HUBZone Contractors: Advantages and Federal Opportunities

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HUBZone Contractors: Advantages and Federal Opportunities

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs.

What Is the HUBZone Program?

The Small Business Administration (SBA) operates the HUBZone program, which was created to enable qualified small businesses to compete for set-aside contracts and receive preferential consideration in competitive, open contract bidding.

What is a HUBZone?

HUBZones are historically underutilized business zones. The SBA designated them as such based on the most recent census data. HUBZone designations are re-evaluated and updated every five years. The previous review was in 2018, and the newly revised map will be released on July 1, 2023. The next review will take place in 2028.

What Are the Qualification Criteria for the HUBZone Program?

To become certified for the HUBZone program, your business must meet the SBA’s definition of a small business. It must also be at least 51% owned and controlled by U.S. citizens, a community development corporation, agricultural coop, Alaskan Native corporation, Native Hawaiian organization, or Native American tribe. Your principal office must be located within a HUBZone, and at least 35% of your employees must reside in a HUBZone.

How Can A Business Get HUBZone Certified?

The certification process is handled online. The steps involved are outlined below:

  1. If you don’t already have a SAM.Gov (System for Award Management) account, you’ll need to establish one.
  2. You’ll also need to set up a General Login System account if you don’t have one.
  3. Sign in to the General Login System, select “Access,” then select “HUBZone,” and follow the prompts.
  4. You’ll receive an email containing instructions for electronically verifying your application, which you must do within two business days.
  5. Submit all required supporting documents within three business days. If you receive a request for additional documents from the HUBZone team after that, be sure to submit them within five business days of the request. Failure to meet the deadlines for submitting required documents can result in your application for HUBZone certification being disapproved or withdrawn.

Within 48 hours of approval, SBA will update your company’s status to designate it as a HUBZone-certified business in DSBS, the Dynamic Small Business Search database that government agencies search when looking for contractors for upcoming projects.

You can maintain your HUBZone status as long as your company continues to meet the qualification criteria. However, you must recertify your business annually.

How Do Contractors Benefit from Participating in the HUBZone Program?

Becoming certified for the HUBZone program allows your business to compete for certain set-aside contracts, giving you access to federal contracting opportunities you might not otherwise be considered for.  You will be competing only against other HUBZone-certified contractors.

Government agencies are under a Congressional mandate to award a minimum of 3% of all federal government contracting funds to participating HUBZone-certified participants each year. Businesses participating in the HUBZone program may also receive a 10% price preference during the evaluation of proposals submitted for SBA contracts.

HUBZone contractors also gain the satisfaction of knowing that by participating in the program, they can contribute to the economic vitality of the disadvantaged communities in which their business is located.

Construction Surety Bond Requirements

If you are relatively new to federal contracting, you may not have much experience with construction surety bonds. Under the federal Miller Act, contractors are required to purchase certain surety bonds as a condition for bidding on and being awarded federal contracts over $100,000. (There are similar bonding requirements for state-funded construction projects as set forth in each state’s version of the federal Miller Act, known as “Little Miller Acts.”)

The specific bonds required for federally funded construction projects under the Miller Act are bid bonds, performance bonds, and payment bonds. However, certain projects may carry additional bonding requirements:

  • A bid bond is a contractor’s guarantee to accept the job at a price quoted if chosen as the winning bidder. It also guarantees that the contractor can obtain the necessary performance and payment bonds if awarded the contract.
  • A performance bond guarantees that the contractor will complete the job in full compliance with the law and the terms of the construction contract.
  • A payment bond guarantees that the contractor will pay all payments to subcontractors, suppliers, and workers in accordance with the payment schedule and terms included in the construction contract.

Construction surety bonds provide financial protection for the federal project owner. If the contractor commits an unlawful or unethical act that causes the project owner a monetary loss, it provides a way for the agency to seek compensation.

The Small Business Administration (SBA) guarantees bid, performance, and payment surety bonds issued by certain surety companies and agencies, including Surety Bond Professionals.

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