Power Law Office

HUBZone set-asides

Posted by Tim on 1 February 2009 | 0 Comments

In recent months there have been many comments made on the GAO decision in September and published in November 2008 holding HUBZone set-asides mandatory.See GAO decision Among these are The HUBZone Council., Washington Technology,and INPUT

However, a Federal district court ruled HUBZones mandatory in 2003 in Contract Management, Inc. v. Rumsfeld 291 F. Supp 2d, 1166 (D. HI 2003); and this was aff’d, 434 F.3d 1145 (9th Cir. 2006).

The mandatory requirement for HUBZone set-asides means that they must be considered before veterans set-asides, 8(a) set-asides (under some circumstances) and general small business set-asides.

We were involved in the earlier litigation and following the court decisions I have advised business concerns how to qualify for this HUBZone preference and how to use this preference to their advantage. Since the court decisions in 2003 our HUBZone qualified clients have objected to any acquisitions that did not apply a HUBZone set-aside. In most cases this resulted in the agency changing the set-aside to a HUBZone set-aside.

In order to require a contract opportunity be set-aside for a HUBZone set-aside, it is only necessary that an agency have a reasonable expectation that there will be at least two HUBZone companies competing for the contract at a reasonable price. If those two criteria are present, then the agency must use a HUBZone set-aside.

In many small business NAICS code categories there are so many qualified HUBZone businesses registered with the SBA that it is almost impossible for an agency not to have a reasonable expectation that there will be at least two HUBZone companies competing at a reasonable price.

The optimum time for qualified HUBZone businesses to contact agencies about a HUBZone set-aside is when a pre-solicitation notice is issued. Often these notices ask for responses from several small business categories such as 8(a), veterans, etc. At this time a qualified HUBZone business can ask that the solicitation be set-aside for HUBZone businesses. If there is a reasonable expectation of two HU&BZone business responding to the notice then the solicitation must be set-aside for HUBZone participation. This greatly reduces the competition a company must overcome to win the award.