Benefits of HUBZone Program

April 13, 2006

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There are four types of contract benefits that a HUBZone certified business can qualify for:

A competitive HUBZone contract can be awarded if the Contracting Officer has 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.
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 $5 million for manufacturing purchases or $3 million for all other requirements.
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 percent higher than that of the non-HUBZone business.
A subcontract could be awarded by a large prime contractor. Federal rules require these contractors to include HUBZone contracting goals.

In addition to the contract benefits, certified HUBZone firms can qualify for higher SBA-guaranteed surety bonds on construction and service contract bids. Firms in Empowerment Zones and Enterprise Communities (EZ/EC) can also benefit from employer tax credits, tax-free facility bonds, and investment tax deductions.