The Historically Underutilized Business Zone (HUBZone) Program is a Small Business Administration (SBA) initiative designed to encourage small businesses to operate within and employ individuals from economically disadvantaged areas of the United States. Participation in the program offers competitive advantages when bidding on federal contracts, including potential set-aside contracts and price evaluation preferences. The program aims to direct approximately $23 billion in annual contracting opportunities to HUBZone-certified businesses, though the federal government has not consistently met its goal of awarding 3% of total federal contract dollars to these businesses. Qualification hinges primarily on business location and employee residency, rather than ownership characteristics, making geographic location a key competitive factor. The HUBZone map is updated every five years, with the most recent revisions taking effect on July 1, 2023, and the next scheduled for July 1, 2028.
HUBZone Program Benefits
The government limits competition for specific contracts to businesses located in HUBZones. Additionally, HUBZone-certified businesses receive a 10% price evaluation preference when competing for full and open contracts. Businesses already certified under other socio-economic programs can still compete for contract awards under those programs while also benefiting from HUBZone eligibility. The program represents a significant opportunity, with agencies actively seeking HUBZone contractors to meet federal spending goals. Top contracting agencies include the Army, Department of Veterans Affairs, Defense Logistics Agency, Department of Homeland Security, and Navy, with the largest opportunities found in construction, IT services, and professional services.
Qualification Requirements
To qualify for the HUBZone program, a business must meet four core criteria. First, it must meet the SBA’s size standards for its primary North American Industry Classification System (NAICS) code, based on either employee count or annual receipts. Second, the business must be at least 51% owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, an Alaska Native corporation, a Native Hawaiian organization, or an Indian tribe. Third, the business’s principal office must be located within a designated HUBZone. Finally, at least 35% of its employees must reside in a HUBZone. Detailed qualification criteria are outlined in Title 13 Part 126 Subpart B of the Code of Federal Regulations (CFR).
HUBZone Geographic Designations
HUBZone designations include Governor-Designated Covered Areas, Qualified Disaster Areas, and Redesignated Areas. Qualified Disaster Areas are nonmetropolitan counties affected by presidentially declared disasters and remain eligible for up to five years post-disaster. Redesignated Areas are former HUBZones where businesses with long-term leases (10+ years) or property ownership can maintain eligibility. The HUBZone map is reevaluated and updated every five years, with the last update occurring on July 1, 2023. Businesses should verify their location’s status using the SBA’s HUBZone map lookup tool to ensure continued eligibility.
Challenges to Maintaining HUBZone Certification
Maintaining HUBZone certification presents several challenges. The 35% employee residency requirement is often the most difficult to meet and sustain. Strategies to address this include local hiring within HUBZone areas, offering remote work options to employees residing in HUBZones, and careful workforce planning. Changes to a business’s principal office location can terminate certification unless the move is to another HUBZone or the business has 10-year protection due to a long-term lease or property purchase. Regular monitoring of HUBZone map updates is crucial, as areas can lose their designation when economic conditions improve. A grace period and 10-year protection are available for property owners in redesignated areas, but proactive monitoring remains essential.
Multiple Certifications and Strategic Considerations
Holding multiple certifications can expand a business’s competitive opportunities, as some contracts are set aside for multiple program types. The HUBZone program is unique among SBA socioeconomic programs in its emphasis on geographic location for both the business’s principal office and its employees. This requirement distinguishes it from programs focused primarily on ownership characteristics.
Recent Program Changes
As of October 2025, the HUBZone program requirements and map designations are subject to change. Businesses should verify current program details and their specific location’s HUBZone status using the official SBA HUBZone map at maps.certify.sba.gov/hubzone/map before pursuing certification.
Conclusion
The HUBZone program offers significant opportunities for U.S. small businesses operating in economically disadvantaged areas. Qualification requires meeting specific criteria related to business size, ownership, location, and employee residency. Maintaining certification demands ongoing attention to employee residency requirements and HUBZone map updates. The program’s emphasis on geographic location distinguishes it from other SBA socioeconomic programs, making it a unique avenue for accessing federal contracting opportunities. Businesses should consult the official SBA resources and the HUBZone map to determine eligibility and stay informed about program changes.