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Big Changes Are Coming for SBA's HUBZone Program

October 31, 2018

For the first time in 20 years, SBA is proposing an extensive overhaul of its regulations for the HUBZone program. SBA recognizes the difficulty firms face getting into and staying in the HUBZone program, so they are revising the HUBZone rules to provide greater certainty to HUBZone applicants and participants. The proposed rule would reduce the regulatory burdens imposed on HUBZone small business concerns and on government agencies by eliminating ambiguities in the regulations and making it easier for HUBZone firms to understand and comply with the program requirements. This is welcome news for HUBZone firms as well as federal agencies and prime contractors that have struggled to meet their HUBZone spending goals.

There are several big changes in the proposed rule. First, it would allow HUBZone employees to move out of a HUBZone area but remain HUBZone employees for eligibility purposes as long as they (1) qualify as HUBZone employees and work for the firm at the time of certification or recertification and (2) continue to work uninterrupted for the same HUBZone firm. This means that HUBZone firms would be allowed to count these employees as long as they continue working for the company, even if they move and no longer live in a HUBZone.

The second big change is the proposal to eliminate the requirement that HUBZone firms certify their HUBZone status as of the bid and award dates for HUBZone contracts. In lieu of this requirement, SBA proposes to require annual recertification. This would make it much easier for HUBZone firms to determine compliance in their bidding decisions. It has always been very challenging for HUBZone firms to predict compliance, particularly on the date of award, which is difficult to know in advance. If the proposed rule is adopted, firms will have greater certainty because they will only need to be eligible as of their annual recertification date, meaning they will be eligible to bid on and receive awards for any HUBZone contract throughout the year that follows the recertification date. CONTINUED

Don’t undermine the goals of small business contracting.

Of late, it seems the federal government’s small business programs have been under attack with fallacies and false narratives, despite having been proved untrue time and time again. Perhaps this is not surprising given the more recent success of the programs. Over the previous eight-year term, the federal government provided an unprecedented commitment to small business programs, which resulted in more federal procurement dollars going to small businesses. In fact, over $90 billion annually went to small and disadvantaged firms and the government met federally mandated small business goals, which either had never been achieved or had not been met for almost a decade. CONTINUED 

Marketing Your Small Business for Sole Source Awards

The federal government is increasingly using nontraditional ways to spend its money, such as purchasing goods and services through “other transaction authority,” which we recently wrote about and which does not require traditional competitive award procedures. Another alternative to traditional procurement by competition is a sole source award, and we are seeing more and more of our clients pursuing sole source awards or, in other cases, challenging the award of sole source contracts to other firms. If you are a small business, there are a number of ways your firm can be awarded a sole source award, including awards under various small business programs. You should be aware that these opportunities exist, so you can be ready to market your company and put it in the best position to receive a sole source award.  CONTINUED

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