HUBZone Small Business Summit Welcome & Opening Comments - PDF document

HUBZone Contractors National Council HUBZone Small Business Summit April 26, 2017 HUBZone Small Business Summit Welcome & Opening Comments Summit April 26, 2017 - Philadelphia John Armstead  Acting Deputy Regional Administrator  Region 3  U.S. Environmental Protection Agency Federal Small Business Programs HUBZone Program Overview & Update BUSINESS ASSISTANCE PROGRAM Small Disadvantaged Business / 8(a) OWNERSHIP-BASED PROGRAMS Woman-Owned Small Business Service-Disabled Veteran-Owned ECONOMIC DEVELOPMENT PROGRAM Historically Underutilized Business Zone (HUBZone) HUBZone is the only set-aside program based on location and employment, rather than ownership status. HUBZone Success Stories HUBZone Success Stories ECONOMIC DEVELOPMENT DEPT SYNTELLIGENT ANALYTIC SOLUTIONS Page County, Virginia Leesburg, Virginia HUBZone-certified in 2012 with its principal The Town of Leesburg has leveraged its office in Luray, Virginia, with 13 employees. HUBZone areas to serve as incubators for By 2016, company employed 70 people. small companies. Spends close to $500,000 in the community More than 40 companies are participating in annually. the program – and 32 of them are start-ups. Created 27 new jobs in the HUBZone. More than 20 of them have obtained their 6 former part-time employees have moved to HUBZone certification. full-time positions with other companies. And they have created more than 200 new jobs for the town. hubzonecouncil.org 1

HUBZone Contractors National Council HUBZone Small Business Summit April 26, 2017 HUBZone Map HUBZone Success Stories sba.gov/hubzone Census Tracts (74,130) EVERY DOLLAR  16,368 (23%) are HUBZone-qualified  917 will expire in 2018 SPENT ON A  928 will expire in 2019 HUBZONE CONTRACT CREATES JOBS also Indian Land, DDAs, BRACs & Major Disaster Areas Counties (3,243) FOR THOSE WHO 1,217 Metro Counties – not qualified  3-year ‘redesignation’  1,259 Non-Metro Counties – not qualified NEED THEM MOST .  516 Non-Metro Counties are qualified period for map changes  251 Non-Metro Counties are qualified but will expire by 2020 HUBZone Program HUBZone Program Certification Requirements Certification Requirements  The firm must be a small business according to the Case Study: HUBZone-Qualified? size standards based on the North American Industry Classification System (NAICS).  Small Business: based on SBA size standards.  The firm must be at least 51% owned and controlled by  Ownership: 100% owned by the CEO, a US citizen. citizens of the United States (or a community  Principal Office: development corporation, an agricultural cooperative,  3 full-time employees, including the CEO, work in its or an Indian tribe). headquarters office which is not located in a HUBZone.  The firm's principal office (where the greatest number  4 full-time employees, plus 1 part-timer (who works 20 hours per week), work at an office facility in another of employees perform their work, excluding contract state but it is in a HUBZone. sites) must be located in a designated HUBZone area.  1 full-time employee works from home.  At least 35% of the firm's total workforce must reside  1 full-time employee works at a client site. in a designated HUBZone area.  Employee Residency: NO FIXED CERTIFICATION PERIOD  1 headquarters employee lives in a HUBZone.  2 other office facility employees plus the part-timer live Must Maintain Requirements to Remain Certified in a HUBZone. Maintaining HUBZone Certification Maintaining HUBZone Certification If your business is HUBZone-certified and there are no changes There is no limit to the length of time you can be qualified as a during your certification, you have (almost) no reporting HUBZone small business. You may remain certified as long as you obligations to SBA. However, you must report all material continue to follow the HUBZone regulations and notify SBA of any changes to SBA because they may affect your eligibility in the material changes. HUBZone Program. Report material changes to hzmcn@sba.gov. Every 3 years, SBA will ask you to formally recertify your status, What is considered a material change? either by signing a form or submitting new documentation.  Change in ownership Always be prepared to defend against potential status challenges.  Change in business structure  Change in principal office If you fall out of compliance with HUBZone requirements, you should voluntarily decertify. You can reapply after a 90-day waiting period  Failure to maintain the 35% employee HUBZone residency once you requalify. requirement ACCURATE RECORD-KEEPING IS CRITICAL. ACCURATE RECORD-KEEPING IS CRITICAL. hubzonecouncil.org 2

HUBZone Contractors National Council HUBZone Small Business Summit April 26, 2017 HUBZone Company Profile HUBZone Company Profile Number of HUBZone-Certified Firms  Industries – Most NAICS Codes 10,000  Services 45% 9,000  Construction 35% 8,000 7,000  Manufacturing 12% 6,000  Research & Development 8% 5,000  Located in all 50 States, DC, & 4,000 3,000 Territories 2,000  Average Number of Employees 1,000 0 per Company = 12 Spr Fall Spr Fall Spr Fall Spr Fall Spr Fall Spr Fall Spr 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 HUBZone Spending - Agencies HUBZone Spending - Dollars Fiscal 2016* – by General NAICS Category Prime HUBZone Contracts - FY16* Building Construction $6.9 billion = 1.67% of total eligible dollars Manufacturing Government-Wide Spending Goal = 3% $6.9 billion Information Technology DOLLAR VOLUME ($mil) – Top Agencies SPENDING PERCENTAGES – HZ Goal Met  Defense $4,000  Transportation 10.07% Facility Support  Small Business Administration 6.54%  Homeland Security $584  Veterans Affairs $366  Interior 4.91% Administrative Support  Health & Human Services $243  Securities & Exchange Commission 4.57%  Treasury 4.47%  Agriculture $233 Building Trades  Transportation $206  Commerce 4.33%  State $203  Homeland Security 4.19%  Smithsonian Institution 4.09% Hwy & Bridge Construction  Commerce $194  General Services Administration $164  General Services Administration 3.90%  Agriculture 3.87%  Interior $149 All Other Categories  Office of Personnel Management 3.19%  Treasury $135 * Unofficial data as of January 2017. Source: smallbusiness.data.gov. * Unofficial data as of January 2017. Source: smallbusiness.data.gov. HUBZone Spending - Percentages HUBZone Spending - Percentages SUBCONTRACTING GOAL ACHIEVEMENT 3.0% -------------------------------------- GOAL -------------------------------------- 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2008 2009 2010 2011 2012 2013 2014 2015 Source: sba.gov/content/small-business-procurement-scorecards-0 hubzonecouncil.org 3

HUBZone Contractors National Council HUBZone Small Business Summit April 26, 2017 Improving HUBZone Spending: HUBZone Spending - Percentages Generating More HUBZone Opportunities  HUBZone Firms  The phone is not likely to ring because you are HUBZone-certified.  Market your capabilities and experience – and then offer your HUBZone status as value-added.  Educate contracting officers about the program and its benefits – job creation & economic development.  Research and respond to Sources Sought & RFI requests. Develop informal groups of friendly competitors to share opportunities and respond.  Maintain certification documentation. Improving HUBZone Spending: Improving HUBZone Spending: Generating More HUBZone Opportunities Generating More HUBZone Opportunities  All-Small Mentor-Protégé Program  Agencies & Primes  Technical, financial & management support  HUBZone firms service all NAICS codes – they’re not just construction & maintenance companies.  Subcontracting  The best HUBZone opportunities provide for  Joint Ventures (for set-asides) work to be done at the HUBZone firm’s office  Agencies can provide contracting & location. evaluation incentives to mentors  HUBZone firms tend to be quite small, so you  Only 1 mentor at a time – 2 allowed per might need to do some extra market research protégé and/or extend response times for Sources Sought  6-year maximum relationship (3-yrs + 3-yr ext) and RFIs.  1-year minimum  The HUBZone Program is not strange or risky. HUBZone Future Outlook HUBZone Future Outlook  Recent SBA Actions  Strategic Alliance Memorandum  Congressional Action  No More Tax Returns for Application  2016: Redesignation  20% Cap on QCTs Lifted  New Mapping System in 2017 increase from 3 to 7 years  Improved Application System in 2017 passed the Senate but failed  Policy Priorities – HUBZone Council in the House (twice)  Provide More Business Certainty  Increase Redesignation Period from 3 to 7 Yrs  2017: HUBZone  Support Capital Investment of Principal Office Modernization is on the  Simplify Employee Residency Requirement agendas of House & Senate  Streamline Certification Process  Modernize Eligibility Formulas small business committees  Review Criteria to Determine HUBZone Eligibility  Support Removal of 20% QCT Cap in Metro Areas hubzonecouncil.org 4