Hearing Report: A Review and Assessment of the SBA’s HUBZone Program

 Hearing Report: A Review and Assessment of the SBA’s HUBZone Program

Subcommittee on Contracting and Infrastructure

House Small Business Committee

July 14, 2022

 

For HUBZone certified companies and their advocates, some of the discussion in this hearing was admittedly tough to listen to. Members of Congress listened to the testimonies of HUBZone Contractors National Council Chair, Shirley Bailey, attorney Matt Schoonover, and business owners Brent Lillard and Inés Rivas-Hutchins, who talked about the importance of the HUBZone program and offered suggestions to improve and expand the program. The Chair of the Subcommittee, Kweisi Mfume (D-MD) mentioned his impatience with small business contracting issues saying that the Congress hears the same feedback from small companies but doesn’t act to fix them. Our witnesses agreed—this was not the first time they have offered suggestions on how the program could be better utilized by federal agencies. 

Rep. Scott Fitzgerald (R-WI) took the discussion one step further by asking whether the HUBZone program is worth continuing or should it be scrapped and start all over again. Ouch. Brent Lillard’s response was that offering suggestions on program improvements should not be interpreted as a call to get rid of the program. Instead, the witnesses offered the following suggestions: 

• Stop “double counting” by federal agencies. In other words, if the agency awards a contract to a HUBZone company but it is headed by a woman—the award shouldn’t be counted toward its women-owned goal and the HUBZone goals. Pick one.
• Apply the HUBZone price evaluation preference to task orders. This bill passed the House on June 8, and the Senate needs to act.
• Expand sole source contract opportunities for HUBZone companies. Get rid of the justification requirements that stifle awards to HUBZone companies (and everyone else except 8(a) program participants).
• Expand training of the acquisition workforce to better understand small business contracting programs.
• Expand the Highway Trust Fund to include HUBZone businesses.
• Modernize the employee requirement of 35% requiring residence in a HUBZone for a period over 180 days. Not that this wasn’t out of touch before COVID, but since COVID –worker shortages and the demise of “9-5 in the office 5 days a week” suggest this change is imperative.
• Expand “Attempt to Maintain” to all contracts. In other words, allow companies to show a good faith effort to meet the requirement that 35% of all employees must reside in a HUBZone area. Alternative: change the 35% requirement entirely.
• Require 1 federal agency to prioritize HUBZone contracts to increase awards – HUBZone First.

If Congress and the SBA listens to these witnesses and their suggestions, there is no doubt more companies would pursue the HUBZone certification. Federal agencies must also increase their buying from these companies. Inaction on both fronts will simply produce the current unsatisfactory results.