What Is HUBZone? 

Greenwood Aerospace is one of the leading government procurement and contracting companies, but did you know we are also a Native American-owned company? We are indeed! Ponca City, located in North-Central Oklahoma, sits on Native American land. 

So, what exactly is HUBZone, and why is it important to you and your mission? Let’s take a look at exactly what HUBZone certification is, what historically underutilized business zones are, and how the Small Business Administration can help connect your operation with a HUBZone-certified company. Also, we’ll talk about why HUBZone is important for economic development. 

HUBZone (Historically Underutilized Business Zone) Program

The HUBZone is a federal contracting assistance program designed to encourage economic development in areas of the nation that are in historically underutilized business zones. This can and does include both urban and rural communities. One of the major benefits of HUBZone small businesses is to promote job growth in areas that are generally barren of sufficient opportunities to support the population. 

We are located in a very rural part of northern Oklahoma. HUBZone has allowed us to grow as a business and offer employment opportunities in the local community that would otherwise be hard to come by. 

Benefits for HUBZone-certified companies 

HUBZone certification opens up a whole host of opportunities and benefits for eligible small business companies. These include:

• Preferential access to government contracts
• Set-aside opportunities to HUBZone certified companies
• A competitive edge in the government procurement process.

Another fantastic benefit of being a HUBZone-certified small business is that you have access to sole-source contracting. Unlike open bidding, where a contract is put out in the wild for all contenders to bid on, HUBZone allows certified companies to be selected without going through the competitive process. This saves an enormous amount of time and effort for HUBZone-certified companies, so they can focus on the contract instead of the process. 

Oh, and there is a 10% price evaluation preference for HUBZone-certified companies over competitors in the open market. 

Here is more information on what price evaluation preference is. In a nutshell, this affords a 10% “grace” in the price of the contract if the contractor is a HUBZone-certified company. While price is generally a significant factor in federal procurement, agencies may consider factors beyond cost alone. The government may take into account a bidder's HUBZone status and other socio-economic factors during the evaluation process.

What Is A HUBZone Area?

So, here’s the deal: not everywhere is HUBZone eligible. The entire point of the program is to help level the playing field for underutilized business areas. One such area is what the SBA deems “Indian Land,” which Greenwood Aerospace is located on in Ponca City. 

There are other determining factors, but the idea is that HUBZone-certified companies that are not located in urban hubs of commerce can gain a foothold in competitive markets where they would otherwise struggle. 
Here are some of the key characteristics of a HUBzone:

1. Geographical criteria: The areas that HUBZones targets are ones that have historically faced tough economic challenges. The main characteristics of these areas are high unemployment, low median income, and high poverty rates. 
2. Supporting small businesses: one of the main purposes is to grow small businesses within economically disadvantaged areas. 

How Do You Know If You Live In A HubZone?

There are hundreds, if not thousands, of locations in the United States that are eligible for HUBZone based on geographical location alone. Not surprisingly, one of the main identifying features is sparse population densities.  

The SBA HUBZone Map is the best way to see whether or not you or your small business is located in a HUBZone.

You can see if your local area is eligible and, if so, by what means. As with the majority of Oklahoma, we are on Indian land, specifically the Osage Reservation.

What Are The HUBZone Program Requirements?

As with most (or all) government programs, you must meet an administrative threshold to entry. 

1. Geographic eligibility:
   1. The principal office: the business must have its principal office (company headquarters) located in a designated HUBZone. The location is critical because it directly contributes to the economic development of the local area, which is the whole point of the program. 
2. Employee residency:
   1. At least 35% of the small business’s total workforce must reside within the HUBZone. Since the goal is to help pull disadvantaged areas up by their bootstraps, it’s hard to justify the workforce not living in those areas. 
3. Ownership and control:
   1. The small business must be at least 51% owned and controlled by some text
      1. U.S. citizens
      2. A Community Development Corporation
      3. An agricultural cooperation
      4. An Indian tribe
   2. The individuals or legal entity who hold the majority of ownership interest must also have the company’s management and daily business operations located within a HUBZone. 
4. Affiliation rules:
   1. HUBZone-certified businesses are required by law to adhere to specific rules through affiliation. This includes other businesses, especially those that are not HUBZone certified, which can affect and impact your eligibility.
5. SAM.gov registration:
   1. All small businesses that want to become HUBZone certified need to be registered on SAM.gov first. This is the federal government’s primary database for vendors and is a prerequisite for all federal contracts. 
6. The certification process:
   1. All interested small businesses have to submit a complete application to the SBA for HUBSone certification. The application involves providing detailed information about:
      1. The business
      2. Its location
      3. Ownership details and specifics
      4. Compliance with program requirements
7. Eligibility maintenance:
   1. Once a small business is HUBZone certified, it must remain in compliance with the HUBZone Program requirements. Failure to maintain compliance can, in fact, result in your business losing certification. So, take this very seriously. 

Parting Thoughts

HUBZone has been a real boom for many rural areas of the country, along with the Native American tribes. It gives advantages to small businesses that want to succeed but are located in areas that are not historically economically successful. 

The great thing about HUBZone is that aspiring companies or companies in the formation process can target HUBZone geographic areas to launch. With all of the tools at your disposal for digital sales, payment processing, and marketing, it makes a lot of sense to locate in areas where you gain a competitive edge and where giving back to the community means providing meaningful work. 

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