Announcement

The US Small Business Administrationhas certified MegaPhase LLC, Stroudsburg, Pennsylvaniaas a HUBZone concern. This provides MegaPhase withthe opportunity to dramatically expand its GovernmentContracting growth plans and continue its 3-yeartrack record of solid, profitable expansion. MegaPhasePresident & CEO,Bill Pote, states "this (certification) will enableMegaPhase to really get a foothold into electronicDefense contracting, and grow its workforce duringthe years to come." Click here to view the certificationin pdf format.

Introduction

The HUBZone Empowerment Contracting Program refersto Historically Underutilized Business Zones. It wascreated in 1997 as a result of legislation sponsoredby Senator Christopher 'Kit' Bond, the ranking memberof the Senate Small Business Committee. The programwas formally opened to the public on March 22, 1999and currently more than 3,000 firms have obtained certification.The federal government has a 2% goal of channelingfederal contracts through the HUBZone program thisequates to about $4 billion in fiscal 2001. Participantsin the program can receive contracts through competitionlimited to qualified HUBZone firms, or on a sole-sourcebasis. HUBZone firms are also given a price preferencein bidding during full and open competition over non-HUBZonelarge firms. Complete program information availableat www.sba.gov/hubzone

Mission

Provide Federal-contracting opportunities for certainqualified small business concerns located in distressedcommunities in an effort to promote private sectorinvestment and employment opportunities in these communities.Fostering the growth of Federal contractors in theseareas and ensuring that these contractors become viablebusinesses for the long term will help to empower theseareas while not adversely affecting recent effortsto streamline and improve the Federal procurement process.

Background

This program seeks to encourage economic developmentin historically underutilized business zones - or HUBZones- through establishment of preferences for award ofFederal contracts to small businesses located in theseareas. The HUBZone Empowerment Contracting Programwas enacted into law as part of the Small BusinessReauthorization Act of 1997. The program falls underthe auspices of the U.S. Small Business Administration.The final rule to implement the Program was issuedon June 11, 1998. Program enhancements through amendmentsto this '98 final rule appeared in the Federal Registeron June 18, 2001 and were effective February 20, 2001.

Qualifications

SBA standards to be certified HUBZone SBC:

1. Located in a "historicallyunderutilized business zone."
2. Owned and controlled by one or more U.S. citizens, a Community Development Corporationor Indian tribe.
3. At least 35% of its employees reside in a HUBZone.

Historically Underutilized Business Zones

• 7,000 URBAN: Metropolitanareas qualified by census tracts.
• 900 RURAL: Non-metropolitan counties qualified by income or unemployment.
• NATIVE AMERICAN: Federally recognized Indian reservations.

AffectedProcuring Agencies

As of Oct. 1, 2000 all Federal departments/agenciesinvolved with procurement must factor into their contractingplans annual goals established for the HUBZone EmpowermentContracting Program.

Types of HUBZone Contracts

1. COMPETITIVE: Awarded if the contracting officer has a reasonable expectation that at least 2 qualified HUBZoneSBCs will submit offers and that the contract willbe awarded at a fair market price.
   
2. SOLE-SOURCE: HUBZone contracts can be awarded if the contracting officerdetermines that:
   - A single qualified HUBZone SBC is responsible to perform the contract
   - Two or more qualified HUBZone SBCs are not likelyto submit offers
   - Award price of the proposed contract, includingoptions, will not exceed $5,000,000 for a requirementwithin the North American Industry Classification System (NAICS) code for manufacturing or $3,000,000 for a requirementwithin all other NAICS codes.
   
3. FULL AND OPEN: Competitive contracts awarded with a price evaluation preference. Theoffer of the HUBZone small business must not be 10percent higher than the offer of a non-small business.

Goaling Levels

The Small Business ReauthorizationAct of 1997 increases the overall government wide procurementgoal for small business from 20% to 23%. The statutesets the goal for HUBZone contracts as 2% in 2001,representing $4 billion and increasing to 3% by 2003,representing $6 billion.