The United States Small Business Administration (SBA) recently issued a final rule to implement changes to its Historically Underutilized Business Zone (HUBZone) program. The changes are designed to attract incentivize small businesses to establish footholds in economically distressed communities that make up the HUBZones. This includes hiring residents from within the HUBZones.
According to the SBA, the rule changes mean federal contracting officers to find and form relationships with small businesses that are HUBZone-certified.
There are numerous HUBZones located throughout the country. The SBA has an interactive map on its website that shows exactly where they all are.
In recent years, Colorado counties in HUBZones include Montezuma, Conejos, Rio Grande, Alamosa, Costilla, Huerfano, Dolores, San Juan, Delta, Saguache, Fremont, Custer, Las Animas, Baca, Otero, Crowley, Bent, Prowers, Kiowa, and Sedgwick. Please check the latest status as these might have changed.
Click here to view an interactive HUBZone map.
One new change is that an employee who has lived in a HUBZone for at least half a year at the time of certification or recertification, and is still in one for at least six months, will remain a HUBZone resident if their small business continues to work with them. This rule applies even if the resident leaves to take up residence in a non-HUBZone location or if the area loses its HUBZone qualification.
Another change is that maps will not receive an update every year, instead amending to reflect new info on every five year basis. They will utilize information from the Department of Housing and Urban Development, the Department of Labor, and the Census Bureau.
Additionally, businesses that purchase a structure or enter into a rental lease for 12 months can maintain a 10-year certification even if the location loses HUBZone status, provided the business meets the HUBZone program requirements.
Other changes are related to contracting provisions. For example, if a business is certified when first presented with a contract, it will continue to qualify as a HUBZone business over the life of the agreement. If a business is qualified when given an initial proposal for a HUBZone Multiple Award Contract, it shall remain certified for each order issued against that contract.
Acting SBA Administrator Chris Pilkerton commented, “The exciting improvements outlined in this rule were designed to address longstanding uncertainty from both small businesses contemplating an investment in a designated HUBZone, as well as government agencies which seek to use HUBZone companies. We anticipate that these impactful changes will lead to the increased use of HUBZone-certified small businesses across the country. Further, additional program enhancements which will expand the HUBZone footprint and provide greater support to HUBZone eligible small businesses will allow contracting officers to better identify more HUBZone firms and get federal contracts into the hands of those businesses.”
The HUBZone changes took effect on December 26, 2019.
Additional changes went into effect in January 2020. These include permission for governors to create annual petitions for the SBA to assign remote locations as HUBZones. These areas must have resident numbers under 50,000, along with unemployment percentages of 120% of the US or state average. These petitions also promote the expansion of the “Early Engagement Initiative,” which aims to increase the procurement readiness of businesses looking to apply.
Here is contact information for the Colorado SBA District Office:
721 19th Street
Suite 426
Denver, CO
303-844-2607
https://www.sba.gov/offices/district/co/denver
Alpine Bank offers numerous services for small businesses. Learn more about SBA-backed real estate loans for small businesses at Alpine Bank here, or decide if one of our business checking accounts is right for you.
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