Strengthening the HUBZone Program

GAO’s recent review of the Historically Underutilized Business Zone (HUBZone) program—which provides federal contracting assistance to small businesses located in economically distressed communities, or HUBZone areas—highlighted several deficiencies in the Small Business Administration’s (SBA) management of the program.

• Among other things, GAO found that the map SBA uses to help firms determine if they are located in a HUBZone area is inaccurate.
• In addition, the steps that SBA takes to certify and monitor HUBZone firms provide limited assurance that only eligible firms participate in the program. For example, GAO found that SBA verifies the information reported by firms on their application or during recertification—its process for monitoring firms—in limited instances and does not follow its own policy of recertifying all firms every 3 years.

^ Back to topWhat Needs to Be Done

SBA needs to take a number of steps to improve its oversight of the HUBZone program.

• SBA, through its mapping contractor, updated its HUBZone map in September 2008. However, SBA does not have a process in place to ensure that the map remains accurate.
• The agency needs to ensure that only eligible businesses participate in the program. For example, it needs to develop and implement guidance that requires more routine verification of data that businesses submit during the application process. Though SBA eliminated the backlog of recertifications in September 2008 by hiring additional staff, it has yet to implement the necessary procedures to ensure that future recertifications are completed in a timely fashion and prevent future backlogs.
• Finally, SBA needs to further assess the effectiveness of the HUBZone program.

  Highlights of GAO-08-643 (PDF)

^ Back to topKey Reports

HUBZone Program

Small Business Administration

U.S. Small Business Administration, Office of Inspector General, HUBZone Program Examination and Recertification Processes, Report Number 6-23 (Washington, D.C.: May 23, 2006).

SBA Inspector General Report 6-23 (PDF, 10 pages) (Note: This link goes to a publication on the SBA Web site.)

More Reports