Overview
This section outlines the requirements and mandatory procedures for Contracting Officers (COs) to set aside federal acquisitions for HUBZone small business concerns. It establishes the "Rule of Two" criteria for HUBZone competition and details the formal appeal process available to the Small Business Administration (SBA) if a set-aside recommendation is rejected.
Key Rules
- The Rule of Two: A set-aside is required when there is a reasonable expectation that at least two HUBZone small business concerns will submit offers and the award can be made at a fair market price.
- Order of Precedence: COs must consider HUBZone set-asides before considering HUBZone sole-source awards or general small business set-asides.
- Single Offer Scenario: If only one acceptable offer is received from a HUBZone concern, the CO should still make the award to that firm.
- Withdrawal Procedure: If no acceptable HUBZone offers are received, the set-aside must be withdrawn and the requirement should be considered for a general small business set-aside.
- SBA Appeal Rights: The SBA may appeal a CO’s decision not to set aside an acquisition; the CO must suspend action during the appeal unless "urgent and compelling" circumstances are documented.
- Strict Timelines: The SBA has 5 business days to notify the CO of an intent to appeal and 15 business days to file the formal appeal with the head of the agency.
Practical Implications
- Market Research is Critical: Contracting Officers must perform thorough market research specifically targeting HUBZone firms to justify either the use of a set-aside or the decision to bypass the HUBZone program for a general small business set-aside.
- Procurement Delays: Agencies face significant schedule risks if the SBA disagrees with a set-aside decision, as the formal appeal process triggers a mandatory stay of the acquisition.