My small manufacturing shop is in an older industrial district, and a customer mentioned we should look into HUBZone certification. We're a 14-person shop. I've looked at the SBA's HUBZone map, but I'm not sure if our specific address qualifies. I also saw something about employees needing to live in a HUBZone. Does that mean 35% of my 14 employees need to live in one, or is it a different number? What is the real benefit of this certification when bidding on federal work?
HUBZone certification is a small business program that provides contracting preferences for businesses located in historically underutilized business zones. You can check if your office address qualifies by using the official SBA HUBZone map tool, which provides the most accurate and up-to-date information for specific addresses. At least 35 percent of a concern's employees must qualify as HUBZone resident employees for certification (13 CFR 126.200(d)(1)). For your 14-person shop, this means at least five employees would need to reside in a HUBZone. The primary benefit of this certification for federal work is a price evaluation preference in full and open competition, where a factor of 10 percent is added to all other offers except those from small businesses (FAR 19.1307(b)). Additionally, HUBZone businesses can receive sole-source awards for acquisitions up to $8.5 million for manufacturing NAICS codes or $5.5 million for all other NAICS codes (FAR 19.1306(a)(2)).
Your shop's principal office must be located in a HUBZone to qualify for the certification, except for concerns owned in whole or in part by Indian Tribal Governments (13 CFR 126.200(c)). Nadia is correct that 35 percent of your 14 employees, or at least five, must reside in a HUBZone, and that the SBA HUBZone map is the correct tool to verify addresses. The HUBZone status of a business is verified through the SBA's certification process, and contracting officers confirm this status by checking SAM.gov.