obtained due to the following circumstances: [Explain circumstances here]. I am an employee of the firm [name of firm]. I, [person’s name], live at [home address] and have lived there since [ dd/mm/yyyy]. I declare under penalty of perjury, under the laws of the United States of America, that the foregoing is true and correct to the best of my knowledge.
[signature and date]
I have employees that reside in HUBZones but are working overseas, what evidence of HUBZone residence do I submit?
Evidence to show that the employee’s residence in the United States is located in a HUBZone would include: a properly executed lease, a valid (not expired) photo ID (such as a driver's license) that shows the HUBZone address, and/or a deed of trust. All documentation must cover the date of electronic verification. SBA may consider the totality of the circumstance according to the facts of the case.
My firm met all the eligibility criteria at the time I electronically authorized the online application, but while the application was being processed I lost 2 HUBZone employees and is now below the 35% residency requirement, what should I do?
Withdraw the application because a firm cannot be approved if it does not meet all the eligibility criteria. You will not need to wait 90 days to re-apply, but before re-applying you should develop a strategy on how the firm will meet the HUBZone requirements during the application process and once it becomes certified.
Is selecting employees based on residency requirement legal? Could this open the HUBZone certified company up for hiring discrimination litigation or violate such laws?
The statute that created the HUBZone Program requires that the HUBZone firm must have a minimum 35% of its employees residing in a HUBZone. Non-HUBZone residents are not a protected class under Federal law. According to the EEOC, discrimination may arise when hiring decisions are made on the basis of an applicant’s “race, color, religion, sex, national origin, disability, genetic information, or age”. See http://www.eeoc.gov/facts/qanda.html for more information.
Does a business on an Indian Reservation have to be Indian-owned to qualify for the HUBZone Program?
No. As long as the principal office of the business is located on an Indian reservation that is a HUBZone and meets all other eligibility criteria (e.g., ownership and control, 35% HUBZone residency requirement, etc.), it can become HUBZone certified.
I own a corporation that does not have any stock certificates or documentation issued by the company (pursuant to State law) showing ownership and control of the company. Would this lack of documentation prevent my firm from getting its HUBZone certification?
Yes, not being able to prove the firm’s ownership and control would result in a decline.
In general, SBA looks at stock certificates and stock ledgers to determine ownership and control because these documents will show each owner and the amount of ownership in the corporation.
Some states, however, do not require that a corporation issue stock certificates. In that case, SBA will look at your company’s articles of incorporation and/or by-laws. If the articles or by-laws require that you issue stock certificates, even though the state in which your business is incorporated does not require the issuance of stock certificates, SBA will require you produce those stock certificates to demonstrate ownership and control.
If your articles of incorporation or by-laws do not require that your company issue stock certificates, and the state in which your business is incorporated does not require the issuance of stock certificates, then you will need to check state law to determine whether your company is required to issue some other type of documentation showing ownership and control. For example, states that do not require a corporation issue stock certificates often require that the company issue each shareholder a written notice stating that the corporation is organized under the laws of the state, the name of the person to whom the shares are issued, and the number of shares owned. State law may also set forth signature and letterhead (and other) requirements for this documentation.
It is best to go to the Secretary of State website for the state in which you are incorporated to make sure that you have all the required documents and check your articles of incorporation and/or by-laws.
Again, without this information, SBA is unable to verify that the applicant is directly owned and controlled at least 51% by persons who are U.S. citizens (see definition of “citizen” and “person” at 13 CFR 126.103). Citizenship evidence is satisfied by a birth certificate or a copy of an unexpired passport.
I own other, unrelated businesses. How does that impact my application?
SBA may consider these other businesses to be affiliates. The term “affiliate” has a specific legal meaning for the SBA. The definition is at 13 CFR 121.103. Invest the time to study “affiliation” so that you can provide the documentation necessary for your firm to obtain the HUBZone certification. You will need to provide evidence that your firm, together with your affiliates, meets the size requirement for your primary NAICS code—which means that you must submit either business tax returns or federal unemployment tax returns for each affiliate. Details are in the supporting documentation request.
Review the HUBZone Certification Program Webinar – Part 2 where SBA explains affiliation in depth.
To understand more about how affiliates can impact your application, make sure to review the rest of the questions in this FAQ section.
Does SBA combine employees from affiliated companies when counting employees of the applicant firm?
It depends. SBA looks closely at all relevant information and uses the totality of circumstances(see definition of employee at 13 CFR 126.103; 13 CFR 121.103(a)(5), and 13 CFR 121.106) to determine if an individual is an “employee” of the HUBZone applicant or HUBZone small business for purposes of determining whether the business meets the 35% HUBZone residency and principal office requirements.
SBA first considers whether there is a clear line of fracture between an applicant firm and its affiliate(s). The HUBZone Certification Program Webinar – Part 2 explains affiliation in depth and the application of the totality of the circumstances test to determine if there is a clear line of fracture between the HUBZone firm and its affiliates. If it is not evident that there is a clear line of fracture, then SBA will consider the employees of the affiliate to be employees of the applicant or HUBZone small business (and vice versa). SBA reviews all of this information to preserve the integrity of the HUBZone program and prevent certain practices that circumvent the HUBZone Act and implementing regulations.
For example, Company A is not qualified for the program. The owners of Company A set up Company B, with a few employees, most or all of whom are HUBZone residents. Company B lists a principal office location in a HUBZone and seeks HUBZone certification. Both Company A and B are in the same line of work. When Company B gets a contract, it uses Company A's employees, equipment etc. Or, it subcontracts all or most of the work to Company A. In these situations, the SBA has used the totality of circumstances to determine that the employees of Company A are actually employees of Company B (or vice versa). As a result, Company B may not meet the principal office and/or the 35% employee HUBZone residency requirement when the employees from Company A are added the to the employees from Company B.
If the two companies are sharing employees, and that’s all, then only the shared employees will be counted as employees of the applicant/HUBZone small business if they work at least 40 hours in a month for the applicant/HUBZone small business and receive compensation (unless an owner).
How can I find out if my business is located in a HUBZone?
Use the HUBZone Maps to determine if your principal office is located in a HUBZone. You can search for a specific address, or enter geographic coordinates.
How can I find HUBZones in my area? I don't have a specific address in mind.
Using the HUBZone Maps, you can generate maps and tables of Qualified Census Tracts, Qualified Nonmetropolitan Counties, Qualified Indian Lands, or Qualified Base Closure Areas by state or county.
What are the different types of HUBZone designations?
A HUBZone may be one of the following:
- A qualified Census Tract (QCT)
- A qualified Nonmetropolitan County (QNMC)
- A qualified Indian Reservation (QIR)
- A Qualified Base Closure Area (QBA)
- A Redesignated Area
You can also watch the HUBZone mini-primer on Understanding HUBZone Designations.
How are HUBZones designated?
The SBA uses information obtained from the Department of Housing and Urban Development (HUD), the Bureau of the Census, the Bureau of Labor Statistics (BLS), the Department of Interior, Bureau of Indian Affairs and the Department of Defense. The HUBZone areas are designated by statute and draw upon determinations and information obtained by other agencies. The SBA does not have discretion when it comes to designating HUBZones. You can read more about each specific type of designation below.
What is a Qualified Census Tract (QCT)?
The US Department of Housing and Urban Development (HUD) designates Qualified Census Tracts (QCTs) for purposes of the Low-Income Housing Tax Credit (LIHTC) program. The LIHTC program is defined in Section 42 of the Internal Revenue Code of 1986. The LIHTC is a tax incentive intended to increase the availability of affordable rental housing.
The LIHTC statute provides two criteria for QCT eligibility. A census tract must have either:
- a poverty rate of at least 25 percent; or
- 50 percent or more of its householders must have incomes below 60 percent of the area median household income. The area corresponds to a metropolitan or a non-metropolitan area.
Further, the LIHTC statute requires that no more than 20 percent of the metropolitan area population reside within designated QCTs (This limit also applies collectively to the nonmetropolitan counties in each state). Thus, it is possible for a tract to meet one or both of the above criteria, but not be designated as a QCT.
The Census Bureau defines the boundaries of Census tracts in cooperation with local authorities every ten years for the purposes of the decennial census and, following a public comment period, has completed defining tract boundaries for the 2010 Census. Note that when census tract boundaries are set, they remain unchanged for the next decade. Thus, tract boundaries will not be changed until the 2020 Decennial Census.
A QCT may be located in a nonmetropolitan county or metropolitan area.
What is a Qualified Nonmetropolitan County (QNMC)?
A Qualified Nonmetropolitan County is any county not located in a metropolitan area and meets any or all of the following three criteria:
- the county's median household income is less than 80% of the nonmetropolitan state median household income, based on the most recent data available from the Census; or
- the county's unemployment rate is not less than 140 percent of the average unemployment rate for the United States or for the State in which such county is located, whichever is less, based on the most recent data available from the BLS; or
- the county includes a Difficult Development Area (DDA), as designated by HUD in accordance with section 42 of the Internal Revenue Code of 1986, within Alaska, Hawaii, or any territory or possession of the United States outside the 48 contiguous States.
What is a Qualified Base Closure Area (QBA)?
A Base Closure Area means the lands within the boundaries of a military installation that was closed through a privatization process under the authority of the Defense Base Closure and Realignment Act of 1990, the Title II of the Defense Authorization Amendments and Base Closure and Realignment Act, the Section 2687 of title 10, United States Code, or any other provision of law authorizing or directing the Secretary of Defense or the Secretary of a military department to dispose of real property at the military installation for purposes relating to base closures or redevelopment, while retaining the authority to enter into a leaseback of all or a portion of the property for military use. Once the base is effectively closed, with land surplus to be used for purposes of economic development of the area, it will be HUBZone designated for a period of 5 years, beginning on the official date of closure and ending the same date, five years later. See the definition at 13 CFR § 126.103.
With the exception of providing SBA the designations of closed military base areas with surplus of lands to be used for economic development of the affected areas, none of the agencies that recognize them have any relationship with the HUBZone program.
What is a Qualified Indian Land?
Qualified Indian Lands are areas within the boundaries of Indian reservations. Indian reservation has the same meaning as, 1) the term "Indian Country" in 18 U.S.C. 1151, and, 2) a specific definition in the State of Oklahoma.
Lands that were taken into trust ("Off Reservation Trust Lands") or acquired by an Indian tribe after December 21, 2000 are NOT HUBZones unless:
- such lands are located within the external boundaries of an Indian reservation or former reservation OR
- they are contiguous to the lands held in trust or restricted status as of December 21, 2000.
Please see 13 CFR § 126.103 for details.
What is a HUBZone Redesignated Area?
The SBA Act provides for grandfathering QCTs and QNMCs that lose their HUBZone eligibility. During this grandfathering period, the area is termed a redesignated area. The redesignation expires three (3) years after the date on which the census tract or nonmetropolitan county ceased to be qualified (i.e., became redesignated).
Every year, some redesignated HUBZones expire. If your firm's principal office is in a redesignated HUBZone that is approaching expiration or your firm's employees reside in such an area, please refer to the Maintaining Certification; Decertification section for details on what you can do.
When are the maps updated?
The maps are updated several times a year as new data becomes available. Sign up for email alerts to notify you when there is a map update. Please refer to the table below for an idea of how often a designation could change.
Data Update Frequency
|Source Data Agency|
|Qualified Census Tract||-||Per HUD update||Department of Housing and Urban Development|
|Qualified Nonmetropolitan County||Qualified by unemployment||Annually||Bureau of Labor Statistics|
|Qualified by income||Annually||Census Bureau|
|Qualified Difficult Development Area (DDA)||Annually||Department of Housing and Urban Development|
|Qualified Indian Land||-||
|Bureau of Indian Affairs|
|Qualified Base Closure Area||-||As necessary||Department of Defense|
See the maps page for the latest announcements and updates.
The HUBZone Maps incorrectly plotted my address. Can you fix the map?
No mapping platform can accurately plot every address. If you believe the HUBZone Maps have located your office at the wrong place, you can email a detailed description of the error to Hubzone@sba.gov for additional assistance.
My firm was declined because it did not respond to the request for clarification but I never received the email. What are my remedies?
You may reapply after 90 calendar days from the date of decline. In the future, remember to check your email SPAM folder to make sure that you are receiving all the emails from SBA. Certain email filters may assume that the messages are spam, and block them accordingly.
My firm’s application was [declined or decertified] on May 22, 2013. I have resolved the [decline or decertification] reason(s) and I plan on submitting another application on August 23, 2013. Can you re-use the documents from my previous application?
We may be able to use some of the documents you previously submitted if this application was electronically authorized in less than 120 days from the date the firm was declined, or decertified. In order to take advantage of this abbreviated document request, you would need to email email@example.com explaining that your firm is reapplying after being declined or decertified with the following text in the Subject of the email: “[Name of Firm] [HUBZone application number] declined/decertified on [enter mm/dd/yy] – reapplying within 120 days.” If we do not receive this notice from you we’ll ask for the standard full supporting documentation request.
What supporting documents can SBA reuse if I fall in this category (i.e., reapplying within 120 days)?
You may not need to submit the following supporting documents, unless there has been a change since your most recent submission and/or the analyst determines that additional information is needed to decide eligibility:
- Ownership documents such as corporate by-laws, stock certificates, articles of organization, etc.
- Federal Business Income Tax Returns for the applicant firm and all of its affiliates identified in the application for the most recently available previous 3 years.
- Most recently available 12 months of quarterly unemployment reports if firm’s primary NAICS code has an employee based size standard
- Federal Personal Income Tax Returns for all owners who have 20% or more ownership of the firm
- Proof of US Citizenship for owners
- Franchise Agreement
- ESOP plan or Trust Agreement
- State and federal employment filings (Form 941- Employer's Quarterly Federal Tax Form)
- It is the firm’s responsibility to proactively advise our office of the previous HUBZone application number and date they applied. If this information is not supplied by the firm, then this step is void. The HCTS notice the applicant receives after its application is electronically authorized, contains instructions regarding this shortened documentation submission.
How long does the HUBZone certification last?
When you become HUBZone certified, you may continue to have this status indefinitely so long as you meet all of the eligibility requirements at all times. Additionally, you must undergo recertification every three (3) years. Unless it is determined that you are no longer meeting all of the requirements, you may be continuously certified throughout this period.
SBA will send you a notice when it comes time to recertify because there is no mechanism for you to initiate the recertification process. This means that you may not receive the notice on your 3rd anniversary. For example, a firm certified on January 2, 2010 may receive the recertification notification on August 20, 2013. This means that the firm continues to be certified until it is decertified because it no longer meets the HUBZone requirements.
Where should I report material changes?
Report material changes to firstname.lastname@example.org.
What is a "material change"?
A "material change" includes, but is not limited to:
- Change in the ownership
- Change in business structure
- Change in principal office
- Failure to meet the 35% HUBZone residency requirement
What happens if I fail to report a material change?
Any HUBZone firms found to misrepresent themselves during their HUBZone Program participation or on a Federal contract could be subject to a range of civil or criminal penalties and/or suspension or debarment from Federal contracting.
My principal office is in and/or some of my employees live in a HUBZone which says "Redesignated until October 201X (i.e., October 2013, October 2014, etc). What happens in October 201X?
On or after October 1, 201X all certified HUBZone small businesses whose principal office is located in a redesignated HUBZone that has expired will be proposed for decertification. Your firm will have 30 days to respond to the proposed decertification letter.
What can I do in the meantime?
Conduct an eligibility self-evaluation to see if on October 1, 201X any of the HUBZone addresses that affect your eligibility (e.g, principal office address, addresses of employees who reside in a HUBZone) will no longer be HUBZone.
How do you know if a principal office or employee residency address is in a redesignated HUBZone that is about to expire on October 1, 201X?
Go to the HUBZone maps and check the address. If the map result shows that the address will be "Redesignated until October 201X" then the address is in a HUBZone due to expire on October 1, 201X.
What can I do if I see that, effective October 201X, my firm will not meet the 35% HUBZone residency and/or the principal office requirement(s)?
Your firm will not be eligible to submit an offer or receive an award of a HUBZone contract as of October 01, 201X. 13 CFR 126.501 You can submit a completed voluntary decertification agreement and reapply once a) 90s days has passed from the voluntary decertification and b) your firm meets all of the eligibility requirements. Note that the voluntary decertification form may still have the old one year waiting period to apply. If this is the case, you may still use this old form and be able to reapply ninety (90) calendar days from the date of the voluntary decertification.
Under what circumstances will SBA propose decertification for my firm?
Your firm will be proposed for decertification if you fail to comply with the eligibility requirements at any time. You will have 30 days to respond to the proposed decertification letter.
I voluntarily decertified/was decertified by SBA/was declined. How long until I can reapply?
You may reapply 90 days from the date of any of the above actions, provided that your firm has overcome all reasons for decline or decertification through changed circumstances and it is currently eligible.
What happens to my current HUBZone contracts if I voluntarily decertify?
If you are working on a HUBZone contract at the time you voluntarily decertify, you may continue to work on the contract.
Can an option on a HUBZone contract be exercised if I voluntarily decertify?
In most cases, the contracting officer will be required to follow FAR subpart 17.2 in deciding whether to exercise an option.
Must a firm be a qualified HUBZone SBC at the time of each order on a HUBZone Multiple Award Contract?
A firm that is a qualified HUBZone SBC at the time of initial offer and contract award, including a Multiple Award Contract, is considered a HUBZone SBC throughout the life of that contract. This means that if a HUBZone SBC is certified at the time of initial offer and contract award for a Multiple Award Contract, then it will be considered a HUBZone SBC for each order issued against the contract, unless a contracting officer requests a new HUBZone SBC certification in connection with a specific order. But, there are some important exceptions that you need to know. These are explained in 13 CFR 126.601(h).
Can I submit a bid after the material change which affects my eligibility but before I am effectively decertified?
The HUBZone regulations, 13 CFR 126.601(c), require that a firm must be a qualified HUBZone SBC both at the time of its initial offer and at the time of award in order to be eligible for a HUBZone contract. Note that FAR clause 51.219-3, "Notice of Total HUBZone Set-Aside or Sole Source Award" and 52.219-4, "Notice of Price Evaluation for HUBZone Small Business Concerns" both require the HUBZone offeror to provide the Contracting Officer a copy of the notice required by 13 CFR 126.501 if material changes occur before contract award that could affect its HUBZone eligibility. In other words, if you are an offeror for a HUBZone contract, you would be required to notify the Contracting Officer if your principal office is no longer in a HUBZone or if you no longer meet the 35% HUBZone residency requirement.
If I follow the new FAR rule on nondisplacement of qualified workers, does this mean I don’t have to have my principal office in a HUBZone or at least 35% of my employees residing in a HUBZone?
No, you still have to meet the HUBZone program’s requirements to remain eligible for the program.
Does the FAR nondisplacement rule create an exception for HUBZone small business concerns?
No, the FAR rule does not create an exception. The final rule, however, does take into account the effect Executive Order 13495 may have on HUBZone small business concerns. Specifically, the rule sets forth a policy statement and a paragraph in the contract clause, which state that nothing in Executive Order 13495 can be construed to permit a contractor or subcontractor to fail to comply with any provision of other Executive Order or law. This would include a HUBZone small business concern's compliance with the HUBZone provisions of the Small Business Act and any contractor's or subcontractor's compliance with Executive Order 11246 (Equal Employment Opportunity) or the Vietnam Era Veterans' Readjustment Assistance Act of 1974. Therefore, HUBZone small business concerns are not exempt from the Executive Order; instead, the policy statement and clause explain that HUBZone small business concerns must try to meet the Executive Order’s requirements in tandem with the HUBZone program's requirements.
How can I meet both requirements(the FAR rule and HUBZone) in tandem?
HUBZone small business concerns must ensure they comply with the statutory and regulatory requirements of the HUBZone program, especially as they relate to the requirement to ensure that at least 35% of its employees reside in a HUBZone. A HUBZone small business concern can meet the requirements of Executive Order 13495 and the HUBZone program requirements by first providing a right of first refusal to the HUBZone residents of the predecessor contractor. If necessary to reach the residency threshold, the successor HUBZone SBC would next extend offers of employment to qualified residents of a HUBZone who were not employees of the predecessor. The HUBZone SBC could next extend offers for the remaining vacancies to non-HUBZone resident qualified employees of the predecessor awardee.
At all times, the HUBZone SBC would need to first ensure that it meets the statutory requirements of the HUBZone program so that it is not decertified, and must consider the predecessor's employees pursuant to the Executive Order in doing so.
Who may protest the status of a qualified HUBZone Small Business Concern (SBC)?
For sole source procurements, SBA or the contracting officer (CO) may protest the proposed awardee's qualified HUBZone SBC status. For all other procurements, SBA, the CO, or any other interested party may protest the apparent successful offeror's qualified HUBZone SBC status.
How does one file a HUBZone status protest?
The full protest process is explained in the HUBZone mini-primer Understanding HUBZone Protests. Protests must be in writing and state all specific grounds for the protest. A protest merely asserting that the protested concern is not a qualified HUBZone SBC, without providing specific facts or allegations, is insufficient. If you are not a contracting officer, you must submit your written protest to the contracting officer in person, by fax, or by mail. The contracting officer will then deliver the protest to the Director of the HUBZone program using email@example.com, who will then decide the outcome of the protest. Note that there is a size limit of 5 MB per email so you may need to break your submission into multiple emails. If you send the documents by fax, the number is (202) 205-7167. Note that there is a 20 page limit when faxing, so you may need to break your submission into multiple faxes. If you send the documents by mail, the address is U.S. Small Business Administration, HUBZone Contracting Program, Attention: Mariana Pardo, Director, 409 3rd Street, SW, 8th floor, Washington, DC 20416. Additional details are in the HUBZone Regulations in 126.801(e).
When should one file a HUBZone protest?
For negotiated acquisitions, you must submit your protest by close of business on the fifth business day after notification by the contracting officer of the apparent successful offeror.
For sealed bid acquisitions:
- You must submit the protest by close of business on the fifth business day after bid opening, or
- If the price evaluation preference was not applied at the time of bid opening, by close of business on the fifth business day from the date of identification of the apparent successful offeror.
DO NOT submit a protest prior to bid opening or notification of intended award.
How will SBA process a HUBZone status protest?
- SBA immediately will notify the contracting officer and the protestor of the date SBA receives a protest and whether SBA will process the protest or dismiss it. If SBA determines the protest is timely and sufficiently specific, SBA will notify the protested HUBZone SBC of the protest and the identity of the protestor. The protested HUBZone SBC may submit information responsive to the protest within 5 business days.
- SBA will determine the HUBZone status of the protested HUBZone SBC within 15 business days after receipt of a protest.
- If the protested HUBZone SBC is found to be ineligible for the HUBZone award it will be deemed ineligible for the HUBZone program and will be decertified from the program. This determination will be effective immediately and is final unless overturned on appeal.
- If SBA does not issue its determination within 15 business days (or request an extension that is granted), the contracting officer may award the contract if he or she determines in writing that there is an immediate need to award the contract and that waiting until SBA makes its determination will be disadvantageous to the Government.
- SBA will notify the contracting officer, the protestor, and the protested concern of its determination. The determination can be appealed to the AA/GC&BD.
- A contracting officer may award a contract to a protested concern after the Director of the program has determined either that the protested concern is an eligible HUBZone or has dismissed all protests against it. If the AA/GCBD subsequently overturns the initial determination or dismissal, the contracting officer may apply the appeal decision to the procurement in question. A contracting officer shall not award a contract to a protested concern that the D/HUB has determined is not an eligible HUBZone for the procurement in question.
- A concern found to be ineligible is precluded from applying for HUBZone certification for ninety (90) calendar days from the date of the final agency decision.
What are the procedures for appeals of HUBZone status determinations?
Refer to the HUBZone regulations (13 CFR 126.805) for these instructions.
What if I think that the proposed awardee is not a small business?
The process for filing a size-based protest is similar to the HUBZone protest process and is detailed at http://www.sba.gov/content/size-protests-size-determinations-and-appeals.
Does a HUBZone Joint Venture (JV) need to be certified as such?
Since it is unlikely that it would meet the ownership and control requirement, the HUBZone regulations do not provide for approvals of HUBZone JVs. Joint ventures are generally owned by one or more business concerns and therefore are not directly owned 51% by individuals who are United States citizens as required by 13 FR 126.200(b)(1).
There is one exception to this general rule. By statute, a HUBZone small business can be:
- an ANC owned and controlled by Natives (determined pursuant to section 29(e)(1) of the ANCSA); or
- a direct or indirect subsidiary corporation, joint venture, or partnership of an ANC qualifying pursuant to section 29(e)(1) of ANCSA, if that subsidiary, joint venture, or partnership is owned and controlled by Natives (determined pursuant to section 29(e)(2)) of the ANCSA).
If the JV itself has employees working for it, it does not have to meet the 35% employee residency requirement because the JV is not a HUBZone certified entity that had to abide by the HUBZone eligibility requirements – correct?
Correct – the JV is not the HUBZone certified company. However, we will look at the employees in the JV to see if they are really employees of the applicant firm by using the totality of circumstances policy (see definition of employee at 13 CFR 126.103; 13 CFR 121.103(a)(5), and 13 CFR 121.106). If JV employees perform work for the applicant firm, they may be considered to be employees of the applicant firm and would be counted in the 35% calculations as well as in the determination of principal office.
One of the firms in our HUBZone joint venture is not currently certified. May we submit bids on HUBZone set-asides?
If one of the parties to the JV is not a qualified HUBZone small business at the time of offer OR award, it would not be considered a qualified JV eligible to receive a HUBZone contract. 13 C.F.R. § 126.616(a)
If all firms in a JV are HUBZone certified at time of award in a Multiple Award contract, but in year 2, one of the companies of the JV are no longer considered HUBZone, how would that affect the option years?
It will be considered a HUBZone JV for each order issued against the contract, unless a contracting officer requests a new HUBZone certification in connection with a specific order. Where a concern is later decertified, the procuring agency may exercise options and still count the award as an award to a HUBZone SBC. Exceptions apply. See 13 C.F.R. § 126.601(h) for details.
I have a HUBZone JV which was awarded a HUBZone set-aside contract. However, the SAM profile for the HUBZone Joint Venture does not display its HUBZone certification status. What do I do? My contracting officer wants to know how the agency can obtain HUBZone credit.
The HUBZone regulations do not provide for approvals of HUBZone JVs. Consequently, when two HUBZone small business concerns form a JV (in accordance with 13 CFR 126.616), the JV's SAM profile does not list its HUBZone status.
In addition, we note that the FAR does not specifically address registration of joint ventures in the SAM. It only states that: "Prospective contractors shall be registered in the [SAM] database prior to award of a contract or agreement," with certain exceptions. FAR § 4.1102. In addition, the FAR requires that all parties to the joint venture sign the contract:
(d) Joint ventures. A contract with joint ventures may involve any combination of individuals, partnerships, or corporations. The contract shall be signed by each participant in the joint venture in the manner prescribed in paragraphs (a) through (c) above for each type of participant. When a corporation is participating, the contracting officer shall verify that the corporation is authorized to participate in the joint venture. FAR § 4.102.
Therefore, if each business concern or participant to the joint venture must sign the contract, then if each business concern or participant to the joint venture is registered in SAM that could satisfy the FAR registration requirements of § 4.1102.
In any event, we understand that in the past, agencies have entered in the name of one of the HUBZone JV partners in the Federal Procurement Data System (FPDS) to get the HUBZone credit.
I have a general question I would like to ask. What number can I call?
HUBZone offers eligibility assistance on Tuesdays and Thursdays from 2-3pm ET. Participants influence the topics by their questions. HUBZone staff facilitates the discussion by providing the answers and introducing specific topics as time allows. For call in details, click here.
Who can attend the office hours?
Anyone can attend but this helpline open forum is best suited for firms that are currently certified and want to assure that they remain certified and for those businesses that are considering applying for HUBZone certification.
Firms seeking a specific status of their application or that have questions about the supporting documentation requested are encouraged to e-mail directly their SBA HUBZone Business Opportunity Specialist working on their application. This person is in the best position to provide this type of individual assistance.
What if I need more help?
If you are having map server issues, or the address cannot be found or is miss-plotted please email HUBZone@sba.gov. Please write the nature of your concern in the subject line of the E-mail, for example, "Mapping question," or "Address not found."
You may also email your specific question, with as much detail as possible, to Hubzone@sba.gov.
Please email GLS@sba.gov for problems accessing the General Login System (GLS).
Access https://www.sam.gov/ for assistance with your firm’s profile in the System for Award Management system (SAM).
Your SBA district office can provide local assistance including certifications, financing, etc. The list of local offices is here.
The SBA Answer Desk at 1-800-827-5722 and firstname.lastname@example.org can also answer general questions.
For more information about Government Contracting, visit: http://www.sba.gov/contracting.