Small businesses must prove they are still 'historically underutilized' for every government contract

The US Small Business Administration has tightened rules for its Historically Underutilized Business Zone (HUBZone) program. Businesses must now prove they qualify as a HUBZone business at the time of every contract offer, not just when they first apply to the program. This means companies cannot keep their HUBZone status if the area they operate in improves economically.

The HUBZone program is designed to direct federal contracts to businesses in economically distressed areas. For years, a business could get certified and keep its status even if the area later improved. This change means that if an area develops, businesses there will eventually lose their special status. This forces the program to focus its benefits on areas that truly need them.