11

D.J. CaulfieldD.J. Caulfield Area Director/U.S. EastArea Director/U.S. East

HUBZone ProgramHUBZone Program

State of the HUBZone ProgramState of the HUBZone Program **FOCUS on Contracting****FOCUS on Contracting**

HUBZone Overview for U.S. Department of Treasury staffHUBZone Overview for U.S. Department of Treasury staff

July 17, 2008 July 17, 2008

22

What We’ll Be Talking AboutWhat We’ll Be Talking About HUBZone program overview, accessHUBZone program overview, access

• (NOTE: Eligibility covered on Fact Sheet handout)(NOTE: Eligibility covered on Fact Sheet handout)

HUBZone contracting methodologiesHUBZone contracting methodologies FOCUS: HUBZone Set-asidesFOCUS: HUBZone Set-asides

• Statutes and regulationsStatutes and regulations Quick Search ToolQuick Search Tool Questions and RepliesQuestions and Replies

33

Program OverviewProgram Overview

The HUBZone Program = The HUBZone Program = EE³³Community Based: Community Based:

• Employment Employment • Empowerment Empowerment • EnterpriseEnterprise

44

AccessAccess From outset, designed as virtual From outset, designed as virtual

program available at:program available at: www.sba.gov/hubzone

Covers:Covers: Application for CertificationApplication for Certification Recertification Recertification Program ExaminationsProgram Examinations Contracting Officer AssistanceContracting Officer Assistance

55

HUBZone ContractingHUBZone Contracting Set-aside awards Set-aside awards (HUBZone Rule of Two)(HUBZone Rule of Two) Sole source awardsSole source awards Awards through full and open competition after Awards through full and open competition after

application of 10% price evaluation preference application of 10% price evaluation preference (PEP). Applied if ‘other than small’ apparent (PEP). Applied if ‘other than small’ apparent successful offeror.successful offeror.

Subcontracting Opportunities Subcontracting Opportunities

66

Federal Government-wide Federal Government-wide

Prime HUBZone Contracting Awards by Fiscal YearPrime HUBZone Contracting Awards by Fiscal Year FY 1999FY 1999 Goal - 1%Goal - 1% Actual - not available Actual - not available FY 2000FY 2000 Goal – 1.5% Actual - $663.3M (.33%)Goal – 1.5% Actual - $663.3M (.33%) FY 2001FY 2001 Goal – 2.0%Goal – 2.0% Actual - $1.7 B (.72%) Actual - $1.7 B (.72%) FY 2002FY 2002 Goal – 2.5%Goal – 2.5% Actual - $1.7 B (.71%) Actual - $1.7 B (.71%) FY 2003FY 2003 Goal – 3.0%Goal – 3.0% Actual - $3.4 B (1.23%) Actual - $3.4 B (1.23%) FY 2004FY 2004 Goal – 3.0%Goal – 3.0% Actual - $4.8 B (1.59%) Actual - $4.8 B (1.59%) FY 2005FY 2005 Goal – 3.0%Goal – 3.0% Actual - $6.1 B (1.94%) Actual - $6.1 B (1.94%)

Latest verified FPDS-NG dataLatest verified FPDS-NG data FY 2006FY 2006 Goal – Goal – 3.0% 3.0% (about $10 billion)(about $10 billion)

Actual - Actual - 2.1% 2.1% (($7.1 billion)$7.1 billion)

77

HUBZone Set-Aside Contracts --HUBZone Set-Aside Contracts --Evolutionary LanguageEvolutionary Language

Statutory – PL 105-135Statutory – PL 105-135 Regulatory – 13CFR 126Regulatory – 13CFR 126 Federal Acquisition Regulation – Subpart 19.13Federal Acquisition Regulation – Subpart 19.13

‘HUBZone Rule of Two’

88

SBA Reauthorization (PL 105-135)SBA Reauthorization (PL 105-135)Title VI – HUBZone Act of 1997Title VI – HUBZone Act of 1997

Public Law 105-135, encompassing HUBZone Act of Public Law 105-135, encompassing HUBZone Act of

1997, contains this clause:1997, contains this clause: ““Notwithstanding any other provision of law, a contract Notwithstanding any other provision of law, a contract

opportunity opportunity shall be awardedshall be awarded . . . on the basis of . . . on the basis of competition restricted to qualified HUBZone small competition restricted to qualified HUBZone small business concerns if the contracting officer has a business concerns if the contracting officer has a

reasonable expectation that not less than 2 qualified reasonable expectation that not less than 2 qualified

HUBZone small business concerns will submit offers and HUBZone small business concerns will submit offers and that the award can be made at a fair market price.”that the award can be made at a fair market price.”

Appears in 15 U.S.C. 658(b)(2)(B).Appears in 15 U.S.C. 658(b)(2)(B).

99

Regulatory – 13CFR 126Regulatory – 13CFR 126

§ 126.607 When must a contracting officer set aside a requirement for § 126.607 When must a contracting officer set aside a requirement for

qualified HUBZone SBCs?qualified HUBZone SBCs? (a) The contracting officer first must review a requirement to determine (a) The contracting officer first must review a requirement to determine

whether it is excluded from HUBZone contracting pursuant to §126.605. whether it is excluded from HUBZone contracting pursuant to §126.605. (b) If the contracting officer determines that §126.605 does not apply, the (b) If the contracting officer determines that §126.605 does not apply, the

contracting officer shall set aside the requirement for HUBZone, 8(a) or contracting officer shall set aside the requirement for HUBZone, 8(a) or

SDVO SBC contracting before setting aside the requirement as a small SDVO SBC contracting before setting aside the requirement as a small

business set-aside. business set-aside. (c) If the contracting officer decides to set aside the requirement for (c) If the contracting officer decides to set aside the requirement for

competition restricted to qualified HUBZone SBCs, the contracting officer competition restricted to qualified HUBZone SBCs, the contracting officer

must: must: • (1) Have a reasonable expectation after reviewing SBA's list of qualified HUBZone SBCs that (1) Have a reasonable expectation after reviewing SBA's list of qualified HUBZone SBCs that

at least two responsible qualified HUBZone SBCs will submit offers; and at least two responsible qualified HUBZone SBCs will submit offers; and

• (2) Determine that award can be made at fair market price. (2) Determine that award can be made at fair market price.

1010

FAR 19.1305(a) HUBZoneFAR 19.1305(a) HUBZoneSet-Aside ProceduresSet-Aside Procedures

First paragraph, first sentence:First paragraph, first sentence:• A participating contracting officer A participating contracting officer shallshall set aside set aside

acquisitions exceeding the Simplified Acquisition acquisitions exceeding the Simplified Acquisition Threshold for competition restricted to HUBZone small Threshold for competition restricted to HUBZone small business concerns… business concerns…

• HUBZone set-asides shall be considered before HUBZone set-asides shall be considered before HUBZone sole-source awards or small business set-HUBZone sole-source awards or small business set-asidesasides

1111

MYTH #1. It’s difficult to identify HUBZone firms when conducting market MYTH #1. It’s difficult to identify HUBZone firms when conducting market research to establish a basis for a HUBZone set-aside. research to establish a basis for a HUBZone set-aside.

• Reality: It's actually quite simple to identify HUBZone firms through the Reality: It's actually quite simple to identify HUBZone firms through the following sources:following sources:

• HUBZone Home PageHUBZone Home Page https://eweb1.sba.gov/hubzone/internet/

• (aka – (aka – www.sba.gov/hubzone)• Use ‘Contracting Officer’s HUBZone Gateway’Use ‘Contracting Officer’s HUBZone Gateway’

• Central Contractor Registration/Dynamic Small Business Source System Central Contractor Registration/Dynamic Small Business Source System (CCR/DSBSS) (CCR/DSBSS)

http://www.ccr.govhttp://www.ccr.gov

Four Common Myths That Severely Impact HUBZone Contract Opportunities

1212

MYTH #2. The HUBZone portfolio is composed of small, MYTH #2. The HUBZone portfolio is composed of small, undercapitalized, low-tech service and construction firms.undercapitalized, low-tech service and construction firms.

• Reality: The HUBZone portfolio of over 13,000 firms Reality: The HUBZone portfolio of over 13,000 firms includes capability in virtually every NAICS code includes capability in virtually every NAICS code procured by the Federal Government. HUBZone procured by the Federal Government. HUBZone Portfolio includes:Portfolio includes:

• 931 firms with annual revenue of $10 million+ 931 firms with annual revenue of $10 million+ • 620 firms with over 100 employees 620 firms with over 100 employees • 141 clothing manufacturers 141 clothing manufacturers • 498 machine shops498 machine shops• 1,177 computer service firms 1,177 computer service firms

Four Common Myths Severely Impacting HUBZone Contract Opportunities cont’d

1313

MYTH #3. The ‘HUBZone Rule of Two’ does not apply to procurement actions MYTH #3. The ‘HUBZone Rule of Two’ does not apply to procurement actions that were formerly set-aside for small business (aka -- historical small business set-that were formerly set-aside for small business (aka -- historical small business set-asides) asides)

• Reality: There is no exemption to the ‘HUBZone Rule of Two’ for historical Reality: There is no exemption to the ‘HUBZone Rule of Two’ for historical small business set-asides. The ‘HUBZone Rule of Two’ is based upon small business set-asides. The ‘HUBZone Rule of Two’ is based upon specific language found in The HUBZone Act of 1997, the FAR, SBA’s specific language found in The HUBZone Act of 1997, the FAR, SBA’s regulations, Federal Court rulings and GAO decisions. All historical small regulations, Federal Court rulings and GAO decisions. All historical small business set-asides are subject to the ‘HUBZone Rule of Two’ requirement.business set-asides are subject to the ‘HUBZone Rule of Two’ requirement.

MYTH #4. Movement of a historical small business set-aside to a HUBZone set-MYTH #4. Movement of a historical small business set-aside to a HUBZone set-aside cannot be accomplished until a small business impact study is conducted. If aside cannot be accomplished until a small business impact study is conducted. If it is determined that the proposed HUBZone set-aside will “impact” a small it is determined that the proposed HUBZone set-aside will “impact” a small business (former contract awardee), then the requirement cannot be issued as a business (former contract awardee), then the requirement cannot be issued as a HUBZone set-aside. HUBZone set-aside.

• Reality: Unlike the 8(a) Program, there is no requirement to conduct an Reality: Unlike the 8(a) Program, there is no requirement to conduct an impact study when a procurement is moved from a small business set-aside impact study when a procurement is moved from a small business set-aside to a HUBZone set-aside to a HUBZone set-aside

Four Common Myths Severely Impacting HUBZone Contract Opportunities cont’d

1414

Quick Market Search ToolQuick Market Search Tool Next time you are on CCR’s Dynamic Small Next time you are on CCR’s Dynamic Small

Business Search function, try this:Business Search function, try this:

1515

Quick Market Search cont’dQuick Market Search cont’d So how does it work?So how does it work?

• Basically, you fill in one or two data fields and press ‘Search.’Basically, you fill in one or two data fields and press ‘Search.’

1616

Quick Market Search cont’dQuick Market Search cont’d What do I get for NAICS 323110 (Commercial Lithographic What do I get for NAICS 323110 (Commercial Lithographic

Printing) in less than 3 seconds?Printing) in less than 3 seconds?

1717

Now it’s time for Now it’s time for thethe

Questions and RepliesQuestions and Replies

The HUBZone ProgramThe HUBZone Program