HELPING ECONOMICALLY DISTRESSED AREAS IN NORTH CAROLINA
The Federal HUBZone Program

If you want every advantage that you are entitled to in selling to the federal government, you should understand the federal HUBZone (Historically Underutilized Business Zone) program. The HUBZone Empowerment Contracting Program stimulates economic development and creates jobs in communities by providing federal contracting preferences to small businesses. These preferences go to small businesses that obtain a no-cost HUBZone certification in part by employing staff who live in a HUBZone. The company must also maintain a "principal office" in one of these specially designated areas (NOTE: A principal office can be different from a company headquarters). Federal agencies have a statutory goal in awarding HUBZone contracts of at least 3 percent of the dollars they spend. This federal program is sometimes confused with the North Carolina HUB program http://www.ips.state.nc.us/ips/vendor/vndpubmain.asp, a very important but different program.

What exactly is a HUBZone?
A "HUBZone" is a geographic area that may be as large as an entire county or as small as a strip within a town or city. It is an economically distressed area that is located in one or more of the following:

• a qualified census tract
• qualified "non-metropolitan county" with a median household income of less than 80 percent of the state's median household income or with an unemployment rate of not less than 140 percent of the statewide average (based on US Department of Labor recent data)
• lands within the boundaries of federally recognized Indian reservations

How do I qualify for HUBZone Status?
A business must meet all of the following criteria to qualify for the HUBZone program:

• It must be a small business.
  
• Its principal office (its employment center) must be located in a "historically underutilized business zone" or HUBZone.
  
• It must be owned and controlled by one or more US citizens, and
  
• At least 35 percent of its employees must reside in a HUBZone itself.

How do I find out if my business is located in a HUBZone?
On the internet, go to the HUBZone home page at https://eweb1.sba.gov/hubzone/internet/ and fill in the address of your principal office. In a matter of seconds, you will be notified if you are located in a HUBZone. At that same internet site, you can search the database of HUBZone firms to see who is already certified.

What kind of assistance is available to firms certified as HUBZone firms?
There are three ways that a HUBZone firm may be provided assistance, or preference, in federal contracting: 1) a sole source contract could be awarded to the HUBZone firm, or 2) a price evaluation preference could be applied to assist a HUBZone firm in a competition with non-HUBZone firms. In that case, the offer of the HUBZone small business will be considered lower than the offer of a non-HUBZone/non-small business, provided that the offer of the HUBZone small business is not more than 10 percent higher, or 3) the competition for a particular contract could be set aside for only HUBZone firms. A HUBZone set-aside contract can be awarded if the contracting officer has a reasonable expectation that at least two qualified HUBZone small businesses will submit offers and that the contract can be awarded at a fair market price.

There is also a subcontracting angle to being a HUBZone certified firm. On being certified as a HUBZone firm you will be entered by the SBA in a HUBZone database that can be searched by prime contractors looking for subcontractors who are certified as HUBZone firms.

Applying for HUBZone Certification
To participate in the program, your firm must be certified by the US Small Business Administration (SBA) as a qualified HUBZone small business. Before you apply for HUBZone certification you must register on the Internet with Central Contractor Registration (CCR) at www.ccr.gov. Having registered at CCR, you can then complete an electronic application at www.sba.gov/hubzone or at https://eweb1.sba.gov/hubzone/internet/. The SBA estimates that it will take you about one hour to complete this application, and they will take no more than 30 days to process your application. Before you start, you should have the following information at hand:

• Special licenses
  
• If your firm is a corporation, its articles of incorporation and stockholder's register; if your firm is a partnership, its partnership agreement; if your firm is a limited liability company, its company agreement
  
• Financial statements for your firm's three most recently completed fiscal years. If your firm has been in operation less than three years, financial statements covering however long it has been in operation
  
• If it's a franchise, the franchise agreement
  
• A current employee roster providing employee name, home address, and date of employment
  
• Employment records for the past twelve months
  
• A listing of any Federal Employment Tax Credits your business receives
  
• Information on any current bonding arrangements through a company or individual not formally recognized as a surety provider
  
• Information on any non-bank lender(s) who provides credit to your firm (should cover name and citizenship of creditor as well as amount owed)
  
• Information (name, address, kind of business, etc.) about any other businesses that the owners, directors, or officers of your business own or manage
  
• Information from the birth certificate (or certificate of naturalization) for each owner, manager, member of the board of directors, or officer.

Need help? Contact your nearest PTAC counselor who will be glad to answer your questions and advise you on how to proceed.

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