HUBZone firms get preference for set-asides

One word in the acquisition regulation lifts the Historically Underutilized Business Zone (HUBZone) program above all other small-business programs.


According to a recent ruling on a protest, the Government Accountability Office said agencies must give precedence to the HUBZone small-business program before using the other set-aside programs. A contracting officer “shall set aside acquisitions" to HUBZone small businesses, GAO wrote in its report, citing the Federal Acquisition Regulation.


And in contrast, “a contracting officer may award contracts” to service-disabled, veteran-owned small businesses (SDVOSB), the FAR states. GAO announced its decision in September.

As a result of "shall" versus "may," the GAO said the FAR requires set-aside precedence for HUBZone businesses.

“To interpret the statutes otherwise, as in effect creating parity between the programs, would fail to give effect to the clear language of the HUBZone statute,” the GAO wrote.

The decision “materially strengthens the argument that HUBZone set-asides have priority over any other set-aside program and must be followed when there are two or more qualified HUBZone bidders,” the HUBZone Council said in a Nov. 6 press release.

The protest stemmed from an objection by International Program Group (IPG), a HUBZone small business, to a decision by the Marine Corps to buy pre-deployment training services on a sole-source basis from Veteran Government Services through the SDVOSB set-aside program. IPG contended that the Marines failed to consider a HUBZone set-aside first. The GAO agreed, saying the Corps' contracting office should have initially considered it.

“With this GAO ruling, it will be much easier for federal agencies to begin to empower America’s poverty-ridden communities by using the HUBZone program to create good paying jobs where America needs them the most,” the council said.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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