Empowering Local Economies: The Benefits of Government Procurement with HUBZone Certified Companies in Underutilized Communities

The government procuring products and services from HUBZone certified companies can bring many
benefits to the economy and communities. HUBZone is a program created by the Small Business
Administration (SBA) that aims to promote economic development and job creation in historically
underutilized business zones (HUBZones). These areas are typically located in urban and rural
communities that have been affected by unemployment, poverty, and low-income. By doing business
with HUBZone companies, the government can help to revitalize these areas and improve the standard
of living for residents.

One of the main advantages of procuring from HUBZone companies is that it helps to create jobs and
stimulate economic growth in these communities. HUBZone companies are required to have at least
35% of their employees living in a HUBZone, which means that by doing business with these companies,
the government is directly supporting job creation and economic development in these areas.
Additionally, HUBZone firms are also required to maintain their principal office within a HUBZone,
ensuring that the economic benefits are sustained in the area over the long term.

Another benefit of procuring from HUBZone companies is that it can lead to increased competition and
lower costs for the government. HUBZone companies are often small businesses that may not have the
same resources as larger companies, but they can still provide high-quality products and services at
competitive prices. This can ultimately lead to savings for taxpayers. Furthermore, HUBZone firms have
a price evaluation preference in full and open competition, which means that when they bid on
contracts, their prices are evaluated as lower than non-HUBZone firms, even when the non-HUBZone
firm’s price is lower. This can lead to more favorable prices for the government.

In addition to these benefits, procuring from HUBZone companies can also promote diversity and
inclusion in government contracting. By working with a variety of businesses, including those owned by
women, minorities, and veterans, the government can ensure that all members of society have an
opportunity to participate in the economy.

The government has a statutory requirement of 3% of total procurement from HUBZone firms, which
means that procuring from HUBZone companies can not only help the government meet its obligations,
but also make a significant impact on the local communities and economy.

However, it is important to note that procurement from HUBZone companies is not always easy. Many
HUBZone firms may not have the same level of experience and capacity as larger firms, and may require
additional support and assistance. Government agencies should actively seek out HUBZone firms and
provide them with the resources and support they need to successfully compete for government
contracts. Additionally, the government can also encourage prime contractors to subcontract with
HUBZone firms, which can provide opportunities for HUBZone firms to gain experience and capacity.

An important reason why the government should choose an HUBZone company over an 8a, women-
owned or SD-VOSB business is that HUBZone companies are specifically targeted at promoting economic
development and job creation in historically underutilized business zones. These areas are typically
located in urban and rural communities that have been affected by unemployment, poverty, and low-
income, and by doing business with HUBZone companies, the government can help to revitalize these
areas and improve the standard of living for residents.

In contrast, 8a, women-owned, and SD-VOSB businesses do not have specific geographical requirements
and may not have the same impact on underutilized communities. Therefore, by prioritizing HUBZone
companies, the government can ensure that it is making a direct and targeted impact on these
communities, rather than just supporting small businesses in general.

It is also important to note that while the 8a, women-owned, and SD-VOSB businesses have specific set-
aside for them, HUBZone program provides additional benefits such as price evaluation preference in
full and open competition, which means that when they bid on contracts, their prices are evaluated as
lower than non-HUBZone firms, even when the non-HUBZone firm’s price is lower. This can lead to more
favorable prices for the government.

In conclusion, while 8a, women-owned, and SD-VOSB businesses are important for promoting diversity
and inclusion in government contracting, HUBZone companies have a specific focus on promoting
economic development and job creation in underutilized communities. By prioritizing HUBZone
companies, the government can ensure that it is making a targeted and meaningful impact on these
communities, while still meeting its statutory requirements and promoting diversity and inclusion.

Overall, procuring products and services from HUBZone companies can bring many benefits to the
economy, communities, and government. It is important that government agencies actively seek out
and do business with HUBZone firms to help them grow and thrive, while at the same time meeting
statutory requirements and promoting economic development in underutilized communities.

Thank you for reading,

Storsoft Technology