Small Business Administration HUBZone Program, Robert Jay Dilger, Senior Specialist in American National Government October 15, 2010
“The Small Business Administration (SBA) administers several programs to support small businesses, including the Historically Underutilized Business Zone Empowerment Contracting (HUBZone) program. The HUBZone program is a small business federal contracting assistance program “whose primary objective is job creation and increasing capital investment in distressed communities.” It provides participating small businesses located in areas with low income, high poverty rates, or high unemployment rates with contracting opportunities in the form of “set- asides,” sole-source awards, and price-evaluation preferences. In FY2009, the federal government awarded contracts valued at $13.1 billion to HUBZone certified businesses, with $3.4 billion of that amount awarded through the HUBZone program. The program’s total administrative cost is an estimated $11.7 million. In FY2010, it received an appropriation of $2.2 million, with the additional cost of administering the program provided by the SBA’s appropriation for general administrative expenses. Congressional interest in the HUBZone program has increased in recent years, primarily due to U.S. Government Accountability Office (GAO) reports of fraud in the program. Some Members have called for the program’s termination. Others have recommended that the SBA continue its efforts to improve its administration of the program, especially its efforts to prevent fraud. This report examines the arguments presented both for and against targeting assistance to geographic areas with specified characteristics, such as low income, high poverty, or high unemployment, as opposed to providing assistance to people or businesses with specified characteristics.”
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