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Federal Market Intelligence for Small Business |
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Set-Aside Alert exclusive analysis:Set-Aside Alert exclusive research:More than 2,500 HUBZone firms decertified in FY2021-2022Ineligible firms removed from program after number of HUBZone firms surged by 30% from FY 2017-2020To reduce the number of ineligible firms in the HUBZone program, the Small Business Administration decertified more than 2,500 HUBZone firms and removed them from the program in fiscal 2021 and 2022, according to recent federal reports. The purge occurred after four years of dramatic growth in the number of certified HUBZone firms in SBA’s Dynamic Small Business Search (DSBS) from fiscal 2017 to 2020. Many HUBZone firms--whether longstanding or newly listed--were considered to be at risk of ineligibility at that time by the SBA’s Inspector General. The IG recently credited SBA with weeding out ineligible HUBZone firms by implementing regulations in fiscal 2021 requiring HUBZone firms to recertify annually, along with processes for SBA to tighten oversight on the firms’ recertification exams every three years. “Since initiating the annual recertifications and triannual program examinations in FY 2021, SBA decertified 2,548 [HUBZone] firms as of May 31, 2022,” states the IG’s Top Management and Performance Challenges Facing the SBA in FY 2023. The SBA’s initiative took place after the number of HUBZone firms listed in DSBS increased by 30% from fiscal 2017 to fiscal 2020. The number grew from 5,930 in January 2017 to 7,702 in December 2020, the Congressional Research Services reported. The 7,702 total was second-highest since May 2011, in which 8,533 firms were listed. The SBA’s own Fiscal 2022 Annual Performance Report also credits the agency’s program changes for trimming ineligible HUBZone firms. It states there were 5,651 certified HUBZone firms in fiscal 2021 and 4,634 such firms in fiscal 2022. Data for other years was not available. Will more culling occur? The CRS counted 6,407 HUBZone firms in DSBS in July 2022. SBA officials were not immediately available.
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