March 31, 2020

By Jon Williams
Practice Areas: Government Contracts Law and Small Business Programs & Advisory Services

In a webinar on March 25, 2020, officials with SBA’s HUBZone Program showed that SBA understands the unprecedented COVID-19 outbreak has created some unique challenges for HUBZone firms. Fortunately, SBA acted proactively to provide flexibilities to HUBZone firms that are struggling to maintain their principal office location and employees during this challenging time.  Highlights from SBA’s webinar included:

• The new annual recertification process will be voluntary for the remainder of 2020, except for firms that are up for a three-year review this year. If you are not up for a three-year review this year, you have the choice of skipping the annual recertification in 2020. Or, if you prefer, you can request an annual recertification this year. 
• If you do not have an annual recertification in 2020, and you submit a proposal for a HUBZone contract or are protested in connection with a HUBZone contract solicited after December 26, 2019, SBA will judge your HUBZone eligibility as of your most recent three-year recertification (or your initial certification date, if you have not yet gone through a three-year recertification). This means you need to be sure that you were eligible as of your most recent three-year recertification, which could have been a few years ago, as that date will impact your eligibility for HUBZone contracts solicited after December 26, 2019. 

• If you are unsure about your eligibility as of your last three-year recertification date, or your initial certification date, or you would just prefer to go through the annual recertification this year, you can contact SBA to initiate this process. For some firms, it may be better to wait to voluntarily request recertification until after the worst of the COVID-19 outbreak passes, hopefully in the not-too-distant future. However, if you do go through a recertification in the midst of the outbreak, SBA is prepared to show flexibility if your principal office is not staffed or if you have had to lay off personnel due to the virus. In these circumstances, SBA would look at things like where your employees lived and worked prior to the measures you put in place based on COVID-19, whether the measures are temporary, and if the employees will be rehired or return to working in the principal office after the outbreak has passed and your emergency measures are no longer needed. However, SBA will not relax the 35% HUBZone employee threshold (or 20% floor if you are performing on a HUBZone contract).

• If you are not interested in seeking an annual recertification voluntarily, or if you believe you are up for a three-year recertification this year, there is nothing you need to do at this time. You can sit tight and wait for SBA to contact you to initiate the recertification, which could be later this year if you are due for a three-year recertification or it may not be until next year, depending on your situation.

If you have any questions about how to handle your HUBZone eligibility during the COVID-19 outbreak, or about the new HUBZone rules that took effect on December 26, 2019, please do not hesitate to contact Jon Williams, the author of this blog, at jwilliams@pilieromazza.com. We also invite you to visit PilieroMazza’s COVID-19 Client Resource Center for information and resources to assist businesses during this difficult time.