Announcement

The US Small Business Administration has certified MegaPhase LLC, Stroudsburg, Pennsylvania as a HUBZone concern. This provides MegaPhase with the opportunity to dramatically expand its Government Contracting growth plans and continue its 3-year track record of solid, profitable expansion. MegaPhase President & CEO, Bill Pote, states "this (certification) will enable MegaPhase to really get a foothold into electronic Defense contracting, and grow its workforce during the years to come." Click here to view the certification in pdf format.

Introduction

The HUBZone Empowerment Contracting Program refers to Historically Underutilized Business Zones. It was created in 1997 as a result of legislation sponsored by Senator Christopher 'Kit' Bond, the ranking member of the Senate Small Business Committee. The program was formally opened to the public on March 22, 1999 and currently more than 3,000 firms have obtained certification. The federal government has a 2% goal of channeling federal contracts through the HUBZone program this equates to about $4 billion in fiscal 2001. Participants in the program can receive contracts through competition limited to qualified HUBZone firms, or on a sole-source basis. HUBZone firms are also given a price preference in bidding during full and open competition over non-HUBZone large firms. Complete program information available at www.sba.gov/hubzone

Mission

Provide Federal-contracting opportunities for certain qualified small business concerns located in distressed communities in an effort to promote private sector investment and employment opportunities in these communities. Fostering the growth of Federal contractors in these areas and ensuring that these contractors become viable businesses for the long term will help to empower these areas while not adversely affecting recent efforts to streamline and improve the Federal procurement process.

Background

This program seeks to encourage economic development in historically underutilized business zones - or HUBZones - through establishment of preferences for award of Federal contracts to small businesses located in these areas. The HUBZone Empowerment Contracting Program was enacted into law as part of the Small Business Reauthorization Act of 1997. The program falls under the auspices of the U.S. Small Business Administration. The final rule to implement the Program was issued on June 11, 1998. Program enhancements through amendments to this '98 final rule appeared in the Federal Register on June 18, 2001 and were effective February 20, 2001.

Qualifications

SBA standards to be certified HUBZone SBC:

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

Historically Underutilized Business Zones

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

Affected Procuring Agencies

As of Oct. 1, 2000 all Federal departments/agencies involved with procurement must factor into their contracting plans annual goals established for the HUBZone Empowerment Contracting Program.

Types of HUBZone Contracts

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

Goaling Levels

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