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Federal Market Intelligence for Small Business |
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HUBZone firms on the riseA new report from the Congressional Research Service (CRS) offers insight into recent growth in the number of HUBZone certified firms as well as into HUBZone contracting, number of zones and application processing times. Number of HUBZone firms The number of certified HUBZone firms has been on the rise for the last three years since hitting a low in mid-2015, according to the CRS report. There were 6,558 HUBZone firms as of Nov. 8, up from a low point of 5,207 firms in July 2015. That is a 26% increase. The number of HUBZone firms has experienced fairly large changes in the last seven years. From a high of 8,533 firms in May 2011, the number dropped sharply to 6,900 in December 2011, and then slowly decreased further to bottom out at 5,207 in July 2015. The number rebounded to 5,930 in January 2017 and has continued to grow. Small Business Administration officials blamed the downward trend from 2011 to 2015 on many HUBZone census tracts becoming ineligible due to increased incomes. HUBZone contracting It turns out that HUBZone firms are doing fairly well in federal contracting, but a relatively small portion is being awarded through HUBZone set-asides, according to the CRS report. HUBZone firms won $7.5 billion in federal contracts in fiscal 2017, mostly through generic small business set-asides or through socio-economic small business set-asides. Small firms often have multiple certifications in addition to being generically “small.” The HUBZone firms were awarded $1.49 billion through HUBZone set-asides, $347 million through HUBZone price-evaluation preferences and $65 million in HUBZone sole-source awards in fiscal 2017, the CRS report said. HUBZone-qualified areas As of June 2018, these areas were HUBZones: All are proposed to remain HUBZones until December 2021. Overall, 20,154 of the nation’s 74,002 census tracts (about 27%) had HUBZone status as of June, and 834 of the nation’s 3,242 counties (about 26%) had HUBZone status. Application processing time Prior to 2010, the SBA had a goal of processing HUBZone certification applications within 30 days. After reports of fraud in the program, the rules were tightened in 2010 and application reviews became more lengthy, taking five to 12 months. In recent years, 61% of applications are processed within three months. Under a new law effective Jan. 1, 2020, HUBZone applications must be processed within 60 days.
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