Office of Government Contracting & Business Development

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May 3, 2012

“The HUBZone Primer”Eligibility & Certification Requirements

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9:00 – 9:30am Registration

9:30 – 9:45am Welcome, Introductions, and Opening Remarks Kathleen Piper, Deputy District Director, SBA NE District Office

9:45 – 10:05am HUBZone 101 Lisa Tedesco, Business Opportunity Specialist, SBA NE District Office-Requirements of HUBZone Certification-Do You Qualify? Documents Necessary to Apply for HUBZone Certification

10:05 – 10:15am Break

10:15 – 11:00am HUBZone “How-To”Kathleen Piper, Deputy District Director, SBA NE District OfficeHow to Complete a HUBZone Application

11:00 – 11:15am HUBZone Best Practices Panel and Q&A Mary Graff, NE PTAC – ModeratorBMAKK Corporation, Dr. Bennett Achigbu – HUBZone-certified company-Maintaining HUBZone Certification-How to be successful in the HUBZone ProgramHow to be successful in the Federal marketplace

11:15 – 11:30am Nebraska Procurement Technical Assistance Center (PTAC) OverviewAndy Alexander, Program Manager, NE PTAC

11:30am Wrap up

-- HUBZone Program --

• Program is designed to help small firms in certain communities gain access to federal contract opportunities

• HUBZone areas: typically areas of low median household incomes or high unemployment, or both

• At any given time, there are about 6,000 small firms certified in the HUBZone program

Provides federal contracting assistance to qualified small firms in designated HUBZones to:

1. Increase employment opportunities

2. Stimulate capital investment

3. Empower communities through economic leveraging

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SBA regulates and implements the HUBZone program

– Determines which businesses are eligible

– Maintains a listing of qualified HUBZone firms to fulfill procurement opportunities

– Adjudicates protests of eligibility regarding HUBZone contracts

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1. Contract set-asides

2. 3% government-wide prime and subcontracting goals

3. 10% price evaluation preference in full and open contract competitions

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1. A sole source HUBZone contract can be awarded if the contracting officer does not have a reasonable expectation that two or more qualified HUBZone small businesses will submit offers, determines that the qualified HUBZone small business is responsible, and determines that the contract can be awarded at a fair price. The government estimate cannot exceed $6.5 million for manufacturing requirements or $4 million for all other requirements.

2. A competitive HUBZone contract can be awarded if the contracting officer does have 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.

3. A full and open competition contract can be awarded with a price evaluation preference. The offer of the HUBZone small business will be considered lower than the offer of a non-HUBZone/non-small business-providing that the offer of the HUBZone small business is not more than 10% higher.

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• 6,700 small firms certified in the HUBZone program • In fiscal year 2010, $12B in prime contracts to Hubzone firms,

including $3B in HUBZone set-asides.

In Nebraska:• 29 active Hubzone certified firms (ccr.gov)

• Fiscal year 2011: $25.7M in HUBZone contracts (fpds.gov)

2.3% of total obligated dollars in Nebraska for fiscal year 2011 ($1.1B)

1. Small business (by SBA standards/primary NAICS code)2. Owned and controlled by at least 51% U.S. citizens or a

community development corporation, an agricultural cooperative, or an Indian tribe

3. Principal office must be located within a designated HUBZone

4. At least 35% of its employees must reside in a HUBZone

Note: Different rules apply for Tribal Governments, Alaska Native Corporations, Community Development Corporations and small agricultural cooperatives. These are delineated in Title 13 of the Code of Federal Regulations, Part 126

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• Business must be directly and unconditionally owned and controlled by at least 51% U.S. citizens - - - 13 CFR 126.200(b) (1)(i)– Citizen means a person born or naturalized in the United States. SBA

does not consider holders of permanent visas and resident aliens to be citizens - - - 13 CFR 126.103

– Person means a natural person - - - 13 CFR 126.103

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• Principal office must be located within a designated HUBZone

– Principal office means the location where the greatest number of the concern's employees at any one location perform their work .

– For concerns whose “primary industry” is service or construction, the determination of principal office excludes the concern's employees who perform the majority of their work at job-site locations to fulfill specific contract obligations .

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• At least 35% of its employees must reside in a HUBZone

– Employees don’t have to live in the same hubzone as the principal office, just A hubzone.

– When determining % of employees that reside in a Hubzone, if the % results in a fraction, round up to the nearest whole number.

– Check the hubzone mapping tool with employee addresses to verify.

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Janitorial firm with •100 employees•95 work in job sites •HQ office is in a HZ•A 2nd office is in a non-HZ•HQ office has 3 employees•The 2nd office has 4 employeesFirm does not meet the principal office requirement because the greatest number of the concern's employees work at the non-HZ location

Question: Do the employees that work in the HZ office have to reside in a HZ?Answer: No

When dealing with the evaluation of the principal office - do not consider where employees liveWhen dealing with the evaluation of the 35% employee residency requirement - do not consider where employees work

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• Re-designated areas are former HUBZone areas that have had an improvement in their economic conditions -- as reflected in -- updated 2010 census data.

• In addition, such areas were granted an extended eligibility by Congress in 2004. This extended period ended on October 1, 2011, the date the Census Bureau publicly released the first results from the 2010 decennial census.

• 3,400 firms impacted nationwide for decertification– This includes firms where principal office is not located in a HZ anymore or

35% of its employees are no longer reside in a hubzone.

• Metropolitan Area Census Tracts : 10,169 areas– “Qualified Census Tract” that meets test for Low Income Housing Tax

Credit. (HUD) (Changes with decennial census.)

• Non-metropolitan Counties: 1,349 counties– Median household income is less than 80% of the non-metropolitan

state level (Census) (Changes with decennial census.)– Unemployment rate that is at least 140% of the lower of the state-

wide or U.S. average (BLS) (Changes annually.)

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• Federally recognized Indian Reservations: 659– Locations include land meeting the definition of Indian Country (BIA

and IRS) (Change is periodic)

• Difficult Development Areas: 67 locations– “Difficult Development Area” external to continental U.S. that meets

test for Low Income Housing Tax Credit. (HUD) (Changes with decennial census)

• Former military base closed by BRAC: 48– Former military bases closed as a result of Base Realignment and

Closure Act (BRAC). Locations remain HUBZone for five years after date of closing or, if already closed by Dec. 8, 2004, five years from that date. (Defense) (Changes periodically)

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http://map.sba.gov/hubzone/maps/

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www.ccr.gov

• Most successful HUBZone firms plan for their success– Long-term and revolving strategies that define how to be and remain

competitive– Maintain principal office and 35% employee residency requirements

• Planning is everything

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HUBZone CertificationApplication Process

• STEP 1. Verify eligibility compliance

• STEP 2. Gather what you need (supporting documentation)

• STEP 3. Review sample HUBZone application form

• STEP 4. Review and ask questions

• STEP 5. Access SBA’s General Login System (GLS)

• STEP 6. Complete and submit the online HUBZone application

• STEP 7. Submit requested supporting documentation

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• Firm is a small business by http://www.sba.gov/content/determining-size-standards

• Business is directly owned and controlled by at least 51% U.S. citizens or a community development corporation, an agricultural cooperative, or an Indian tribe

• Firm’s principal office and at least 35% of its employees reside in a designated HUBZone

• Note: Different rules apply for Tribal Governments, Alaska Native Corporations, Community Development Corporations and small agricultural cooperatives

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Learn more…Eligibility Requirements 13-CFR 126

General business information CCR profile

DUNS number Appropriate NAICS codes

Business and personal federal tax returns for the last 3 years

Proof of principal office location, such as lease agreement

Business ownership documentation – articles of incorporation, LLC, etc.

Official payroll records and other information showing employees residing

within HUBZones

Citizen documentation for owners Other information supporting HUBZone eligibility requirements

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CHECKLIST - http://www.sba.gov/sites/default/files/hubzone_request_for_doc.pdf

• Review a sample HUBZone application form (http://www.sba.gov/sites/default/files/files/sample_HUB_Application.pdf)

• Critical Step – do not attempt to complete the actual online HUBZone application until you have reviewed the sample form and gathered all documents you need to complete it

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• You don’t know what you don’t know…• Review HUBZone eligibility requirements, sample application

form and the documentation you gathered and ask questions

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HUBZone Help Desk:

(202) 205-8885

HUBZone@sba.gov

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https://eweb.sba.gov/gls/dsp_addcustomer.cfm?imappsystypnm=8ASDB

• Complete and submit the online HUBZone application

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http://www.sba.gov/content/applying-hubzone-program

• After application is submitted and reviewed, supporting documents will be requested by the SBA

• Documents must be provided to the SBA within two weeks• Requested documents will include:

– Documentation supporting ownership & control and size standards– Business and personal tax returns– Documents showing compliance with HUBZone employment and

principal office requirements

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Checklist of documents needed:http://www.sba.gov/sites/default/files/hubzone_request_for_doc.pdf

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• Application “times-out”• Unable to access the GLS system• 35% of employees are not located within HUBZone areas• Requested supporting documents do not validate information

in the HUBZone application

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Annual assertion of eligibility• Requiring firms to attest in writing under penalty of perjury they remain eligible• Target: All certified firms (except those certified <1 year)

Full document reviews• Collection and review of documentation to verify current eligibility• Target: All certified firms

Contract audits• Collection and review of documentation to verify eligibility at time of contract bid

and/or award• Target: Select certified firms with HUBZone contracts

Site visits• Unannounced visits by Field Operations staff to verify Principal Office criterion• Target: New applicants and select certified firms

Resources and Tools

Success in government contracting is certainly elusive to some firms and clearly realized by others. There are a lot of reasons for this. However, some approaches continuously standout. Consider these: 1.Prepare and maintain an updated and clear contracting strategy that makes sense for your firm

2.Use your CCR profile as your business resume and update it frequently

3.Research agency needs, buying patterns and projections – then aggressively market your company accordingly

4.Update, refine and consistently improve your qualifications statement – this is important

5.Critique past proposals you submitted and seek guidance for improvements

6.Become an expert in using ALL aspects of fedbizopps – you would be surprised at how few firms understand and use this tool to its full capacity

7.Explore aliening your business with GSA and participating in other contracting vehicles, such as multiple award contracts

8.And, most importantly benefit from the wisdom of others – network and cultivate relationships with mentors and contract experts

http://www.sba.gov/content/contracting

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Resources & Tools Resources & Tools

HUBZone Maps http://map.sba.gov/hubzone/maps/

Hubzone Certification http://www.sba.gov/hubzone

SBA NE District Officeswww.sba.gov/NE

Small Business Development Centers (SBDC)http://www.asbdc-us.org/

Sample HUBZone Applicationhttp://www.sba.gov/sites/default/files/files/sample_HUB_Application.pdf

Procurement Technical Assistance Centers (PTAC)http://www.aptac-us.org

SCOREhttp://www.score.org/chapters-map

SBA Size Standardshttp://www.sba.gov/content/am-i-small-business-concern

GLS Registrationhttps://eweb.sba.gov/gls/dsp_addcustomer.cfm?imappsystypnm=8ASDB

Government Contracting 101 Classroom http://www.sba.gov/content/contracting

• Thank you for taking the time to learn about the HUBZone program• Please contact us with any questions you may have:

HUBZone Help Desk(202) 205-8885

HUBZone@sba.gov

SBA Nebraska District Officewww.sba.gov/ne

402-221-4690

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