# Presentation: 011849

## SBA Contracting Assistance Programs

- 8(a) Business Development Program
- HUBZone Program
- Small Disadvantaged Business Program

**Federal Government Contracting Assistance**

**Notes:**
A small business owner classified as socially and economically disadvantaged, or where the principal place of business is located in a distressed area, can turn to the SBA to obtain in-depth business advice and assistance in order to become more competitive in obtaining federal government contracts.  SBA’s contracting assistance programs are intended to help small businesses to be successful for the future.  These companies, just starting or in a growth stage, can benefit from the wide-range of services we offer.

## SBA’s 8(a)BusinessDevelopmentProgram

**Federal Government Contracting Assistance**

**Notes:**
The new and improved 8(a) Business Development Program has become an essential instrument for helping socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. Our task is to teach 8(a) and other small companies how to compete in the federal contracting arena and how to take advantage of greater subcontracting opportunities available from large firms as the result of public-private partnerships.  The SBA has helped thousands of aspiring entrepreneurs gain a foothold in obtaining federal contracts.

## 8(a) BD Program Objectives

- (Sec. 204 of Public Law 100-656)
- “to promote the business development of small business concerns owned and controlled by socially and economically disadvantaged individuals...”

**Federal Government Contracting Assistance**

**Notes:**
The overall goal of the 8(a) Business Development Program is to graduate companies that will thrive in a competitive business environment.  To achieve this, SBA district offices monitor and measure the progress of participants through annual reviews, business planning and systematic evaluations.  Participants receive specialized business training, counseling, marketing assistance and high-level executive development.  Through this program, we are building community-based small businesses, which in turn revitalizes neighborhoods, creates jobs, and encourages economic growth.

## Term of ParticipationStart Date is Date of Approval

-    Year	1
- 		2				**developmental**
- 		3				        **stage****	**
- 		4
-    Year	5
- 		6				**transitional**
- 		7				      **stage**
- 		8
- 		9
-       Continuation in the program is dependent on the firm’s continuing eligibility as a socially and economically disadvantaged owned/operated firm and continued compliance with the 8(a)BD participation agreement.

**Federal Government Contracting Assistance**

**Notes:**
A company’s participation in 8(a) is divided into two phases spanning nine years.  A four year developmental stage is designed to help the firms overcome their economic disadvantage by providing business development assistance.  The five year transitional stage is designed to help participants overcome the remaining effects of economic disadvantage and to prepare them for leaving the program. A firm that completes its nine year term is deemed to graduate from the program.  The nine year program term maybe shortened only by termination, early graduation or voluntary graduation.

## Personal Eligibility Criteria

- Social Disadvantage
- Economic Disadvantage

**Federal Government Contracting Assistance**

**Notes:**
Generally, a business concern meets the basic requirements for admission to the 8(a) Business Development Program if it is a small business which is unconditionally owned and controlled by one or more socially and economically disadvantaged individuals.  The principals of the business are of good character, citizens of the United States, and can demonstrate potential for success.

## Social Disadvantage

- Subjected to racial or ethnic prejudice or culture bias because of their identities as member of groups, without regard to individual qualities.

**Federal Government Contracting Assistance**

**Notes:**
Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudices or cultural bias within American society because of their identities as members of groups and without regard to their individual qualities.  The social disadvantage must stem from circumstances beyond their control.  In the absence of evidence to the contrary, individuals who are members of the designated groups are presumed to be socially disadvantaged. 

## Socially Disadvantaged Determinants

- Individuals are presumed to be socially disadvantaged if they are a U.S. Citizen and a member of one of the following groups:
- Black American
- Asian Pacific American
- Hispanic American (*includes individuals of  Spanish & Portuguese descent*).
- Native American
- Subcontinent Asian American

**Federal Government Contracting Assistance**

**Notes:**
There is a reputable presumption that because of their identity, certain groups are presumed to be socially disadvantaged.  These groups are African Americans, Hispanic Americans, Native Americans, Asian Pacific Americans and Subcontinent Asian Americans.  Being born in a country does not, by itself, suffice to make the birth country an individual’s country of origin for purposes of being included within a designated group. If the SBA requires it, an individual must demonstrate that he or she has held himself or herself out, and is currently identified by others as a member of a designated group.

## Requirements for Persons Not Members of Designated Group

- Establish their case by a preponderance of the evidence;
- The disadvantage may stem from race, ethnic origin, gender, physical handicap, long term environmental isolation, or other similar causes;
- The applicant must have personally suffered          disadvantage in the United States;
- The disadvantage must be substantial & chronic;
- The discrimination must have negatively impacted                 on business advancement .

**Federal Government Contracting Assistance**

**Notes:**
An individual who is not a member of a designated group must establish social disadvantage on the basis of a “preponderance of evidence”.  They must show through a preponderance of evidence that they are socially disadvantaged due to race, ethnicity, gender, physical handicap, or residence in an environment isolated from the mainstream of American society.  Generally, preponderance is evidence of quality and quantity which leads the decision maker to conclude, objectively, that the existence or truth of the facts asserted is more probable than not.

## Non-Members of Designated Groups

- Substantial & chronic;
- Discrimination must have negatively impacted on business advancement .

**Federal Government Contracting Assistance**

**Notes:**
For members of non-designated groups to meet the burden of proof element for social disadvantaged status, an individual must show documentary evidence which corroborates or supports assertions made regarding specific incidents or a pattern of discrimination. An individual must outline personal experiences which occurred in American society, not in other countries, and must have been substantial and chronic.  Of these, there must be at least one objective distinguishing feature that has contributed to social disadvantage, or other similar causes not common to individuals who are not socially disadvantaged.

## Types of Evidence for Preponderance

- Documentary evidence which corroborates or supports assertions made by an applicant such as:

- Personnel Records			• Payroll Records
-  Rejection letters on job applications.	•Financial statements.
-  Denials of credit applications.
-  Documents relating to rejected contract offers, i.e., bid abstracts,           	solicitations.
-  Contemporaneous records memorializing meetings, conversations,       	negotiations, telephone calls, etc.
-  Documents setting forth company policy(ies) which are alleged to be 	discriminatory.

**Federal Government Contracting Assistance**

**Notes:**
SBA will consider any relevant evidence in assessing this element.  In each case, however, SBA will consider the experience of the individual, where applicable, in education, employment, and business history to determine whether the totality of the circumstances shows a disadvantage in entering into or advancing in the business world.  The failure to establish disadvantage in any one or two areas does not prevent an applicant from meeting the negative impact requirement as long as the totality of the circumstances experienced by the individual demonstrates such disadvantage.

## Net Worth Criterion:After excluding the individual’s equity in the firm and equity in the primary residence, net worth may not exceed $250,000.00

**Net Worth Criterion:**After excluding the individual’s equity in the firm and equity in the primary residence, net worth may not exceed $250,000.00

- 		Net Worth
- less		equity in primary residence
- less		_equity in business _
**=**		adjusted net worth                 	 		(*which cannot exceed $250,000*)

**Federal Government Contracting Assistance**

**Notes:**
For initial 8(A) Business Development eligibility, the net worth of an individual claiming disadvantage must be less than $250,000.  In determining such net worth, SBA will exclude the ownership interest in the applicant business and the equity in the primary personal residence.  SBA will also consider the individual’s average two-year income, fair market value of all assets, access to credit and capital, as well as the financial condition of the applicant.

## Economically Disadvantaged 

- Individuals are socially disadvantaged persons whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit.

**Federal Government Contracting Assistance**

**Notes:**
Each individual claiming economic disadvantage must describe it in a narrative statement, and must submit personal financial information.  In considering diminished capital and credit opportunities, SBA will examine factors relating to the personal financial condition of the applicant compared to the financial profiles of small businesses in the same primary industry classification which are not owned and controlled by socially and economically disadvantaged individuals.  

## Business Eligibility Criteria

- Control and Management
- Size
- Potential for Success
- Good Character

**Federal Government Contracting Assistance**

**Business Eligibility Criteria**

**Notes:**
In determining the eligibility of  a business concern,  SBA must ascertain that the applicant firm meet program guidelines.  Certified companies must show that the concern is owed and control by socially and economically disadvantaged individuals.  In addition, the concern must meet SBA guidelines for size determination as well as demonstrate that they have a reasonable potential for success. The applicant and all its principals must have good character. 

## What Determines Ownership?

- At least 51% unconditional ownership by the disadvantaged person(s).
- Partnerships:   Agreements must reflect unconditional ownership.
- Limited Liability Company:  Disadvantaged individuals must own at least 51% of each class of member interest.

**Federal Government Contracting Assistance**

**Notes:**
SBA requires that at least 51 percent of the applicant firm is directly and unconditionally owned by one or more socially and economically disadvantaged individuals who are citizens of the United States.   An applicant concern owned principally by another business entity or by a trust that is in turn owned and controlled by one or more disadvantaged individuals does not meet SBA’s ownership requirement.  However, ownership by a trust, such as a living trust, may be considered the functional equivalent of direct ownership if the trust is revocable, and the disadvantaged individual is the grantor, trustee and the sole current beneficiary of the trust.  

## Corporate Ownership Determination

- Corporations:
- Disadvantaged persons must own at least 51% of each class of voting stock and at least 51% of all outstanding stock.
- Stock option plans for nondisadvantaged individuals will be viewed as if they have been exercised .

**Federal Government Contracting Assistance**

**Notes:**
When a concern is a corporation, at least 51 percent of each class of voting stock outstanding and 51 percent of the aggregate of all stock outstanding must be unconditionally owned by one or more individuals determined by SBA to be socially and economically disadvantaged. SBA will disregard any unexercised stock options or similar agreements held by disadvantaged individuals.  However, if held by non-disadvantaged individuals, they will be treated as exercised, except for any ownership interest which are held by investment companies licensed under the Small Business Investment Act of 1958.

## Control and Management Determination

- Partnerships:   Agreements must reflect unconditional management by disadvantaged partner(s)
- Limited Liability Company:  One or more disadvantaged individuals must serve as management members with unconditional control.

**Federal Government Contracting Assistance**

**Notes:**
SBA does not view control the same as ownership although both control and ownership may reside in the same person. Control includes both strategic policy setting and the day-to-day management and administration of business operations by disadvantaged individuals.  They must have managerial experience of the extent and complexity needed to run the business.  While the disadvantaged individual need not have technical expertise or possess a required license, they must have ultimate managerial and supervisory control.

##  Corporate Control and Management Determinants

- Corporations:
- Disadvantaged directors of the board must control the board by actual number of votes and must be able to establish a quorum without the presence of non-disadvantaged directors.

**Federal Government Contracting Assistance**

**Notes:**
One or more disadvantaged individuals must control the Board of Directors of a corporate applicant.  SBA will deem control if a single disadvantaged individual owns 100 percent of all voting stock; or a single disadvantaged individual owns at least 51 percent of all voting stock, is on the Board of Directors and no super majority voting requirements exists; or more than one disadvantaged shareholder seeks to qualify the concern, and each is a member of the Board of Directors, and together they own at least 51 percent of all voting stock and no super majority voting requirements exist.

## Disadvantaged Individual must:

- Hold the position of President or Chief Executive Officer, Managing Partner or LLC Managing Member
- Be the highest compensated individual
- Have the ability to Hire and Fire
- Set Policies
- Have the ability to commit firm to contracts
- Have the ability to the control Budget and Financial Disbursement

**Federal Government Contracting Assistance**

**Notes:**
Non-disadvantaged individuals may be involved in the management of an applicant firm, as stockholders, limited liability members, partners, directors, and/or officers.  However, no such non-disadvantaged individual may exercise actual control or have the power to control the firm; be a former employer or principal of a former employer of any disadvantaged owner of the firm; and receive compensation from the firm in any form that exceeds the compensation of the highest officer.  If any of these situations exist, the non-disadvantaged individual will be found to control the firm.

## Size Determinants

- Firms Must be Small Based on Their Primary SIC Code, Including Affiliates
- Size is determined either by:
-  **average 3 years revenues**
-  **# of employees** (manufacturers, dealers, wholesalers)
- See 13 CFR 121 Size Regulations or visit our website: _**www.sba.gov/size**_

**Federal Government Contracting Assistance**

**Notes:**
SBA defines a small business as one that is independently owned and operated, is organized for profit, and is not dominant in its field.  Depending on the industry, size standard eligibility is based on the average number of employee for the preceding twelve months or on sales volume averaged over a three year period.  If SBA determines that a applicant may not qualify as small, they may deny an application for 8(a) Business Development Program admission.  

## Factors Considered for Potential Success

- Factors considered:
- Proof of **two years** operation in the firm’s primary industry as verified by revenues reported in **business tax returns**.
**Financial capability**:  sufficient capitalization, financial performance, bonding capacity, manageable debts.
**Managerial and Technical capability**:  performance on previous contracts, firm has the necessary personnel, licenses, certifications, facilities, prior experience.

**Federal Government Contracting Assistance**

**Notes:**
The applicant concern must possess reasonable prospects for success in competing in the private sector if admitted to the 8(a) Business Development Program.  To do so, it must be in business in its primary industry classification for at least two full years immediately prior to the date of its 8(A) Business Development application, unless a waiver for this requirement is granted.  Income tax returns for each of the two previous tax years must show operating revenues in the primary industry in which the applicant is seeking 8(A) certification.

## Other Factors Consideredfor Potential Success

- Management capability:  Education, experience and training of CEO and other managers, magnitude and complexity of past/current jobs, management systems.
- Qualifications for ability to perform on Federal contracts:  relevant contracting experience and the  ability to meet Federal procurement policies.

**Federal Government Contracting Assistance**

**Notes:**
In addition, SBA will evaluate the firm’s financial capacity, the technical and managerial experience of the firm’s managers, the firm’s operating history, the ability of the firm to access credit and capital, and the firm’s record of performance on contracts.  Also considered is whether the applicant or individuals employed by the firm hold the requisite licenses or if the firm is engaged in an industry requiring professional licensing.

## Conditions for Waivingthe Two-Year Rule

- The individual or individuals upon whom eligibility is to be based have substantial and demonstrated business management experience;
- The applicant has demonstrated technical expertise to carry out its business plan with a substantial likelihood for success if admitted to the 8(a) BD Program;
- The applicant has adequate capital to carry out its business plan as a Participant;

**Federal Government Contracting Assistance**

**Notes:**
A small business may apply for participation in the 8(A) Business Development Program if it has not been in business for two years.  SBA may waive this requirement if the individuals upon whom eligibility is based have substantial business management experience; can demonstrate the technical expertise to carry out its business plan with a prospective likelihood of success; and have adequate capital to sustain its operations and carry out its business plan as a participant.  

## Other Conditions for Waiving the Two-Year Rule

- The applicant has a record of successful performance on contracts from governmental and nongovernmental sources in the primary industry category;
- The applicant has, or can demonstrate its ability to timely obtain the personnel, facilities, equipment, and any other requirements needed to perform such contracts as a Participant.

**Federal Government Contracting Assistance**

**Notes:**
 The applicant firm must have a record of successful performance on contracts from governmental or non-governmental sources in its primary industry classification; and the applicant has, or can demonstrate its ability to timely obtain the personnel, facilities, equipment, and any other requirements needed to perform on contracts if it is admitted to the 8(a) program.  The concern seeking a waiver must also provide information on government and non-governmental contracts in progress and completed to establish successful contract performance.

## Ineligible Business Factors

- Ineligible businesses:  brokers; debarred or suspended persons or concerns; nonprofit organizations.  Franchises may be allowed contingent upon SBA review of the franchise agreement.
- A business may participate only once.  Even if ownership and control has completely changed, firm may not re-apply.
- Any person who has used his/her disadvantaged status to qualify another firm shall be regarded as non disadvantaged.

**Federal Government Contracting Assistance**

**Notes:**
In the 8(a) program, the SBA has determined that a broker adds no material value to an item supplied to a procuring activity, does not take ownership or possession, and does not handle the item with its own equipment or facilities, that therefore brokers are ineligible for the program. However, franchises may be allowed contingent upon the results of a SBA review. 
Also, once a concern or disadvantaged individual upon whom eligibility was based has participated in the 8(a) Business Development program, neither the concern nor that individual will be eligible again. 

## Benefits of Participation

- Sole Source Contracts:
- Up to $3 million for services and construction and $5 million for manufacturing.
- Competitive threshold:
- When the estimated value (including options) exceeds $3 million for services and construction and $5 million for manufacturing, requirement will be competed among 8(a)BD firms.
- Federal Acquisition Regulations (FAR):
- Apply to and govern 8(a)BD contracts.

**Federal Government Contracting Assistance**

**Notes:**
8(a) participants can receive sole-source contracts, up to a ceiling of $3 million for goods and services and $5 million for manufacturing.  While SBA helps 8(a) firms build their competitive and institutional know-how, the agency also encourages them to participate in competitive acquisitions.  Federal acquisition policies encourage Federal agencies to award certain percentages of their contracts to small disadvantaged businesses. Recent changes permit 8(a) firms to form joint ventures and teams to bid on contracts.  This enhances their ability to perform larger prime contracts.   

## Filing Applications

- Applications for the 8(a)BD program are filed with the Division of Program Certification & Eligibility (DPCE) Unit that services the Federal Region containing your state.For assistance in determining your Federal Region, contact the SBA District Office servicing your locality or state.

**Federal Government Contracting Assistance**

**Notes:**
The Regional Division of Program Certification and Eligibility has 15 days to review an application for completeness.  If the application is incomplete, the applicant will have 15 days to provide additional information.  If the DPCE determines the application is complete, a final decision regarding 8(a) Business Development Program eligibility will be made within 90 days.  The SBA District Office can provide information and guidance in the completion of the 8(a) application.  

## Philadelphia DPCE - Regions 1 & 3900 Market Street, 5th FloorPhiladelphia, PA  19107(215) 580-2779 Dallas DPCE - Regions 5, 6 & 7 4300 Amon Carter Blvd, Suite 116Ft. Worth , TX  76155(817) 684-5315 San Francisco DPCE - Regions 2, 4, 8, 9 & 10455 Market Street, 6th FloorSan Francisco, CA  94105(415) 744-0328

**Processing Centers**

**Federal Government Contracting Assistance**

**Notes:**
An application for 8(a) Business Development program admission must be filed with the SBA DPCE field office servicing the territory in which the principal place of business is located.  The appropriate office will receive, review for completeness, and evaluate based on eligibility criteria.  It will then be forwarded to SBA Headquarters in Washington, DC for a final determination to approve or deny program participation.   

## Expectations of Program Participants

- Self marketing to federal procurement agencies.
- Submission and annual update of business plan.
- Access to company records by SBA.
- Informing SBA of any changes affecting 8(a)BD eligibility, i.e. changes in business structure, ownership, etc.

**Federal Government Contracting Assistance**

**Notes:**
Once certified by the SBA , applicants will need to market their firms.  Marketing to the government requires essentially the same skills and techniques that are necessary for effective marketing to the private sector. 
SBA District Offices monitor and measure the progress of program participants.  In order for a concern to remain eligible for 8(a) program participation, it must submit a certification that there have been no changed circumstances which would adversely affect the participant’s eligibility as well as submits documents to support this requirement. 

## Additional Expectationsof Program Participants

- Submission of year end financial statements and annual tax returns.
- Participation in business development training opportunities and networking offered by SBA.
- Staying current in financial obligations to the Federal Government.

**Federal Government Contracting Assistance**

**Notes:**
When a Participant fails to provide required documentation for annual review, SBA may initiate termination proceedings. Termination is used to refer to  a participants exit from the 8(a) Business Development prior to the expiration of its program term for good cause.

## Small Disadvantaged Business  (SDB)Program

**Federal Government Contracting Assistance**

**Small Disadvantaged Business **** (SDB)Program**

**Notes:**
The SBA administers two particular business assistance programs for small disadvantaged businesses. (SDBs) These programs are the 8(a) Business Development Program and the Small Disadvantaged Business Certification Program.  While the 8(a) Program offers a broad scope of assistance to socially and economically disadvantaged firms, the SDB certification strictly pertains to benefits in federal procurement.  8(a) firms automatically qualify for SDB certification.

## Purpose for SDB Certification 

- Reform the SDB certification process
- Ensure that only eligible firms receive SDB program benefits
- Establish a formal process at the front end to determine SDB eligibility
- No longer rely on firms’ self-certification

**Federal Government Contracting Assistance**

**Notes:**
Under new federal procurement regulations, the SBA certifies small disadvantaged businesses for participation in federal procurements aimed at overcoming the effects of discrimination. The new guidelines are designed to ensure that benefits used in the federal procurement program are fair and effective, and conform with the U. S. Supreme Court’s 1995 Adarand court decision. SBA certifies small businesses that meet specific social, economic, ownership, and control eligibility criteria.

## SDB Program Benefits

- When competing for government contracts, SDBs in industries that show the ongoing effects of discrimination will be able to:
- participate in Federal SDB price evaluation adjustments (up to 10%)
- other evaluation factors or sub-factors
- Set-aside programs

**Federal Government Contracting Assistance**

**Notes:**
Under the government’s reformed affirmative action rules, small disadvantaged businesses are eligible for price evaluation adjustments of up to 10 percent when bidding on federal contracts in certain industries. The price evaluation credits are authorized in industry categories where the US Department of Commerce has determined that Small Disadvantaged Businesses are underrepresented because of the effects of ongoing discrimination.  The program also provides evaluation credits for prime contractors who achieve Small Disadvantaged Business subcontracting targets. 

## Other SDB Program Benefits

- Subcontracting opportunities as authorized under SBA’s section 8(d) subcontracting program.
- Remain on the SBA maintained list of certified SDBs for a period of three years from the date of certification.

**Federal Government Contracting Assistance**

**Notes:**
SBA certifies Small Disadvantaged Businesses to make them eligible for special bidding benefits.  Evaluation credits available to prime contractors boost subcontracting opportunities for Small Disadvantaged Businesses. Once SBA has certified a firm, it will be added to a on-line registry of small disadvantaged business-certified firms maintained in Pro-Net.  Certified firms remain on the list for three years.  Contracting Officers and large business prime contractors may search this on-line registry for potential suppliers.

## When Price Evaluation Applies

-  In competitive acquisitions
-  Shall not be used in acquisitions that-
- - Are not greater than the acquisition threshold
-      - Are awarded pursuant to the 8(a) program
-      - Are set aside for small business concerns.

**Federal Government Contracting Assistance**

**When Price Evaluation Applies**

**Notes:**
Small Disadvantaged Businesses that bid as prime contractors in competitive acquisitions over the simplified  acquisition threshold are  eligible to receive price evaluation adjustments  in industry categories where the U.S. Department of Commerce has determined that  under-representation  exist.  However, the price evaluation adjustment does not apply to procurements that are below the simplified acquisition threshold of $100,000; or procurements that are set aside for small businesses; or procurements under the SBA 8(a) Business Development Program.

## SBA’s Role

- Certify all qualified concerns requesting SDB certification
- Decide protests and appeals
- Maintain a national public on-line registry of certified SDBs for access by contracting officers and the general public

**Federal Government Contracting Assistance**

**Notes:**
Under new federal procurement regulations, SBA has been charged with administering procedures by which a firm can apply to be recognized as a  small disadvantaged business. The SBA determines whether a particular concern qualifies as a small disadvantaged business in response to a protest challenging the concern’s status. The agency maintains a national on-line registry of certified firms, and executes contracts or agreements with organizations or business concerns that become private certifiers. 

## SBA Field Offices

- Provide information and required application forms to any firm interested in SDB certification

**Federal Government Contracting Assistance**

**Notes:**
SBA Field Offices provide information on the eligibility criteria and guidance in the  application process for all SBA procurement programs as well as other agency programs.  Staff members respond to requests for information and offer classes and workshops that outline program elements.  Individuals may elect to download an application for the small disadvantaged business certification program or contact the SBA in their area for a paper copy. 

## SDB Certification Process

- Applications must be submitted to SBA
- Applicants notified in 15 days whether the application is complete and suitable for evaluation
- Ownership and control decision within 30 days of receipt of a complete application package

**Federal Government Contracting Assistance**

**Notes:**
Individuals should forward their applications to SBA or contact a private certifier in their local area.  SBA will advise each applicant generally within 15 days after after the receipt of a application  if the application is complete and suitable for evaluations or if not, what additional information or clarification is required. SBA or a Private Certifier will determine whether the those individuals claiming disadvantaged status own and control the firm and then render a decision on status within 30 days.  SBA will issue a decision regarding certification within 60 days.

## SDB Application

- SBA Form 1010
- SBA Form 413
- IRS Form 4506

**Federal Government Contracting Assistance**

**Notes:**
Each firm seeking to be certified as an small disadvantaged business must submit those forms and attachments required by SBA when applying for admission to the 8(a) Business Development program.  These forms and attachments may include, but are not limited to, financial statements, Federal personal and business tax returns and personal history statements. Necessary forms will  include a business eligibility statement for the business equity type. The application package may be in the form of an electronic application.  

## Reapplying for SDB Certification

- Firms may reapply 12 months after final decision of SBA to decline its application
- If it is determined that the firm is not owned and controlled by individual(s) claiming disadvantaged status and no appeal is filed with SBA’s Office of Hearings and Appeals, a firm may apply for a new ownership and control determination at any time

**Federal Government Contracting Assistance**

**Notes:**
A concern which has been denied small disadvantaged business certification may reapply for certification at any time 12 months or more after the date of the most recent final decision of SBA to decline its application.   A concern which received a decision that it was not owned and controlled by the individuals claiming disadvantaged status from a Private Certifier and does not appeal that decision to SBA’s Office of Hearings and Appeals, may apply for a new ownership and control determination at any time.

## Develops historically underutilized urban and rural areas
Establishes federal award preferences for small businesses
Lists qualified businesses on PRO-Net®
Information is available at www.sba.gov/hubzone

- Develops historically underutilized urban and rural areas
- Establishes federal award preferences for small businesses
- Lists qualified businesses on PRO-*Net*®
- Information is available at _**www.sba.gov/hubzone**_

**HUBZones** *(Historically Underutilized Business Zone Program)*

**Federal Government Contracting Assistance**

**Notes:**
The Historically Underutilized Business Zone  or HUBZone program provides a new method of establishing federal award preferences for small businesses. The program is designed to help develop these historically underutilized urban and rural areas. Lists for qualified business under the HUBZone program can be found on PRO-Net. More information and locations of HUBZones can be found at www.sba.gov/hubzone or by calling the SBA District Office.

## The HUBZone Empowerment Contracting Program 

- Community Based:
- Empowerment
- Employment
- Enterprise

**Federal Government Contracting Assistance**

**Notes:**
SBA has made a strategic commitment to opening doors of economic opportunity for all Americans.  With innovative programs like the HUBZone Empowerment Contracting emphasis, we will be able to open those doors wider than ever before.
The HUBZone program is an exciting new initiative designed to stimulate economic development by providing federal contracting opportunities to qualified small business concerns located in historically underutilized business zones.  This effort will increase employment opportunities, investment, and economic development in eligible areas.

## Purpose of the HUBZone Program

- Provide federal contracting assistance for qualified small business concerns located in historically underutilized business zones to:
- Increase employment opportunities
- Stimulate capital investment in those areas
- Empower communities through economic leveraging and the “multiplier effect”

**Federal Government Contracting Assistance**

**Notes:**
The HUBZone Empowerment Contracting Program is a “place-based” federal contracting opportunity serving new market communities with low income or high unemployment.  The program provides both federal prime contract and subcontract benefits.  With the goal of bringing job opportunities and capital investment to underutilized areas, this program will serve as a vital tool to empower distressed areas, build sustainable communities, and promote long-term economic development and growth.

## Qualified Areas  

- Qualified Census Tracts (HUD) - 7,000
- Qualified Non-metropolitan Counties - 900
- Median household income is less than 80% of the non-metropolitan state median household income (Census)
- Unemployment rate that is not less than 140% of the state-wide average unemployment rate (BLS)
- Indian reservations (external boundary)

**Federal Government Contracting Assistance**

**Notes:**
Eligible areas cover more than 7,000 urban census tracts, 900 rural areas, and every federally recognized Native American Reservation.  A “HUBZone” area is classified as either a “census tract” as defined by the Internal Revenue Service Code of 1986; a “non-metropolitan county” with a median household income of less than 80 percent of the State median income or with an unemployment rate of not less than 140 percent of the statewide average, based on U.S. Department of Labor recent data; or lands within the boundaries of federally recognized Indian Reservations.

## Goaling 

- Based upon a percentage of the total value of  federal prime contract awards
- 1999 	- 1%
- 2000 	- 1.5%
- 2001	- 2%
- 2002 	- 2.5%
- 2003 	- 3%  and each year thereafter

**Federal Government Contracting Assistance**

**Notes:**
The federal government purchases about $200 billion worth of goods and services annually.  Congress has set a goal of 3 percent of the total value of all prime contracts for HUBZone contracting opportunities, phased in over five years.  The program’s goal in FY 99 was 1 percent, or roughly $2 billion reserved for HUBZone small businesses.  The goal increases in each subsequent year to almost $6 billion or 3 percent in FY 2003.

## Requirements to be a Qualified HUBZone SBC

- Four Requirements
- Must be a small business
- Concern must be owned and controlled only by U.S. citizens
- The principal office of the concern must be located in a HUBZone; and
- At least 35% of the concern’s employees
- 	 must reside in a HUBZone

**Federal Government Contracting Assistance**

**Notes:**
Only companies certified by SBA are eligible to participate in the HUBZone Program.  To qualify for the program, a small business must be owned and controlled by one or more U. S. citizens; the company’s principal office must be located within a qualified area; and at least 35 percent of the company’s employees must be HUBZone residents. To fulfill this requirement, employees must live in a residence within that area for at least 180 days or be a currently registered voter.  In addition, existing businesses that choose to move to qualified areas are eligible.

## The Certification Process 

- Fully electronic, Internet-based
- Integrated with Pro-Net
- SBA will not process incomplete packages
- Processing time - 30 days
- SBA may request additional information or clarification any time after submission
- SBA’s decision will be in writing

**Federal Government Contracting Assistance**

**Notes:**
To apply, companies are encouraged to use the electronic application directly on the HUBZone web site.  This will speed up the processing and help ensure that your firm can begin participating in the program in less time.  Applicants can also download a paper version and submit it directly to the SBA headquarters in Washington, DC.  SBA will consider the information provided to determine whether the business qualifies.  If SBA determines that the concern is qualified, it will issue a certification, in writing, to that effect and add the firm to the List.

## Program Examinations  

- Eligibility verification
- Scope of  review
- Verification: eligibility requirements at time of application and examination
- location, ownership & employment percentage requirements
- Time frame - when notified of a possible
- 	 material change in status or random,
- 	 at the discretion of SBA

**Federal Government Contracting Assistance**

**Notes:**
SBA may conduct a program examination at the time the business certifies to the SBA that it meets the requirements of the program or at any other time while the business is on the List or subsequent to receipt of HUBZone benefits.
SBA, at its sole discretion, may perform random program examinations to determine continuing compliance with program requirements, or may conduct a program examination in response to credible information calling into question the HUBZone status of a certified small business.

## Contractual AssistanceProcurement Methods 

- Set-aside awards
- Sole source awards
- Awards through full and open competition after application of a price preference in favor of the HUBZone SBC

**Federal Government Contracting Assistance**

**Notes:**
HUBZone firms are eligible for a wide variety of contracting opportunities.  Contracts are awarded through several procurement methods.  Sole-Source awards occur if the government estimate does not exceed $5 million for manufacturing requirements or $3 million for all other requirements. Set-aside awards are based on competition restricted to qualified HUBZone small businesses, and Awards to qualified HUBZone firms through full and open competition after a price evaluation preference in favor of the HUBZone business.  However, the offer of the HUBZone small business must not be more than 10 percent higher than the offer of a non-HUBZone/non-small business.  

## Requirements Not Available for HUBZone Set-aside 

- Federal Prison Industries (FPI)
- Javits-Wagner-O’Day Act (JWOD)
- Current 8(a) requirements
- Micro Purchase requirements - for $2,500 or less

**Federal Government Contracting Assistance**

**Notes:**
A contracting activity may not make a requirement available for a HUBZone contract if it can be filled through award to the Federal Prison Industries or to Javit-Wagner-O’Day Act participating non-profit agencies for the blind and severely disabled.  In addition, projects currently being performed by an 8(a) Business Development Program participant, or where the dollar value of the project is at or less than the $2500 threshold is not available for HUBZone award. 

## Website and Mapping Capability

**www.sba.gov/hubzone**
- Identification of qualified areas:
- Non-metropolitan counties
- Census tracts
- Indian reservations
- EZ/EC s etc.

**Federal Government Contracting Assistance**

**Notes:**
Special computer mapping software on SBA’s Wed site allows firms to determine quickly whether they are located in a qualified HUBZone.  Just go to the SBA web site: www.sba.gov/hubzone and enter your firm’s address according to the easy-to-follow instructions.  State-of-the-art software allows potential applicants to find out immediately if they qualify.  The system allows searches by address, county, or town and maps out metropolitan areas.  Also, Native American Reservations, and non-metropolitan counties that qualify by income, unemployment rate , or both. 

## The HUBZone Empowerment Contracting Program

- For further information contact :
- 	Michael P. McHale, Asst.Admin. Office of Procurement Policy and Liaison ,
- 	SBA Office of Government Contracting
-  		 e-mail: michael.mchale@sba.gov
- 		 (tel)  (202)  205-6731
- 		 (fax) (202)  205-7324

**Federal Government Contracting Assistance**

**Notes:**
If you would like additional information or have questions on the HUBZone Empowerment Contracting Program, you may contact your local SBA District Office.
To search for eligible HUBZone businesses, contracting officers and individuals can use SBA’s Procurement Marketing and Access Network (Pro-Net).