Friday, January 25, 2008

What is a HUBZone?

The U.S. Small Business Administration manages a number of programs intended to assist small businesses in accessing Federal contracts.

One such program is the HUBZone program, established by legislation authored by Missouri Senator Kit Bond, among others, in 1997-98.

H = Historically
U = Underutilized
B = Business

Are urban, rural, and tribal communities that have high unemployment rates and high poverty rates. In urban areas, they are defined by qualified Census tracts. In rural areas, they are typically defined by entire counties.

HUBZone areas in Metropolitan St. Louis:


Please note: the HUBZone mapping application functions well in Microsoft Internet Explorer, but not consistently in Mozilla Firefox. So, use IE to check addresses to determine HUBZone location.

There is a two-part test to determine small business eligibility for HUBZone certification.

1) Principal Office must be located in HUBZone
Principal Office = Location where largest number of employees report to work

2) At least 35% of employees must reside in a HUBZone

You must apply online for HUBZone certification. Simply being located in a HUBZone is insufficient; you must be certified by SBA as a HUBZone firm in order to be eligible for HUBZone set-aside contracts, or to qualify toward contracting agency and prime contractor HUBZone goals.

Of course, before you can do this, you must have a currently valid profile on Central Contractor Registration (CCR).

Questions about HUBZone? Contact MO PTAC.

Thursday, January 3, 2008

Getting Started with Government Contracting

It is important to have realistic expectations when starting to pursue government contracts for your business.

Some factors to consider:

*Is the government buying what I sell?
*How much of my product is the government buying?
While it is true government buys just about everything, it may not be in sufficient quantities to make it a significant portion of your business. Or, it may be such large scale that it would be difficult for you, as a small business, to complete the order/task.

*How long have I been in this business?
Past performance is a crucial component in evaluation of government contracts, especially at the Federal level. You need to be in business at least two years for most government contracts, and your company's past performance needs to be closely related to the industry in which you are submitting a bid. While there are always exceptions to the rule, if you are currently selling automotive spare parts, it is unlikely you will get a contract for selling computer software to the government.

*How much time am I willing to devote to pursuing government business?
Ideally, you could employ a full-time staffer for government sales. This is not always possible, and is unrealistic in a firm of five or fewer employees. So, often you will end up doing a lot of the legwork yourself, as the business owner. Also, even if you are not the one making all the marketing contacts, you will be the one signing off on the bids, so you want to make sure whatever you propose is something you can really do. After all, if you win a bid but fail to perform on the contract, you will probably lose not only that contract, but any future possibilities to get contracts from that agency and quite possibly from any Federal agency.

*Am I willing to provide information about my business to the government?
Depending on the size and type of contract, various Federal labor laws apply to Federal contractors that may not apply to other businesses. Sometimes this requires you to submit detailed information about who works for you and how much they are paid. Also, if you pursue a Federal certification such as 8(a)/SDB, the Small Business Administration may ask you for detailed information about the financial status of your business. State and local Minority-Business Enterprise and Women-Business Enterprise certifications typically require a site visit to ensure the business is legitimately owned and operated by a minority individual or by a woman.

*Am I current on my tax obligations to the government?
If you fall behind on payments to the IRS, those payments can be garnished from your contract. Similarly, if you fall behind on State tax payments such as unemployment insurance, State contracts may pay you less as a result of similar garnishment structures. It is especially important for government contractors to keep a close watch on your accounting practices and timely payment of taxes and other government obligations.

If you have further questions about these and other government contracting related issues, please contact us.