Shaheen: Expand Key Federal Contracting Program to Rural Small Businesses

April 25, 2017

**New legislation allows more rural communities to participate in SBA’s HUBZone program; better access to government contract opportunities**

(Washington, DC) – Seeking to expand a key small business program in rural New Hampshire and across the country, Senator Jeanne Shaheen (D-NH), the lead Democrat on the Senate Committee on Small Business and Entrepreneurship, today introduced the Invest in Rural Small Business Act, legislation to expand the geographic reach of the U.S. Small Business Administration’s (SBA) HUBZone program. The United States government is the world’s largest buyer of goods and services. SBA’s Historically Underutilized Business Zone (HUBZone) program helps small businesses located in urban and rural communities with low household incomes and high unemployment gain preferential access to federal contract opportunities, in turn helping the business expand and create jobs.

“In New Hampshire and across America, many small towns face a lack of economic investment and chronic underemployment. And while the federal government spends billions of dollars buying from small businesses each year, not enough of those contracts are reaching rural entrepreneurs who would disproportionally benefit from the chance to compete,” said Senator Shaheen. “The Invest in Rural Small Business Act will expand the reach of SBA’s HUBZone program so the economic development and job creation linked to a federal contract go to talented Granite State small businesses in our rural towns.”  

Senator Shaheen introduced the bill after being contacted by a company in Claremont, New Hampshire that had difficulty qualifying for the HUBZone program.  After Shaheen’s intervention, Costa Precision Manufacturing became the only manufacturing company in New Hampshire to be a certified HUBZone business.

The current one-size-fits-all formula for determining a HUBZone leaves many otherwise eligible communities outside the program.  The law requires 3 percent of contracts be awarded annually to HUBZone firms, but in 2016, only 1.67 percent of federal contracting dollars were awarded to these businesses. Shaheen’s Invest in Rural Small Business Act expands the pool of HUBZone eligible communities and enhances the program’s ability to be a targeted economic development tool. The legislation: 

  • Empowers governors to directly petition SBA to designate additional rural areas as HUBZones.  Governors are limited to one application per year and must demonstrate the potential for job growth and investment, as well as local interest.

  • Adds flexibility to the program by reducing the number of a small firm’s employees required to live within a HUBZone from 35 to 33 percent, providing relief for rural businesses with geographically dispersed employees.

  • Requires SBA’s HUBZone office to make a decision on a governor’s application within 60 days.