Delegation “Extremely Concerned” about SBA HUBZone Changes

101 Alaska Businesses Could Lose Contract Opportunities

Washington, D.C. – Alaska’s Congressional Delegation sent a letter to Small Business Administration Administrator Karen Mills expressing serious concern over the decertification of several Historically Underutilized Business Zone (HUBZone) areas in Alaska, which could cost 101 small businesses’ working in the state’s most distressed areas federal contract opportunities statewide.  Firms located in the Aleutians West, Denali, Fairbanks North Star and Matanuska-Susitna boroughs were all notified of this change on October 1st and given only 30 days to respond.

“SBA has given firms 30-days to challenge the validity of this involuntary decertification even though nothing may have materially changed about the underlying business practices,” the delegation wrote. “Small businesses cannot be expected to invest times into a lengthy HUBZone certification process if their year-by-year eligibility is subject to the annual fluctuations of economic statistical data.”

Due to 2010 Census numbers, the Small Business Administration determined that the four boroughs will no longer be considered eligible for the HUBZone program – which provides federal contract preferences to businesses willing to operate in low income, high poverty or high unemployment areas.  However, as the DC delegation points out in the letter, not only is the data used in making this decision not public, but relevant figures from the SBA will not be released until later this year.

To qualify for the HUBZone program, SBA regulations require that a small business concern have its principal office located in a HUBZone, and that at least 35% of its employees reside in a HUBZone.  HUBZones consist of qualified census tracts, qualified non-metropolitan counties, lands within the external boundaries of an Indian reservation, qualified base closure areas, and "redesignated" areas.

Attached is the letter sent by the Alaska delegation to Small Business Administration, Administrator Karen Mills.