Deadline looms for Summit County businesses to get HUB Zone status
September 1, 2009
Bidding on government contracts is no easy task, but it’s easier for businesses in Summit County.
Because of a few demographic factors in the early 1990s, Summit County was granted status as a "Historically Underutilized Business Zone," or HUB Zone for short. According to Nancy erly, business development specialist for the Small Business Administration, that allows small businesses within the zone to get preferential treatment in bids for government contracts.
For many of the projects, only HUB Zone businesses may apply. For others, small businesses receive preference if they are within 10 percent of the lowest bid by a large company. These jobs pay up to $500,000, she explained. Sometimes, for jobs offering less than $100,000, only small businesses may apply.
Almost every agency in the Federal government is required to dedicate some projects to small HUB Zone businesses, she said.
Companies must apply for the status, however. Some of the criteria are that the business must be at least 51 percent owned and controlled by U.S. citizens, and that 35 percent of the employees must live within the zone.
Unfortunately, most experts believe Summit County will lose that status after the next census. Right now it’s guaranteed through January 2011. Because the median income of the county is so much higher than that of the state, the new rules will likely exclude the area in about 2012.
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The Veterans Trading Company in Park City has been using its status since 2005 to secure jobs.
Jack Climer, president, said the program has been good to the company. It went from being insignificant to doing millions in sales in a short period of time. Still, he said he’s got mixed feelings about the program and the way it’s administered.
Overall, however, Climer said getting any kind of diversity status is beneficial in the contracting industry.
"It gets you appointments. It gets you through the door," he said.
Large corporations doing business with the government have requirements to subcontract with small businesses and those with diversity status. That means they have liaisons at the company whose job it is to meet you, he said.
"When you have a classification," he explained, "they’re looking for you It’s a built-in door to meet these people."
Climer guessed that close to 20 percent of government spending is earmarked for small contractors.
"If you make it easier for these companies to find you, they’ll find you and do business with you," he said.
Ken Block, director of business development for MCM Productions, wants every entrepreneur to know about the county’s status even though he’s never been able to take advantage of it.
MCM Productions sells promotional materials. It doesn’t have enough competitors in HUB Zones for the government to get the requisite number of bids, so the projects he wants to do always seem to disappear.
Still, he thinks the opportunity to be designated a HUB Zone business is great.
For other businesses, it differentiates them in the quest for projects. For his own business, it’s given him credibility.
"It’s helped open the doors more in Salt Lake City by virtue of the fact that we’ve taken the time to qualify ourselves with these differentiations," he said.
He sees it as similar to the "Good Housekeeping" seal of approval that didn’t really mean anything except that going through the effort to get the status validates your enterprise, he said.
"You’ve taken the time, therefore it puts you in a different category from the 20 other people the purchasing agent is looking at," he said.
According to a press release, just last Tuesday the U.S. Small Business Administration launched a new online training course to help strengthen access to contracting opportunities for small businesses, including those owned by women, minorities, disadvantaged individuals and veterans, a press release said. The Recovery Act Opportunities course is available on SBA’s web site at http://www.sba.gov/fedcontractingtraining . The course is indexed by subject matter to allow ease of use, and it includes multiple direct links to additional contracting resources.
For more information, visit http://www.sba.gov/hubzone