52.219-3 Notice of HUBZone Set-Aside or Sole-Source Award
Source: FAR 52.219-3 on acquisition.gov
For HUBZone set-asides and sole-source awards, only SBA-certified HUBZone small businesses—or qualifying joint ventures that meet SBA size and 40% workshare rules—can compete for and receive the contract.
Overview
- FAR 52.219-3 establishes the clause used when a procurement is restricted to Historically Underutilized Business Zone (HUBZone) small business concerns or awarded to a HUBZone concern on a sole-source basis.
- Its purpose is to ensure that only properly certified HUBZone firms compete for and receive these awards, including certain multiple-award contract components and orders.
Key Rules
- HUBZone eligibility and certification
- A contractor must be a small business concern certified by the Small Business Administration and listed in SBA’s List of Qualified HUBZone Small Business Concerns under 13 CFR 126.103.
- Applicability of the clause
- The clause applies to HUBZone set-asides, HUBZone sole-source awards, HUBZone-reserved portions of multiple-award contracts, HUBZone set-aside orders under FAR 8.405-5 and 16.505(b)(2)(i)(F), and certain direct orders to HUBZone firms under FAR 19.504(c)(1)(ii).
- Offer and award restrictions
- Agencies may solicit offers only from HUBZone small business concerns, and offers from non-HUBZone firms cannot be considered. Any resulting award must go to a HUBZone small business concern.
- Joint venture requirements
- A joint venture may qualify if at least one venturer is a HUBZone small business concern meeting 13 CFR 126.616(c), and each venturer is small under the solicitation’s size standard, or the protégé is small in an SBA-approved mentor-protégé joint venture.
- Performance of work
- In a HUBZone joint venture, HUBZone small business party or parties must perform at least 40 percent of the aggregate work done by the joint venture, and that work must be substantive, not merely administrative.
Responsibilities
- Contracting Officers: Include the clause in covered solicitations and awards, limit competition to eligible HUBZone concerns, and evaluate joint venture eligibility where applicable.
- Contractors: Maintain HUBZone certification, verify size status, structure joint ventures properly, and ensure required workshare is performed by HUBZone venturers.
- Agencies: Enforce HUBZone eligibility rules for set-asides, sole-source awards, and applicable multiple-award contract orders.
Practical Implications
- This clause protects the integrity of the HUBZone program by reserving opportunities for certified HUBZone small businesses.
- Contractors must confirm eligibility before submitting an offer, especially in joint venture arrangements where size, certification, and workshare rules are common compliance risks.
- A frequent pitfall is assuming a joint venture qualifies automatically; the parties must meet SBA requirements and the HUBZone member’s work must be meaningful.
As prescribed in 19.1309(a), insert the following clause:
Notice of HUBZone Set-Aside or Sole-Source Award (Oct 2022)
(a) Definitions.
HUBZone small business concern, as used in this clause, means a small business concern, certified by the Small Business Administration (SBA), that appears on the List of Qualified HUBZone Small Business Concerns maintained by the SBA (https://www.govinfo.gov/content/pkg/CFR-2024-title13-vol1/xml/CFR-2024-title13-vol1-sec126-103.xml" target="_blank">13 CFR 126.103).
(b) Applicability. This clause applies only to-
(1) Contracts that have been set aside or awarded on a sole-source basis to, HUBZone small business concerns;
(2) Part or parts of a multiple-award contract that have been set aside for HUBZone small business concerns;
(3) Orders set aside for HUBZone small business concerns under multiple-award contracts as described in 8.405-5 and 16.505(b)(2)(i)(F); and
(4) Orders issued directly to HUBZone small business concerns under multiple-award contracts as described in 19.504(c)(1)(ii).
(c) General.
(1) Offers are solicited only from HUBZone small business concerns. Offers received from concerns that are not HUBZone small business concerns will not be considered.
(2) Any award resulting from this solicitation will be made to a HUBZone small business concern.
(d) Joint venture. A joint venture may be considered a HUBZone concern if—
(1) At least one party to the joint venture is a HUBZone small business concern and complies with https://www.ecfr.gov/current/title-13/section-126.616#p-126.616(c)" target="_blank">13 CFR 126.616(c); and
(2) Each party to the joint venture qualifies as small under the size standard for the solicitation, or the protégé is small under the size standard for the solicitation in a joint venture comprised of a mentor and protégé with an approved mentor-protégé agreement under the SBA mentor-protégé program.
(e) A HUBZone joint venture agrees that, in the performance of the contract, at least 40 percent of the aggregate work performed by the joint venture shall be completed by the HUBZone small business parties to the joint venture. Work performed by the HUBZone small business party or parties to the joint venture must be more than administrative functions.
(End of clause)