The HUBZone Empowerment Contracting program was enacted into law as part of the Small Business Reauthorization Act of 1997. The program falls under the auspices of the US Small Business Administration. The program encourages economic development in historically underutilized business zones - "HUBZones" - through the establishment of preferences.

The HUBZone Empowerment Contracting Program stimulates economic development and creates jobs in urban and rural communities by providing federal contracting preferences to small businesses. These preferences go to small businesses that obtain HUBZone (Historically Underutilized Business Zone) certification.

A firm is qualified as a "HUBZone Business" if the following conditions are met:

• The business is small
• The business is located in a "Historically Underutilized Business Zone" (HUBZone)
• The business is owned and controlled by one or more U.S. Citizens
• At least 35% of the business' employees reside in a HUBZone.
  
  

There are four types of HUBZone contract opportunities:

1. Competitive: Contracts can be set-aside for HUBZone competition when the contracting officer has a reasonable expectation that at least two qualified HUBZone small business concerns (SBCs) will submit offers and that the contract will be awarded at a fair market price.
2. Sole-source: HUBZone contracts can be awarded if the contracting officer determines that: only one qualified HUBZone SBC is responsible to perform the contract, two or more qualified HUBZone SBCs are not likely to submit offers and the anticipated award price of the proposed contract, including options, will not exceed:
   • $5 million for a requirement within the North American Industry Classification System (NAICS) code for manufacturing or
   • $3 million for a requirement within all other NAICS codes
3. Full and open: These competitive contracts can be awarded with a price evaluation preference. The offer of the HUBZone small business must not be 10 percent higher than the offer of a non-small business.
4. Subcontracting: All subcontracting plans for large business Federal contractors must include a HUBZone subcontracting goal.

Other Specialized Assistance:

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

The HUBZone Empowerment Contracting Program is administered by a staff in Washington, D.C. in cooperation with field staff located in SBA District Offices around the country.

Please see the HUBZone website for more information.