Snowe and Bond Call on GAO to Review HUBZone Program
WASHINGTON, DC – Senate Committee on Small Business and Entrepreneurship Ranking Member Olympia J. Snowe (R-ME) and Senator Kit Bond (R-MO) yesterday requested that the Government Accountability Office (GAO) review the Historically Underutilized Business Zone (HUBZone) program administered by the Small Business Administration. Congress created the HUBZone program in 1997 to promote economic development and employment growth in distressed rural and urban areas by facilitating access to Federal contracting opportunities. Unfortunately, Federal agencies have routinely failed to meet the program’s statutory contracting goal of awarding 3 percent of prime contracts to HUBZone small businesses.
“I am deeply concerned about the underutilization of the HUBZone program,” said Senator Snowe. “According to the Federal Procurement Data System, just 1.94 percent of prime contracts are going to HUBZone small businesses. That’s far less than the 3 percent goal Congress has set. Moreover, out of Maine 41,026 small businesses, only 118 are HUBZone firms. Clearly, the HUBZone program is not realizing its potential and could be more effective.”
“Small businesses are frequently at a disadvantage when it comes to government procurement,” said Senator Bond. “We created the HUBZone law specifically to give these companies government contracting preference in return for locating and providing critically-needed jobs in our nation’s cities. Unfortunately, the SBA is not carrying the load in implementing this important program.”
The letter Senators Snowe and Bond sent requests that GAO:
•Examine the barriers that inhibit small business from utilizing the HUBZone program;
•Analyze the obstacles that Federal agencies are encountering in implementing the HUBZone program to award contracts to certified HUBZone firms;
•Recommend legislative or regulatory proposals to increase small business utilization of the HUBZone program, as well as to mitigate any implementation difficulties facing Federal agencies; and
•Propose recommendations to ensure that economically depressed areas of the country are properly classified as HUBZones.
Senators Snowe and Bond have requested that GAO provide a timeline for a response within 30 days.
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