GOVERNMENT CONTRACTS, CONSTRUCTION AND PROCUREMENT POLICY PRACTICE GROUP
E-NEWS — OCTOBER 18, 2005
Prime Contractors Must Now Confirm Status of
HUBZone Subcontractors
Pursuant to a recently issued interim regulation, as of July 27, 2005, all government contractors with
small business subcontracting plans must confirm that a subcontractor representing itself as a
Historically Underutilized Business Zone ("HUBZone") small business concern is certified by the Small
Business Administration. Prior to the issuance of the interim rule, contractors could simply rely on their
subcontractors’ representations that they were a HUBZone small business.
This change is the result of a DOD Inspector General finding that contractors were overstating actual
HUBZone subcontract awards by failing to verify subcontractor representations. It also follows an April
22, 2005 change to the small business certification process which made SBA responsible for
establishing the certification of all HUBZone small business concerns as opposed to simple selfcertification.
For contractors, this will require additional due diligence in obtaining accurate information regarding
HUBZone subcontractors. Previously, many companies simply collected HUBZone subcontractor data
by way of an annual vendor survey and certification process. It remains to be seen whether SBA will
continue to push for more active "enforcement" of small business subcontracting plans by contractors.
The full text of the interim rule may be found in the Federal Register at 70 Fed. Reg. 43581 (July 27,
2005). http://www.gpoaccess.gov/fr/
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