What is the 35% rule in the HUBZone program?

A certified HUBZone firm must have at least 35% of its employees residing in a HUBZone — an ongoing requirement, not a one-time qualification.

What advantage does HUBZone certification give?

Access to HUBZone set-aside and sole-source awards, plus a price-evaluation preference against non-HUBZone large businesses in full and open competition.

Can a HUBZone designation change?

Yes. SBA updates the map of qualifying zones periodically, so an area's HUBZone status — and a firm's eligibility tied to its principal office location — can change over time.

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Procurement term

HUBZone

An SBA program giving contracting preferences to small businesses located in, and employing residents of, Historically Underutilized Business Zones.

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What is HUBZone?

The HUBZone program (Historically Underutilized Business Zones) is an SBA initiative that promotes economic development in designated geographic areas by giving participating small businesses preferences in federal contracting. To qualify and stay certified, a firm must have its principal office located in a HUBZone, be at least 51% owned and controlled by US citizens (or qualifying entities), meet the small-business size standard, and ensure that at least 35% of its employees reside in a HUBZone.

Certified HUBZone firms can compete for HUBZone set-aside contracts and receive a price-evaluation preference in full and open competition — meaning their price may be treated as lower by a defined percentage when compared against non-HUBZone large-business offers. Agencies may also make sole-source awards to HUBZone firms within defined ceilings. SBA maintains the map of qualifying zones, which is updated periodically, so a location's HUBZone status can change.

For vendors, HUBZone certification combines a location and workforce commitment with a tangible contracting advantage. The 35% residency requirement is an ongoing obligation, not a one-time test, so firms must monitor compliance continuously. Because zone designations are revised, confirming current HUBZone status of the principal office is part of maintaining eligibility.

Example

A small manufacturer relocates its principal office into a designated HUBZone and ensures 35% of staff live in a HUBZone, then certifies and competes for HUBZone set-aside contracts.

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What is HUBZone?

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