Subpart 19.13 - Historically Underutilized

Business Zone (HUBZone) Program

Parent topic: Part 19 - Small Business Programs

19.1301 General.

(a) The Historically Underutilized Business Zone (HUBZone) Act of 1997 (15 U.S.C.631 note) created

the HUBZone Program.

(b) The purpose of the HUBZone Program is to provide Federal contracting assistance for qualified

small business concerns located in historically underutilized business zones, in an effort to increase

employment opportunities, investment, and economic development in those areas.

19.1302 [Reserved].

19.1303 Status as a HUBZone small business concern.

(a) Status as a HUBZone small business concern is determined by the Small Business Administration

(SBA) in accordance with 13 CFR Part 126.

(b) If SBA determines that a concern is a HUBZone small business, it will designate the concern as a

HUBZone small business in the Dynamic Small Business Search (DSBS) at https://web.sba.gov/

pro-net/search/dsp_dsbs.cfm. SBA's designation also appears in SAM. Only firms designated in DSBS

and SAM as HUBZone small business concerns are eligible for HUBZone preferences. HUBZone

preferences are not contingent on the place of performance.

(c) A joint venture may be considered a HUBZone small business concern if—

(1)The joint venture qualifies as small under 19.301-1(a)(2)(i);

(2)At least one party to the joint venture is a HUBZone small business concern; and

(3)The joint venture complies with 13 CFR 126.616(a) through (c).

(d) To be eligible for a HUBZone contract under this section, a HUBZone small business concern

must be a HUBZone small business concern at the time of its initial offer.

19.1304 Exclusions.
This subpart does not apply to-

(a) Requirements that can be satisfied through award to-

(1) Federal Prison Industries, Inc. (see subpart 8.6); or

(2) AbilityOne participating non-profit agencies for the blind or severely disabled (see subpart 8.7);

(b) Orders under indefinite-delivery contracts (see subpart 16.5). (But see 16.505(b)(2)(i)(F) for

discretionary set-asides of orders);

(c) Orders against Federal Supply Schedules (see subpart 8.4). (But see 8.405-5 for discretionary

set-asides of orders);

(d) Requirements currently being performed by an 8(a) participant or requirements SBA has

accepted for performance under the authority of the 8(a) program, unless SBA has consented to

release the requirements from the 8(a) program; or

(e) Requirements for commissary or exchange resale items.

19.1305 HUBZone set-aside procedures.

(a) The contracting officer-

(1) Shall comply with 19.203 before deciding to set aside an acquisition under the HUBZone

Program;

(2) May set aside acquisitions exceeding the micro-purchase threshold for competition restricted to

HUBZone small business concerns when the requirements of paragraph (b) of this section can be

satisfied; and

(3) Shall consider HUBZone set-asides before considering HUBZone sole-source awards (see

19.1306) or small business set-asides (see subpart 19.5).

(b) To set aside an acquisition for competition restricted to HUBZone small business concerns, the

contracting officer must have a reasonable expectation that-

(1) Offers will be received from two or more HUBZone small business concerns; and

(2) Award will be made at a fair market price.

(c) If the contracting officer receives only one acceptable offer from a HUBZone small business

concern in response to a set aside, the contracting officer should make an award to that concern. If

the contracting officer receives no acceptable offers from HUBZone small business concerns, the

HUBZone set-aside shall be withdrawn and the requirement, if still valid, set aside for small business

concerns, as appropriate (see 19.203).

(d) The procedures at 19.202-1 and, at 19.402 apply to this section.

(1) When the SBA intends to appeal a contracting officer’s decision to reject a recommendation of

the SBA procurement center representative (or, if a procurement center representative is not

assigned, see 19.402(a)) to set aside an acquisition for competition restricted to HUBZone small
business concerns, the SBA procurement center representative shall notify the contracting officer, in

writing, of its intent within 5 business days of receiving the contracting officer’s notice of rejection.

(2) Upon receipt of notice of SBA’s intent to appeal, the contracting officer shall suspend action on

the acquisition until the head of the contracting activity issues a written decision on the appeal,

unless the head of the contracting activity makes a written determination that urgent and

compelling circumstances, which significantly affect the interests of the Government, exist.

(3) Within 15 business days of SBA’s notification to the contracting officer, SBA must file its formal

appeal with the head of the agency, or the appeal will be deemed withdrawn. The head of the agency

shall reply to SBA within 15 business days of receiving the appeal. The decision of the head of the

agency shall be final.

19.1306 HUBZone sole-source awards.

(a) A contracting officer shall consider a contract award to a HUBZone small business concern on a

sole-source basis (see 6.302-5(b)(5)) before considering a small business set-aside (see 19.203 and

subpart 19.5), provided none of the exclusions at 19.1304 apply; and-

(1) The contracting officer does not have a reasonable expectation that offers would be received

from two or more HUBZone small business concerns;

(2) The anticipated price of the contract, including options, will not exceed-

(i) $7 million for a requirement within the North American Industry Classification System (NAICS)

codes for manufacturing; or

(ii) $4.5 million for a requirement within all other NAICS codes;

(3) The requirement is not currently being performed by an 8(a) participant under the provisions of

subpart 19.8 or has been accepted as a requirement by SBA under subpart 19.8;

(4) The HUBZone small business concern has been determined to be a responsible contractor with

respect to performance; and

(5) Award can be made at a fair and reasonable price.

(b) The SBA has the right to appeal the contracting officer’s decision not to make a HUBZone solesource award (see 13 CFR 126.610).

19.1307 Price evaluation preference for HUBZone small

business concerns.

(a) The price evaluation preference for HUBZone small business concerns shall be used in

acquisitions conducted using full and open competition. The preference shall not be used-

(1) Where price is not a selection factor so that a price evaluation preference would not be

considered (e.g., Architect/Engineer acquisitions); 
(2) Where all fair and reasonable offers are accepted (e.g., the award of multiple award schedule

contracts); or

(3) For the reserved portion of a solicitation for a multiple-award contract (see 19.503).

(b) The contracting officer shall give offers from HUBZone small business concerns a price

evaluation preference by adding a factor of 10 percent to all offers, except-

(1) Offers from HUBZone small business concerns that have not waived the evaluation preference;

or

(2) Otherwise successful offers from small business concerns.

(c) The factor of 10 percent shall be applied on a line item basis or to any group of items on which

award may be made. Other evaluation factors, such as transportation costs or rent-free use of

Government property, shall be added to the offer to establish the base offer before adding the factor

of 10 percent.

(d) When the two highest rated offerors are a HUBZone small business concern and a large

business, and the evaluated offer of the HUBZone small business concern is equal to the evaluated

offer of the large business after considering the price evaluation preference, the contracting officer

shall award the contract to the HUBZone small business concern.

19.1308 [Reserved].

19.1309 Contract clauses.

(a)The contracting officer shall insert the clause 52.219-3, Notice of HUBZone Set-Aside or SoleSource Award, in solicitations and contracts for acquisitions that are set aside or awarded on a solesource basis to, HUBZone small business concerns under 19.1305 or 19.1306. This includes

multiple-award contracts when orders may be set aside for HUBZone small business concerns as

described in 8.405-5 and 16.505(b)(2)(i)(F) or when orders may be issued directly to one HUBZone

small business concern in accordance with 19.504(c)(1)(ii).

(b)The contracting officer shall insert the clause at 52.219-4, Notice of Price Evaluation Preference

for HUBZone Small Business Concerns, in solicitations and contracts for acquisitions conducted

using full and open competition.

(c)For use of clause 52.219-14, Limitations on Subcontracting, see the prescription at 19.507(e).

(d) For use of clause 52.219-33, Nonmanufacturer Rule, see the prescription at 19.507(h).