Introduction
Let’s be real—competing for government contracts isn’t easy, especially if you’re a small business trying to stand out. That’s exactly why the HUBZone program exists: to give businesses like yours a fighting chance while supporting communities that could really use an economic boost. It’s a win-win.
The HUBZone program, short for Historically Underutilized Business Zone, was designed to drive economic growth in communities that need it the most, while helping small businesses gain access to lucrative government contracts. From set-aside opportunities to price evaluation preferences, HUBZone-certified businesses enjoy unique benefits that can level the playing field in federal contracting.
In this blog, we’ll break down everything you need to know about the HUBZone program, including eligibility criteria, certification steps, and actionable tips to help you leverage your certification effectively. If you’re serious about winning more government contracts, this guide is for you. And for even more insights, don’t forget to check out our latest GovConHacks podcast episode, where we dive deep into the HUBZone program’s ins and outs.
What is the HUBZone Program?
In simple terms, the HUBZone program is run by the SBA to help businesses in historically underutilized areas access exclusive government contracting opportunities. By offering set-aside contracts and other perks, the program levels the playing field and gives small businesses a better shot at winning work.
Key Benefits of HUBZone Certification
- Exclusive Set-Aside Contracts – As a HUBZone-certified business, you’ll get access to contracts that are reserved just for companies like yours. Fewer competitors = better odds of landing the deal. Use the sources sought phase of the procurement cycle and the SBA’s “Rule of Two” to make the most of it.
- 10% Price Evaluation Preference – You get a pricing advantage when competing in a “Full & Open” bid (meaning not set aside). Even if your bid is up to 10% higher than a non-HUBZone competitor, you might still come out on top because of the evaluation preference.
- Better Visibility with Federal Buyers – Certification makes you more attractive to government buyers. You’ll show up in SBA’s HUBZone database, which contracting officers use to meet their HUBZone goals. Plus, certification shows buyers you’re contributing to economic development—something they care about.
Common Challenges in the HUBZone Program
While the HUBZone program offers great advantages, staying compliant and competitive isn’t always smooth sailing. Many businesses jump into the program excited about the potential contracts but later navigate unexpected hurdles. Let’s talk about the most common challenges and how to avoid them.
1. Maintaining Employee Residency Compliance
One of the toughest parts of HUBZone certification is ensuring that at least 35% of your employees continue to live in a HUBZone area. Employee turnover can make this tricky—especially if you’re growing fast or hiring for specialized roles.
Solution: Set up a process to regularly verify employee addresses and document everything. This might sound like a hassle, but it’s better than scrambling during an SBA audit. Tools like monday.com can help track and automate these verifications (yes, shameless plug—we help with that too!).
2. Navigating HUBZone Map Changes
HUBZone designations aren’t permanent. The SBA periodically updates its map, which means an area that qualifies today might not qualify tomorrow. If your principal office or employees’ residences fall outside the new boundaries, you could lose your certification.
Solution: Keep an eye on SBA’s HUBZone map updates. If you’re in an area that might be at risk of losing its designation, start planning early—whether that means relocating your principal office or recruiting more employees from a stable HUBZone.
3. Preparing for SBA Audits
Once certified, your business is subject to periodic audits by the SBA. These audits are no joke—they’ll check your records to ensure you meet all requirements, including employee residency and principal office location.
Solution: Be audit-ready at all times. Maintain clear, up-to-date documentation on employee addresses, business size, and office locations. If you’re already juggling a million tasks, consider getting outside help to keep everything organized.
4. Competing Beyond HUBZone Set-Asides
HUBZone certification opens up set-aside opportunities, but relying solely on those can limit your growth. To stay competitive, you need to be prepared to compete in full and open bids as well.
Solution: Use the 10% price evaluation preference to your advantage in open competitions. Beyond that, focus on building relationships with contracting officers and showcasing your value beyond the certification.
HUBZone Eligibility Criteria
Getting HUBZone-certified can open a lot of doors, but not every business qualifies. Before you start the process, it’s crucial to know whether your business meets the specific criteria laid out by the SBA. The requirements aren’t just about your business size—they go deeper into where you operate and who works for you.
Here’s a quick breakdown of what you’ll need to qualify:
1. Be a Small Business
First things first, your business must be classified as small according to SBA size standards. The size standard varies by industry, so make sure you check the NAICS code that applies to your primary line of work. If you’re not sure how to figure this out, the SBA has a size standards tool that can help.
2. Principal Office in a HUBZone
Your principal office—where the majority of your employees work—must be located in a HUBZone-designated area. This doesn’t mean your corporate headquarters; it means the location where your business gets the work done. You can check whether your address qualifies by using the SBA’s HUBZone map.
3. At Least 35% of Employees Must Reside in a HUBZone
This is one of the trickiest parts of maintaining your certification. At least 35% of your employees need to live in a HUBZone-designated area. It doesn’t matter if they work remotely or on-site; as long as their primary residence is in a HUBZone, they count.
Pro Tip: Keeping track of this can be tough, especially as your team grows, so it helps to have a process in place for verifying employee residency regularly.
4. Majority Ownership by a U.S. Citizen
To qualify, your business must be at least 51% owned and controlled by a U.S. citizen or another qualifying entity, like a Community Development Corporation, agricultural cooperative, or Native Hawaiian organization.
5. Certification through the SBA
Finally, you need to apply for and receive official certification from the SBA. The application process involves submitting documentation to prove you meet all the above requirements. Once certified, you’ll need to maintain compliance and re-certify annually.
Meeting these criteria isn’t always straightforward, but if you do qualify, the benefits can far outweigh the effort. If you’re serious about getting certified, don’t rush—make sure you have the right systems in place to stay compliant long-term.
Tips for Leveraging HUBZone Certification
So, you’re certified (or on your way)—great! But having that HUBZone badge isn’t enough by itself. To really make it work for your business, you need to know how to leverage it strategically. Here are some practical tips to help you get the most out of your certification:
1. Build Strong Relationships with Contracting Officers
Winning government contracts often comes down to relationships. Contracting officers (COs) and small business specialists have HUBZone goals to meet, and they’re actively looking for qualified businesses to help them do that.
- Actionable Tip: Attend industry days, outreach events, and conferences where you can meet these decision-makers in person. Follow up afterward to stay on their radar. Consistency is key!
2. Position Yourself as More Than Just a HUBZone Business
While being HUBZone-certified is a valuable differentiator, don’t lead with it. Contracting officers care about your ability to deliver quality results first and foremost. HUBZone status is the cherry on top, not the whole cake.
- Actionable Tip: When marketing to government buyers, focus on your core capabilities, past performance, and what makes you unique. Then mention your HUBZone status as an added value.
3. Use the 10% Price Evaluation Preference to Your Advantage
In full and open competitions, the 10% price evaluation preference can make a huge difference. It allows you to bid slightly higher than competitors and still be considered for award.
- Actionable Tip: Know your costs and don’t underbid. Use the preference strategically by pricing competitively without undercutting your margins.
4. Stay Audit-Ready
Nothing derails a HUBZone business faster than non-compliance. Regular audits are part of the deal, so staying compliant year-round is critical.
- Actionable Tip: Implement a system to track employee residency, principal office status, and other key requirements. If you already use a tool like monday.com, set up automated reminders for periodic checks.
5. Market Your Certification the Right Way
While you shouldn’t lead with HUBZone status, it’s still an important selling point—especially when reaching out to prime contractors who need small business partners to meet their subcontracting goals.
- Actionable Tip: Include your HUBZone certification in your capability statement and pitch decks, but keep the focus on your expertise and results. When approaching large primes, position yourself as a capable, ready-to-go partner who also happens to help them meet their small business goals.
6. Stay Active in the GovCon Community
You can’t win contracts from the sidelines. The more involved you are in the government contracting world, the more opportunities you’ll uncover.
- Actionable Tip: Join HUBZone councils, attend government contracting networking events, and engage with online communities (like GovConHacks!). This helps you stay informed and opens doors to partnerships and subcontracting opportunities by sparking conversations with like-minded people.
Real-World Success Stories
If you want to see the HUBZone program in action, look no further than Byron “Doc” Carroll, President of Carroll International. Recently featured on our GovConHacks podcast, Doc shared how his company leveraged HUBZone certification to fuel rapid growth and land major government contracts. Carroll International is also a Service-Disabled Veteran-Owned Small Business (SDVOSB) and has become a trusted provider of tactical and medical equipment to government agencies, including the Department of Defense (DOD). As a graduate of the DOD’s Mentor-Protege Program (MPP), Doc has seen multiple levels of what effective contracting looks like and shared his experiences with us.
Doc emphasized that while HUBZone certification opened doors, success didn’t come overnight. It took strategic relationship-building, consistent follow-through, and a commitment to delivering value beyond just meeting small business requirements.
His advice? “Don’t just rely on the certification—show them you can deliver.”
His story proves that when used strategically, the HUBZone program can help level the playing field for small businesses, opening opportunities to compete and succeed in the federal marketplace. If you haven’t already, check out the full podcast episode to hear Doc’s insights firsthand—you don’t want to miss it!
How Duwel Dev Can Help
1. HUBZone Certification Assistance
Applying for HUBZone certification can feel like jumping through hoops—verifying employee residency, confirming your principal office location, and submitting the right documentation to the SBA. We simplify the process by guiding you step-by-step to ensure your application is accurate and complete the first time. Unlike your no-cost resource partners, our team can do actual work through the delegate feature.
2. Compliance Management Solutions
Staying compliant is just as important as getting certified. From tracking employee residency to managing audit readiness, we help you set up systems that keep your business compliant year-round. Our custom solutions on monday.com can automate key compliance tasks, so you don’t have to scramble when the SBA comes knocking.
4. Proposal and Bid Support
Winning HUBZone contracts takes more than just showing up—you need a solid proposal that stands out. Our team can help you develop compliant, compelling proposals tailored to government buyers. We even track proposal hours and key metrics to help you optimize your process over time. Not sure what your “win theme” is or why you’re losing? Our team you covered.
5. Long-Term Strategy Development
The HUBZone program is a long game. We help you think beyond the certification by developing a federal sales strategy that leverages your status while focusing on sustainable growth. Whether you’re looking to compete for set-aside contracts or build partnerships with large primes, we’ll help you craft a game plan that works.
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