The SBA has issued a direct final rule, which was effective October 3, 2016, to amend the HUBZone Program. The changes include (1) authorizing Native Hawaiian Organizations (“NHO”) to own HUBZone small business concerns; (2) expand the HUBZone Program to assist small businesses in disaster areas and base closure areas; and (3) provide equal treatment under the HUBZone Program for small businesses owned by NHOs.

SBA is making these changes to reflect the changes the 2016 NDAA made to the Small Business Act and to avoid public confusion and misinterpretations of SBA’s HUBZone program. The statute makes the following changes:

Expands the HUBZone program to assist small businesses in disaster and base closure areas and provides equal treatment under the HUBZone program for small businesses owned by NHOs.

“Major Disaster” Areas—Treats major disaster areas as HUBZones for a period of 5 years.

“Catastrophic Incident” Areas—Treats areas where catastrophic incidents occurred as HUBZones for a period of 10 years.

Base Realignment and Closure Act (BRAC)—Extends HUBZone eligibility for areas impacted by BRACs to 8 years and expands HUBZone eligibility to census tracts and nonmetropolitan counties (NMCs) that contain facilities closed under BRACs, intersect with BRACs, are contiguous to BRACs, or are contiguous to any census tract or NMC as described above.

Native Hawaiian Organizations (NHO)—Allows small businesses owned by NHOs to qualify as HUBZone companies.

All of the above changes should increase the federal government’s potential to make HUBZone awards.  By broadening the scope of what is considered a HUBZone, it will allow contractors in those applicable areas to qualify for awards under the program.

And for NHOs, it’s a huge win.  They have been asking to be treated like Indian tribes and Alaskan Native Corporations (ANCs) for purposes of the HUBZone program.  Now they will be.