On September 27th, President Obama signed the Small Business Jobs and Credit Act. This new legislation means that businesses in Historically Underutilizied Business Zones (known as HUBZones) are on equal footing with all other small, disadvantaged business programs, including, but not limited to, those relating to Service-Disabled, Veteran Owned Small Businesses and 8(a) companies.
Why it matters to the GovCon space?
Written by: Jeff White, Founder at govWin
This was a much needed clean up from a sloppy legislative drafting. While we will see the full impact of this down the road, there are some basic points to take into account. Today one of the hardest to secure set aside status for government contractors is HUBZone – capable, competent contractors that possess this status/certification to help them meet their goals. So, even with this change, I would fall back to the rule that cream rises to the top and a capable HUBZone company with good quals will not find this change to adversely impact their businesses. It still comes down to marketing your company, your capabilities, and your ability to demonstrate value to the government and teaming partners.
Written by: Rich Wilkinson, VP, Government Contracting, Deltek
Basically, if a market survey showed there to be two or more qualified HUBZone contractors for a given procurement the statute said that the Contracting Officer “shall” set the procurement aside for the exclusive participation of HUBZone firms. The equivalent statute for all other set-aside categories said the Contracting Officer “may” set the procurement aside. Two different protests this year were WON by companies on the argument that they should have been HUBZone solicitations and weren’t. HOWEVER, even though GAO sided with the contractor in both cases based on the interpretation of the statute, the Agencies involved IGNORED GAO because of a Justice Department opinion memo that the difference in the statutory language was nothing more than a “legislative typo” that should be fixed. Congress did just that and the whole controversy should be over.
The GAO decisions NEVER resulted in any increase in HUBZone procurements and the “fix” that Coongress put in place probably won’t result in any decrease.
The fact that a GAO investigative team successfully obtained HUBZone certifications for a Starbucks store address and a post office box, neither one of which represented a real company, has much more potential to adversely affect the HUBZone program than the “may/shall” language.
Written by: Lori Erdman, Business Development, Federal Services, Marathon TS, Inc
The HubZone program is the ONLY small business program that stimulates economic growth in depressed areas. Other socio-economic statuses do not provide this opportunity. Historically, there have been more set asides for other small business categories than there have been for HubZone companies so therefore, there should be preferential treatment to “catch up” with the others as well as to increase the job growth rate.”
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