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New-Tech Packaging is proud to have been awarded their HUBZone Certification. In this post, we’ll look at what that means for our clients and us.

What is a HUBZone Certification?

HUBZone stands for the Historically Underutilized Business Zones program. This program makes it easier for small businesses across the country to access federal procurement opportunities. The goal is to create an incentive to employ people in designated HUBZone areas.

What is a HUBZone Area?

This is a zone in one of the following areas:
• A census tract that fits the definition listed in the 1986 Internal Revenue Code
• A non-metropolitan county that meets the definition in terms of the same code
• Areas that fall within lands that the federal government recognizes as Indian reservations
For an area to qualify, it must also fit the following criteria:
• The average household income must be lower than 80 percent of the average for the state, or
• The unemployment rate must be at least 140 percent higher than that of the median for the state.
The Department of Labor provides the data. The SBA only considers recent data.
The communities affected have limited access to job opportunities.

Who Qualifies for the Certification?

Businesses may apply if they create job opportunities in the designated HUBZones. To qualify, all companies must meet the criteria as laid out below:
• It must meet the classification of a small business as defined by the Small Business Administration, typically companies with 500 staff or less. Turnover generally has to be less than $7.5 million per year.
• The majority ownership and control of the company must be in the hands of American citizens. The SBA also considers areas owned by an Indian tribe or a farmer’s cooperative.
• The zone has to be a dedicated HUBZone. Indian tribal lands and towns with defunct military bases fall into this category.
• Thirty-five percent of the company’s employees must live in this zone.

How Does the Program Operate?

The Small Business Administration runs the program. The SBA:
• Vets businesses to see whether or not they’re eligible to participate.
• Keeps a list of businesses that are certified and makes it available to federal agencies to enable them to find a good match.
• Keeps Congress updated on how successful the program has been. Includes information on the number of new job opportunities created and the renewed investment in the designated areas.
• Reassesses declined cases where the applicant objects to the initial ruling.

The Benefits of HUBZone Certification

Businesses benefit because they have access to:
• Sole-source contracting
• A price evaluation preference
• Access to federally funded prime contracts. And, by implication, a steady source of income.

Final Notes

This program assists companies that are investing in communities where fewer opportunities exist. These investments are vital to local economies because better job prospects revitalize communities. The businesses themselves benefit by having access to a broader range of good contracts. The clients benefit because these contracts allow businesses to improve their operations. The community benefits because they have better access to employment. It’s a win-win-win.