Competing for federal contracts as a small business in West Virginia can be hard. But in certain situations, one program makes location and size an advantage for Allegheny Surveys and others like it.
The regional land surveying company recently had its contract renewed with the U.S. Army Corps of Engineers, according to Terri Hughart, chief financial officer of Allegheny Surveys. A big reason why the 54-employee company was able to nab that renewal is the HUBZone designation it obtained in 2016, she said.
“The [U.S. Small Business Administration] reached out to us two or three years ago and said we meet a lot of the qualifications for the HUBZone, and if we got that designation, we could see a lot of benefits when the government is looking at hiring contractors,” Hughart said.
The HUBZone, or Historically Underutilized Business Zones Program, is a U.S. Small Business Administration-run program that intends to jumpstart economic development in underserved areas by giving their local businesses priority in federal contracting work. Benefits include sole source contracting opportunities and a 10 percent price evaluation preference for bids.
“It gives chances for companies in economically depressed areas to get work, and if the government is giving them work, these companies are going to give people in their area work,” said George Murray, deputy district director for the SBA’s West Virginia office.
The Department of Housing and Urban Development determines which areas of the country should be designated as part of the HUBZone primarily by measuring household income and unemployment rate, which updates at least every five years, Murray said. Businesses must be located within a HUBZone area, be considered “small” by SBA standards and have at least 35 percent of employees residing in a HUBZone, among other requirements, in order to be eligible for program application.
With West Virginia’s economic struggles, a large portion of the state is designated as HUBZone-eligible, including several southern and central counties and parts of cities like Charleston, Huntington and Morgantown.
Allegheny Surveys has four locations in West Virginia, but its Alum Creek office may be the most reliant on federal contracts, according to Wes Miller, a design technician at the Alum Creek location. Miller showed a recent survey Allegheny Surveys made of Paint Creek Lake in Ohio for the U.S. Army Corps of Engineers, so the corps could see what areas they could safely flood as part of flood control efforts.
“We’ll do work for coal companies, but obviously that’s been limited lately,” he said. “Federal contracts usually pay better.”
Allegheny Surveys isn’t alone in its HUBZone certification. Thirty-six West Virginia firms are currently certified, according to SBA data obtained Friday. Only one of those firms is headquartered in Charleston, while Martinsburg, Morgantown and Bridgeport house multiple certified firms.
Information technology services made up the majority of the firms’ specialties, with construction, mapping and design services also making multiple appearances. Nationally, building construction makes up a large portion of HUBZone contractors, with infrastructure development and IT services also making the SBA’s Top 10.
Greenbrier Government Solutions, an Oceana-based information technology services company, is nearing a deal to be a subcontractor for technical services in 84 countries for the Centers for Disease Control and Prevention’s Center for Global Health — in all, a $250 million deal on a five-year contract for the involved contractors, according to CEO Scotty Johnson.
Johnson said the primary contractor on the deal, ACS Group, invited the 12-employee company aboard partly because of the HUBZone designation. The program is particularly advantageous for small businesses looking for subcontracting work, Johnson said, because the federal government aims to award 3 percent of its prime contract dollars to HUBZone-certified businesses, according to the SBA website.
Primary contractors like ACS Group looking to sweeten their offer by bringing HUBZone-certified businesses into the fold is a common practice, Murray said, and it allows firms with just a handful of employees to take part in massive projects.
Continuing to take advantage of the HUBZone after landing a big contract will require a balancing act, Johnson said. Due to the HUBZone-residing employees requirement, the company will be location-conscious when bringing on additional staff members to fulfill the additional workload.
“The hard part is maintaining [the HUBZone designation],” Johnson said. “Once we hire so many people, we need to make sure there are enough Oceana people and people like that.”
Johnson added that Greenbrier Government Solutions has roughly 40 percent of its employees residing in a HUBZone, but added that much of IT service work can be done virtually, making proximity to the company’s Oceana headquarters only an advantage in the sense of keeping its HUBZone status.
Rose’s Excavating, an excavation contractor in Pocahontas County, obtained HUBZone certification in 2010, years before Allegheny Surveys and Greenbrier Government Solutions. Vicki Rose of Rose’s Excavating said other area businesses were obtaining contracts that it didn’t have a chance to get. A U.S. Forest Service representative suggested obtaining HUBZone certification may open up those opportunities, she said.
Today, Rose’s Excavating doesn’t see much work through the HUBZone program, because the business wants to just take jobs that are within Pocahontas County or nearby counties, Rose said. But there has been occasional work such as a contract with the U.S. Forest Service for renovations on Nicholas County campgrounds, she said.
“We’re small, so we don’t really have the opportunity to go really far,” she said. “It really depends on the business for using [the HUBZone program].”
The HUBZone program isn’t flawless yet, Murray said. He said oftentimes small businesses become HUBZone-certified and expect federal agencies to reach out to them right away for a nearby contracting job. When that doesn’t happen, they get frustrated and don’t renew their certifications, he said.
“They need to understand how to market themselves and how federal agencies buy, so they can be better business partners,” Murray said.
Still, the program is much improved upon its original iteration when the first firm was HUBZone-certified in 1999, Murray said, such as recently modernizing the certification process so it can be done entirely online. The program has also made adjustments as to what qualifies as a HUBZone area outside of low-income counties and census tracts, adding communities surrounding closed military bases and federally designated disaster areas to the mix, he said.
To assist in outreach and communication for small businesses, the SBA is planning to schedule government contracting sessions for 2018 in the next couple of weeks, according to spokeswoman Nikki Bowmar. Session details will be posted at sba.gov/offices/district/wv/clarksburg. Further information on the HUBZone program as a whole can be found at sba.gov/contracting/government-contracting-programs/hubzone-program.
Reach Max Garland at firstname.lastname@example.org, 304-348-4886 or follow @MaxGarlandTypes on Twitter.