Understanding the HUBZone Program

The Historically Underutilized Business Zones (HUBZone) Empowerment Contracting program was enacted into law as part of the Small Business Reauthorization Act of 1997. The program falls under the auspices of the U.S. Small Business Administration. The program encourages economic development in historically underutilized business zones - "HUBZone" - through the establishment of preferences.

SBA's HUBZone program is in line with the efforts of both the Administration and Congress to promote economic development and employment growth in distressed areas by providing access to more federal contracting opportunities.

How did we get there?

In 1996 IceTech was asked by then Mayor of Baltimore City; Kurt Schmoke, can Icetech have a Baltimore city present? We were doing work for the city of Baltimore Md at the time. So, we agreed and made the commitment to relocate our business.

“We were a HUBZone before in came in to Law.”

The impact on our business from the move into the HUBZone area in the first three (3) years alone was 75% of our revenue lost. These losses where contribute from; lost walk-in clients, high crime areas, drugs on the street corners, and other distractions. "Just like at home you have to clean up your house first before you can bring company over".

Yes, we had made a big investment and stuck with it. Now I can say that IceTech has made a big impact in the area. We started with; working with community groups, non-profit groups and community leaders, and the Baltimore police department members also contributed. We even had to talk to the local drug dealers about selling on our corners. It is an enormous risk and investment.   

But what we have learn is that we can make a huge different in improving the community, somebody else’s world and give them a fair chance at life and then I can say we have truly succeed. Is that what we all want for ourselves? To succeed in life someone has to give you an opportunity, a fair shot. And then it is up to you to work hard and to succeed. That is what the HUBZone program means to IceTech.

Things to think about before you want to become a HUBZone company.

"HUBZone is much more than sitting back and trying to receiving set-aside work"

The HUBZone program requires a strong commitment of company resources, both time and money to achieve and maintain compliance and success. This is not a passive set-aside program and the balance to achieve quality and scalability requires constant vigilance of the entire senior management.

The process of securing HUBZone designation is quite rigorous, “It do provide a significant competitive advantage for securing federal contracts, “SBA is committed to maintaining integrity in the program, and so it is subject to strict oversight.”

In order to maintain the HUBZone, at least 35% of your employees must reside in a HUBZone. The company must also maintain its headquarters in a HUBZone, as determined by the U.S. Census data.

Here is what we have accomplished:

To maintain the 35% HUBZone employee requirements, IceTech has committed to the support of education and Training programs. We trained our work force and helped them achieve the certifications in their field. (This has benefit IceTech in lowering our overhead rates to the clients we serve, keeping a better skill work force, while keeping our turnover rate low)

Problems: After we train and hire staff that live in the HUBZone we found out that they move out of the area very quickly, so Icetech had to re-think how we handle train staff. We came up with a new strategy / approach:

• IceTech hired a HUBZone coordinator to manage the 35% HUBZone staff, their duties are to keep a list of HUBZone staff, records of the employees, to provide support, help in housing needs and to make sure IceTech is in compliance of the program.   
• IceTech has created a house ownership program where we find and housing assist funds for our HUBZone staff. Currently we have SMEs and scientist, PHD staff now living right across the street in established neighboring residential gated community.

Lesson learn: It is not enough to just rely on knowing that staff lives in the HUBZone, after an SBA audit, we found that some staff have changed their address location to get better car insurance rate in surrounding counties, but they still live in the HUBZone. SBA said they are no longer consider HUBZone employees. We came up with assistance, bonuses and other benefits.

THE HUBZONE PROGRAM IS A WIN-WIN-WIN INITIATIVE:

• Distressed areas win by an infusion of jobs, investment and economic development.
• Participating Small Businesses win by increased opportunities to do business with the Federal government.
• Federal agencies win by receiving excellent goods and services from small businesses, and contributing to their growth as future partners.

IceTech is an enthusiastic supporter of the HUBZone program (The owner does speaking engagements for Federal customers) and we encourage both Federal agencies, Large business and other small businesses to become more familiar with how they can take advantage of its benefits while helping to contribute to the programs and the worthwhile goals

Final lesson learned: Real HUBZone companies (yes, they are some fake ones we run into at times) are on the frontline of fixing the community, and HUBZone vendors such as us make a big difference in lowering crime in the community that we serve. The secondary roles that we create are the opportunities for people that do not have the resources to advance into good paying job or get the skill set and acquire the experiences.

Without the HUBZone we will see more devastating areas, along with more crime that would spill over to other neighborhoods like yours. You may be a victim or somebody you know. Yes, the HUBZone companies like IceTech are on the front line at Rebuilding America’s Communities and making it safer for all.