1. HUBZone and NHO Enterprises: What You Need To Know
PilieroMazza PLLC
888 17th Street, NW, 11th Floor
Washington, DC
Tel: (202)
Fax: (202)
HUBZone and NHO Enterprises: What You Need To Know
John Shoraka
PilieroMazza
July 27, 2017

2. Overview Preparing for a smooth certification process
PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
Overview
Preparing for a smooth certification process
Taking full advantage of the HUBZone program
Maintaining eligibility/avoiding pitfalls
Looking ahead
Size
Multiple ways that affiliation can arise
Key is when one firm controls or has the power to control the other, or a third party or parties control or have the power to control both, even if this control is not exercised (13 C.F.R. § )
Affiliates
Special affiliation concerns related to employees and principal office calculations (we will address later)
© PilieroMazza 2017

3. Preparing for a Smooth Certification Process
PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
Preparing for a Smooth Certification Process
© PilieroMazza 2017

4. Make Sure You Meet the Eligibility Criteria!
PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
Make Sure You Meet the Eligibility Criteria!
Must be a SMALL business
Size of a firm includes any affiliates
Can have affiliates, but must be small combined
Special affiliation rules for NHOs
Size
Multiple ways that affiliation can arise
Key is when one firm controls or has the power to control the other, or a third party or parties control or have the power to control both, even if this control is not exercised (13 C.F.R. § )
Affiliates
Special affiliation concerns related to employees and principal office calculations (we will address later)
© PilieroMazza 2017

5. HUBZone Eligibility Criteria for Firms Owned by US Citizens
PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
HUBZone Eligibility Criteria for Firms Owned by US Citizens
Must be owned and controlled at least 51% by a U.S. citizen
“Principal office” must be located in a HUBZone
At least 35% of employees must live in a HUBZone
© PilieroMazza 2017

6. HUBZone Eligibility Criteria for NHO-Owned Firms: Ownership
PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
HUBZone Eligibility Criteria for NHO-Owned Firms: Ownership
Firm must be:
The concern must be wholly owned by one or more NHOs, or
by a corporation that is wholly owned by one or more NHOs, or
owned in part by one or more NHOs, if all other owners are either United States citizens or small business concerns.
© PilieroMazza 2017

7. Eligibility Criteria for NHO-Owned Firms: Other Requirements
PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
Eligibility Criteria for NHO-Owned Firms: Other Requirements
Size: Firm, together with its affiliates, must be small under its primary industry
Business concerns owned and controlled by NHOs, or wholly-owned entities of NHOs are not considered affiliates of the NHO.
Business concerns owned and controlled by NHOs, or wholly-owned entities of NHOs are not considered to be affiliated with other concerns owned by NHOs because of their common ownership or common management. In addition, affiliation will not be found based upon the performance of common administrative services so long as adequate payment is provided for those services.
Principal office and HUBZone employees:
Maintain a principal office located in a HUBZone and ensure that at least 35% of its employees reside in a HUBZone.
Also, firm must “attempt to maintain” that applicable employment percentage stated above during the performance of any HUBZone contract it receives.
© PilieroMazza 2017

8. “Principal Office” and “Employee”
PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
“Principal Office” and “Employee”
“Principal office” means the location where the greatest number of the concern’s employees at any one location perform their work (13 C.F.R. § )
“Employee” means all individuals employed on a full- time, part-time, or other basis, so long as that individual works a minimum of 40 hours per month
However, for those concerns whose “primary industry” is service or construction, the determination of principal office excludes the concern’s employees who perform the majority of their work at job-site locations to fulfill specific contract obligations
Includes temporary, leased, or “co- employed” employees
Also includes owner, even if no compensation is received
© PilieroMazza 2017

9. Understand the Application Process
PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
Understand the Application Process
Verify eligibility
Gather supporting documentation
Review sample HUBZone application form
Review and ask questions
Access SBA’s General Login System
Soon to be certify.SBA.gov
Complete and submit online HUBZone application
Submit any requested supporting documentation
About 25% of applications are denied, a figure deemed “unacceptable” by the SBA
Must wait 90 days after denial before being able to re-apply
SBA statistics demonstrate that more “established” firms typically have greater success in the Program
Not a business development program like 8(a) Program
Only 30% of HUBZone-certified firms in the SBA’s portfolio have HUBZone contracts, most do not get work
Hard to stay compliant with all Program criteria
© PilieroMazza 2017

10. Documents You Will Need
PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
Documents You Will Need
General business information
Appropriate NAICS codes
DUNS number
Proof of principal office location, such as lease agreement
Business and personal federal tax returns for the last three years
Official payroll records and other information showing employees residing within HUBZones (drivers licenses, HUBZone maps, etc.)
Business ownership documentation – articles of incorporation, LLC, etc.
Citizen documentation for owners (if individually owned)
Other information supporting HUBZone eligibility requirements
SAM.gov profile
© PilieroMazza 2017

11. Taking Full Advantage of the HUBZone Program
PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
Taking Full Advantage of the HUBZone Program
© PilieroMazza 2017

12. Taking Advantage of HUBZone Program
PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
Taking Advantage of HUBZone Program
10% Price Evaluation Preference for Full and Open Competitions
Cautions:
Open to protest
Does not apply to subcontracting goals
Receipt of performance can subject firm to presumed loss liability
Competitive and sole source opportunities
Participation in new All Small Mentor-Protégé Program
Joint Venturing
© PilieroMazza 2017

13. Looking Ahead PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
Looking Ahead
© PilieroMazza 2017

14. Changes Are Coming 90-day target for processing new applications
PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
Changes Are Coming
90-day target for processing new applications
Overhaul of regulations to be published sometime soon, on SBA’s regulatory agenda
Uptick in number of IG investigations
Site visits of about 10% per year of all HUBZone participants will continue
Reduce full document reviews from once every three years to once every six years?
Seven year grace period after re-designation
© PilieroMazza 2017

15. Questions? John Shoraka ajshoraka@pilieromazza.com 202-857-1000
PilieroMazza PLLC
HUBZone and NHO Enterprises: What You Need To Know
Questions?
John Shoraka
PilieroMazza PLLC
888 17th Street, NW, 11th Floor
Washington, DC
Tel: (202)
© PilieroMazza 2017