HUBZone Redesignations Looming on October

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The next batch of redesignated HUBZone areas is set to lose HUBZone status as of October 1. HUBZone-certified firms located in an expiring HUBZone will be decertified from the HUBZone program unless they have moved their principal office to an eligible HUBZone by October 1.

HUBZone boundaries are fluid, with changes driven by census data and other statistics that are regularly updated. When new information causes a HUBZone location to lose HUBZone status, that area will no longer qualify for the HUBZone program. To soften the blow for HUBZone firms operating in a redesignated area, SBA permits the location to remain HUBZone-eligible for three additional years.

There has been some talk of extending this so-called “grandfathering” period by a few additional years, but right now it stands at three years. Therefore, the locations that are set to expire from the HUBZone program on October 1 actually lost HUBZone status three years ago—it is the three-year grandfather period that runs out as of October 1. 

Firms located in redesignated areas that have not relocated their principal office locations should also be mindful of any HUBZone set-aside proposals they have pending. Since a firm must be in compliance with all HUBZone eligibility criteria on both the date of proposal submission and date of contract award, awards of pending HUBZone set-aside contracts will need to be issued prior to October 1 in order for these firms to meet the award date eligibility criteria.
  
You can tell if you are in a redesignated HUBZone area by searching your address on the SBA website. The website will designate if your address is in a redesignated area and will also tell you when the three-year grandfather period expires.

For firms looking to move from an expiring HUBZone, or if you are thinking of starting a new HUBZone firm, it is important to check your prospective address in SBA’s database to determine if the address you choose is in a redesignated area.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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