CHANGES TO THE HUBZONE PROGRAM ARE HERE
Freezing the HUBZone maps until 2020 and then update the maps every 5 years
This will allow a HUBZone-certified company to rely on having a compliant business location until after 2020, and then the maps will be updated every 5 years.
HUBZone employees (as long as they maintain residence) are qualified until after 2020.
SBA regulations also allow HUBZone companies up to three additional years to move to a new HUBZone location if the Census Tract/HUBZone loses its designation, so the HUBZone firm and its employees effectively have until 2023 or later to enjoy HUBZone certification without having to move.
With the maps being updated every 5 years and the redesignation period being 3 years, that’s eight total years – almost as long as the 8(a) certification, which is nine years. And if you’re an 8(a) firm, now you have two certifications. That will increase a company’s federal contracting opportunities.
Amend “35% rule” regarding mixture of HUBZone/Non-HUBZone employees.
Under the new regulations an employee must reside in a qualified HUBZone for a specific and uninterrupted period of time and be hired by a HUBZone firm before the employee will count towards the 35% mix of HUBZone/Non-HUBZone employees. After that period of continuous residence in a qualified HUBZone, the employee will always count as a HUBZone employee for that HUBZone firm as long as he/she remains employed by the HUBZone firm, even if the employee moves to a non-HUBZone area or the employee’s residence loses its HUBZone status.
This is meant to address the problem with the current rules, which incentivize a HUBZone firm to fire an employee because he or she moves to a non-HUBZone location or their residence loses its HUBZone status.
Fix the eligibility requirement for awards.
SBA has changed the existing requirement that a HUBZone company must be compliant at the time of bid and also at the time of award. The government can take months if not years to award a contract. A firm cannot possibly know when the government will award a contract, and therefore cannot know whether it will be compliant at the time of award. SBA’s new rule requires that a company only needs to be certified/recertified once a year and will not need to prove compliance at the date of bid or at the time of award.
This will allow a company to bid and win as much business as they can during a given year.
If the company is determined non-compliant by its annual recertification date, it must bring itself into compliance before continuing in the HUBZone program. However, its performance on contracts won in the previously compliant year will not be adversely affected.
ATTEMPT TO MAINTAIN
For compliance purposes, HUBZone firms must maintain at least 20% HUBZone residents as employees when performing on HUBZone contracts, or SBA will propose the firm for decertification. HUBZone firms have an affirmative duty to notify SBA if they fall below the 20% attempt to maintain the standard.
When a company buys an office located in a HUBZone or enters into a long-term, 10-year lease for such office space, intending the space to be its principal office, the concern will be able to meet the principal office HUBZone criterion for a period of at least 10 years—even if at some point after the property is purchased or leased, the office location no longer qualifies as a HUBZone. The idea behind this rule is that the HUBZone program should incentivize and reward companies that invest in HUBZones.