R41268 – Small Business Administration HUBZone Program – 9/22/2016


Small Business Administration HUBZone Program

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Author: Robert Jay Dilger, Senior Specialist in American National Government
Pages: 41

The Small Business Administration (SBA) administers several programs to support small businesses, including the Historically Underutilized Business Zone Empowerment Contracting (HUBZone) program. The HUBZone program is a small business federal contracting assistance program "whose primary objective is job creation and increasing capital investment in distressed communities." It provides participating small businesses located in areas with low income, high poverty rates, or high unemployment rates with contracting opportunities in the form of set-asides, sole-source awards, and price-evaluation preferences. Firms must be certified by the SBA to participate in the HUBZone program. On October 5, 2015, there were 5,313 certified HUBZone small businesses. In FY2014, the federal government awarded 74,812 contracts valued at $6.67 billion to HUBZone-certified businesses, with about $1.69 billion of that amount awarded through a HUBZone set-aside, sole-source, or price-evaluation preference award. The program’s FY2014 administrative cost was about $10.3 million. Its FY2016 appropriation is $3.0 million, with the additional cost of administering the program provided by the SBA’s appropriation for general administrative expenses. Congressional interest in the HUBZone program has increased in recent years, primarily due to U.S. Government Accountability Office (GAO) reports of fraud in the program. Some Members have called for the program’s termination. Others have recommended that the SBA continue its efforts to improve its administration of the program, especially its efforts to prevent fraud. Bills: H.R. 3175, H.R. 273, H.R. 7240, S. 1859