HUBZone Certification + GSA + Subcontracting

By: Admin | Date: 2020-09-17

HUBZone Certification + GSA + Subcontracting

A HUBZone Certification provides a four methods for the award of federal prime contracts:

1. HUBZone Sole Source Contracts
2. HUBZone Set-aside Contarcts
3. HUBZone 10% price preference in competitive bid situations
4. HUBZone + GSA Schedule

These four advantages resulted in $11.8B in federal sales in 2019 for HUBZone firms. This spread among the 7,600 HUBZone firms yields an average of $1.55MM per year average for HUBZone firms. This is significantly higher than the estimated $350K average sales for small businesses without a certification.
These four methods for obtaining contracts are strong. However, HUBZone firm also have the ability to obtain subcontracting opportunities. There is over $109B+ in small business subcontracting work completed by small businesses on Federal Contracts in 2019.

Subcontractor Type 2019 Small Business Subcontracting Goal 2019 SB Subcontracting Achievement SB Subcontracting Difference
Small Business $109.8B $122.6B +$12.8B
HUBZone $11.1B $5.1B -$6.0B

HUBZone firms are underperforming for Subcontracting. However, this still represents an average of $671K in additional revenue per HUBZone firm. Therefore, look for contracting officers to push back harder on their vendors in order to increase the role of HUBZone subcontractors which could easily push this figure to over $1MM for 2020.

When considering if your firm should actively move forward with a HUBZone Certification realize the full picture for a HUBZone firm engaged in federal contracts as seen below.

HUBZone / GSA Holder Average Sales of Firm
HUBZone (only) $1.55MM
HUBZone + GSA Schedule $2.41MM
HUBZone + GSA Schedule + Subcontracting $3.08MM
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