HUBZone PROGRAM UPDATE NATIONAL HUBZone SMALL BUSINESS CONFERENCE

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HUBZone PROGRAM UPDATE NATIONAL HUBZone SMALL BUSINESS CONFERENCE Powered By Docstoc
					        HUBZone PROGRAM UPDATE
 NATIONAL HUBZone SMALL BUSINESS
                    CONFERENCE
               ORLANDO, FLORIDA
                     August 9, 2005
Arthur E. Collins, Jr.
Deputy Associate Administrator for
HUBZone Program
              Program Overview

HUBZone Program -
Community Based:
     •Employment
     •Empowerment
     • Enterprise
                                   Program Purpose
   Provide Federal contracting assistance to qualified
    small business concerns located in historically
    underutilized business zones (HUBZones) to:

    • Increase employment opportunities

    • Stimulate capital investment in those areas

    • Empower communities through economic leveraging and
      the “multiplier effect.”
                      Program Design

   From the outset, designed as a
    virtual program always available
    at: www.sba.gov/hubzone
    • Application for Certification
    • Program Examinations
    • Recertification
                       HUBZone Eligibility
                           Requirements
   Size:
    • Small, by relevant SBA standards.
   Ownership and Control:
    • At least 51% by U.S. citizen(s), Community
      Development Corporation, Agriculture
      Cooperative, Alaska Native Corporation, or
      Indian tribe. Recently changed by statute.
    HUBZone Eligibility Requirements,
                             cont‟d…
   Location:
     • “Principal Office” must be located in a
       HUBZone (may differ for tribally owned
       concerns). Recently changed by statute.
   Employment:
     • At least 35% of employees must reside in a
       HUBZone (may differ for tribally owned
       concerns). Recently changed by statute.
    HUBZone Geographical Eligibility,
                   Qualified Areas
   No community that has met HUBZone
    geographical qualification requirements since
    program will exit the program, as a result of
    economic improvement, until the later of
    publication of the 2010 Decennial Census or
    expiration of its “re-designation period.” Recently
    changed by statute.
     • Reconciles program eligibility with a reasonable
       economic development planning horizon.
     • Stabilizes portfolio of HUBZone-certified vendors.
      HUBZone Eligibility, Qualified
                   Areas, cont‟d…
   Metropolitan Area Census Tracts : 11,600 areas
     • “Qualified Census Tract” that meets test for Low Income
       Housing Tax Credit. (HUD) (Changes with decennial
       census.)
   Non-metropolitan Counties: 1,200 counties
     • Median household income is less than 80% of the non-
       metropolitan state level (Census) (Changes with
       decennial census.)
     • Unemployment rate that is at least 140% of the lower of
       the state-wide or U.S. average (BLS) (Changes annually.)
       Recently changed by statute.
      HUBZone Eligibility, Qualified
                   Areas, cont‟d…
   Federally recognized Indian Reservations: Include
    lands meeting definition of Indian Country (Change
    is periodic)
   Areas affected by base realignments and closures.
    Recently changed by statute.
                          HUBZone Portfolio
   Total Portfolio: 12,728
   HUBZone firms‟ total average annual receipts: $24
    Billion
   HUBZone firms‟ total employment: 191,000 employees
   HUBZone residents employed by HUBZone firms:
    124,000 (65%)
                  HUBZone Portfolio, Firm
                          Demographics
   8(a) Firms                       16.3%
   WOBs                             29.3%
   Veteran Owned Firms              21%
   Service Disabled Veteran Firms   3.8%
   Minority Owned Firms             42%
   African American Owned Firms     22%
   Hispanic Owned Firms             9.4%
   Native American Owned Firms      8.3%
   Asian Owned Firms                3.5%
          HUBZone Portfolio, Commercial
                               Ranking
   If the HUBZone Portfolio were included in the
    Fortune 500, based on average annual revenue, it
    would be ranked 92nd , just ahead of McDonalds and
    Coca Cola.
   The portfolio:
    • Has over 620 firms with average annual revenue in excess of
      $10 million,
    • Includes 920 high technology firms in NAICS Code 332710,
      and
    • Includes 380 machine shops in NAICS Code 541512.
       HUBZone Portfolio, Program
                       Evaluation
   Recent regulatory change authorized SBA to
    collect updated financial information and
    information relating to employment and capital
    investment from certified firms in order to gauge
    the success of the HUBZone Program.
    • Survey was approved by the Office of Management and
      Budget, and
    • Is being executed over the Internet through September
      30, 2005.
                         HUBZone Program
                                 Benefits
   Set-aside awards
   Sole source awards
   Awards through full and open competition after
    application of 10% price evaluation preference
    (PEP)
   Subcontracting Opportunities
HUBZone Contract Awards by Fiscal
                            Year
   FY 1999   Goal - 1%     Actual - Not available

   FY 2000   Goal – 1.5% Actual - $663.3M (.33%)

   FY 2001   Goal – 2.0%   Actual - $1.7 B (.72%)

   FY 2002   Goal – 2.5%   Actual - $1.7 B (.71%)

   FY 2003   Goal – 3.0%   Actual - $3.4 B (1.23%)

   FY 2004   Goal – 3.0%   Actual - Not yet available
       Key Marketing Activity
    FedBizOpps electronic monitoring by the
     Office of HUBZone Program intended to:
    • Increase program awareness among Federal
       agencies, and
    • Remind contract personnel of HUBZone
       requirement of the 3% statutory prime
       contracting goal.
Contracting, HUBZone Procurement
                         Methods
    Set-aside awards
    Sole source awards
    Awards through full and open competition after
     application of a price preference in favor of the
     HUBZone SBC‟s
    Subcontracting Opportunities
             Contracting, Requirements
             Not Available for Set-aside
   Federal Prison Industries (FPI)
   Javits-Wagner-O‟Day Act (JWOD)
   Current 8(a) requirements
   Micro Purchase requirements at or below $2,500,
    and
   Others, not covered under FAR
        Contracting, 8(a)-HUBZone
               Order of Precedence
   Procedural Notice on October 10, 2001
    established that:
    • The HUBZone and the 8(a) programs have parity in the
      order of precedence.
   Recent regulations establish that the two programs
    are equal, but the contracting officer must
    consider the contracting activity‟s achievement of
    its goals and other relevant factors.
    Contracting, Set-Aside Procedures

   HUBZone set-asides considered before HUBZone
    sole-source or small business set-asides
   Contracting officer may set-aside acquisitions
    exceeding the Micro Purchase ($2,500) and below
    the Simplified Acquisition Threshold ($100K)
    Contracting, Set-Aside Procedures
   Contracting officers shall set-aside acquisitions
    exceeding the "Simplified Acquisition Threshold
    ($100,000)" when there is a reasonable
    expectation that two or more qualified HUBZone
    small business concerns will compete for the
    requirement and that the requirement can be
    obtained at a "fair and reasonable" price.
           Contracting, Sole Source
   HUBZone contracts can be awarded if the
    contracting officer determines that:
    • Only one qualified HUBZone SBC is responsible to
      perform the contract,
    • Two or more qualified HUBZone SBCs are not likely to
      submit offers, and,
    • The anticipated award price of the proposed contract,
      including options, will not exceed:
         $5 million for a requirement within the North
          American Industry Classification System (NAICS)
          code for manufacturing, or
         $3 million for a requirement within all other NAICS
          codes
         Contracting, Full and Open
                        Competition
   Competitive contracts can be 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.
      Contracting, Full and Open, Price
                 Evaluation Preference
   Apply a factor of 10 percent to all offers, except
    offers from other small businesses.
    • If the offer of the HUBZone SBC is not more than 10
      percent higher than the offer of a non-small business,
      the qualified HUBZone SBC‟s offer is deemed lower
      than the offer of the non-small business.
    • If the HUBZone SBC‟s offer is more than 10 percent
      higher than the non-small business‟ offer, the Price
      Evaluation Preference would not be applied.
      Contracting, Full and Open, Price
                  Evaluation Preference
   Any preference a small business concern receives
    under the HUBZone program does not eliminate the
    benefits another small business concern would
    receive under any other program designed to
    promote the development of small, small
    disadvantaged, or women-owned small businesses.
   When an offer is received from a SDB concern or a
    firm that qualifies as both a HUBZone and SDB
    concern, the SDB Price Evaluation Adjustment is
    applied first in order to establish the lowest,
    responsive and responsible offeror.
    Contracting, Subcontracting
                   Percentages
   Services (except construction) - 50
    percent
   General construction - 50 percent
   Construction - special trade - 50
    percent
   Supplies (other than from a regular
    dealer) - 50 percent
    Contracting, Subcontracting Plans
   There is no specified HUBZone goal for
    subcontracting, however...
     • For most large contracts (over $500,000 or $1
       million construction), large business contractors
       must create a subcontracting plan reflecting
       HUBZone firm participation
     • Factors into the firm‟s „Past Performance‟
       analysis on future contracting actions
    Contracting, Appeal of Decision not to Set-
        Aside Requirements over $100,000 for
                      HUBZone Competition
   Contracting Officer (CO) must notify cognizant
    Procurement Center Representative (PCR).
   SBA must notify CO of appeal within 5 business days of
    decision not to set-aside the requirement.
   CO must suspend action on procurement until Head of
    Contracting Agency (HCA) issues a decision, unless
    circumstances are urgent and compelling.
   SBA must file appeal to HCA within 15 business days of
    providing notification to CO.
   Decision is made by the HCA.
    Contracting, Protests of Eligibility
   Issues addressed:
    • Ownership and Control,
    • Employment of HUBZone Residents, and
    • Location of Principal Office in
   Issues involving size will be treated as a size protest;
    if protest involves size and status, each will be
    reviewed concurrently.
   Protests may be initiated by:
     • Sole Source - SBA or the CO
     • Competitive -Any interested party
      Contracting, Protests of Eligibility,
                                cont‟d…
   Format: Must be in writing and be specific.
   Filing:
    • Unsuccessful offeror - to the contracting officer, CO or
      SBA - to the Associate Administrator for HUBZone
      Program (AA/HUB).
    • Delivered in person, by Fax, US or Express mail
   Timeliness: Within 5 business days of bid opening
    or notification of successful offeror.
    Contracting, Protests of Eligibility,
                              cont‟d…
   The CO must refer protests to the SBA
    AA/HUB.
   SBA must notify the CO and the protester of
    the date of receipt and whether the protest
    will be processed or dismissed.
   SBA must determine HUBZone status within
    15 business days of receipt unless extended.
     Contracting, Protests of Eligibility,
                               cont‟d…
   The SBA AA/HUB will decide HUBZone protests.
   SBA will notify the CO, protester and the protested
    firm of its determination.
   If SBA fails to decide the protest within 15 business
    days (unless the CO grants an extension), the CO
    may award the contract.
   If the AA/HUB upholds the protest, the firm will be
    decertified.
      Contracting, Protests of Eligibility,
               Appeal of Determination
   The HUBZone SBC, protester, or CO may appeal
   Appeal must be in writing, and must be received by SBA within
    5 business days after receipt of the protest determination.
   SBA will only re-examine cases where there was a clear and
    significant error or complete failure to consider a significant
    fact.
   SBA will not consider additional information or changed
    circumstances that were not disclosed at the time of the
    decision or that are based upon a disagreement with the
    determination.
   Appeals will be decided by the ADA/GC&BD.
   The HUBZone Program

“Rebuilding America's
Communities, One Small
 Business at a Time "