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Thousands of HUBZone Firms Face Decertification

Up to 40% of HUBZone companies could lose their eligibility unless Congress acts. SBA has posted an updated map showing geographic areas that no longer qualify for HUBZone status under the 2010 census.

The agency estimates that around 3,400 companies could be decertified either because their principal office is no longer in a HUBZone or 35% of their employees no longer live in a HUBZone. SBA has posted an address search page for companies to determine whether they are still located in a HUBZone: http://map0.sba.gov:82/gis/esri/hubzone/index.html. Go to www.sba.gov/content/notice-expiration-redesignated-hubzones-october-1-2011 for more information about the expirations.

The HUBZones that are expiring are those grandfathered in by Congress after the 2000 census.

The Senate has passed grandfathering legislation that would allow the affected companies to remain in the HUBZone program for three years. The House has not scheduled a vote on the bill.

The HUBZone Contractors National Council urged its members to contact their representatives and push for action.

Decertification will not affect a company’s current HUBZone contracts, but will prevent them from receiving any new awards.

The Senate bill, the Small Business Fraud Prevention Act, S. 633, passed by unanimous vote Sept. 21.

The legislation would also give SBA new tools to combat fraud and abuse in small business contracting programs. It would require 8(a), HUBZone and service-disabled veteran-owned businesses to file documentation supporting their eligibility with the Online Registrations and Certifications database. Woman-owned businesses already must meet this requirement.

The bill’s anti-fraud provisions grew out of Government Accountability Office investigations that documented abuse in the 8(a), HUBZone and SDV programs.

Among other things, the bill provides for stiffer criminal and civil penalties for companies that misrepresent their eligibility for the contracting programs.


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