Who qualifies for HUBZone certification?

HUBZone is SBA's location-based contracting program, set out in 13 CFR part 126. It tests where your principal office is and where your employees live, not who the owners are, beyond citizenship.

Ownership. The firm must be at least 51% owned and controlled by one or more U.S. citizens, or owned under one of the alternatives in 13 CFR 126.200(a): an Alaska Native Corporation, one or more Indian tribal governments, one or more Community Development Corporations, a small agricultural cooperative, or one or more Native Hawaiian Organizations.

Size. The firm must be small under SBA's size standards.

Principal office. Your principal office must sit in a HUBZone. Under 13 CFR 126.103, a HUBZone is an area within one or more of seven types: qualified census tracts, qualified non-metropolitan counties, lands within the external boundaries of an Indian reservation, redesignated areas, qualified base closure areas, qualified disaster areas and governor-designated covered areas. SBA's HUBZone map is the test for a given address.

Employee residency. At least 35% of your employees must live in a HUBZone, not necessarily the one your office is in. SBA counts as an employee anyone who generally works at least 10 hours a week over the four weeks before the review date, full-time or part-time. SBA rounds to the nearest whole person: a firm with 25 employees needs 9 HUBZone residents, and a one-person firm needs that person to live in a HUBZone.

The 35% test while you perform. At application, at each recertification and with each HUBZone offer, you certify that you will attempt to maintain 35% residency while performing a HUBZone contract. That means documented efforts such as written job offers, advertisements and job fairs. A firm below 20% HUBZone residents during a HUBZone contract fails that standard outright.

What it unlocks. HUBZone set-asides, a 10% price evaluation preference in full and open competitions, and sole-source awards up to $8.5 million for manufacturing NAICS codes and $5.5 million for other work (FAR 19.1306).

Staying certified. You recertify every three years, in the 90 calendar days before the anniversary of your certification date, and there is no limit on how long you can stay in the program. A firm that recertifies within 30 days after its eligibility period ends is reinstated. If the firm merges with, acquires or is acquired by another business, it must show SBA within 30 days that it still meets the requirements.

Practical step. Check every employee's home address against the map before you apply and again before each HUBZone offer, since one resignation in a small firm can move the percentage.