Historically Underutilized Business Zones accelerator program launches in Huntsville

The City of Huntsville and a local non-profit are partnering to build up local HUBZone businesses.

Posted: Jan 23, 2018 6:50 PM
Updated: Jan 23, 2018 7:09 PM

Historically Underutilized Business Zones, or HUBZones, get their certification from the United States Small Business Administration.

The City of Huntsville told WAAY 31 these zones are typically in areas with high levels of unemployment and poverty.

In order to qualify as a HUBZone company, the business must be located in a HUBZone, and 35 percent of that company's employees must live in a HUBZone.

Downtown Huntsville is one area the HUBZone program serves.

According to the Small Business Administration's website, a company would want to become a certified HUBZone since HUBZone businesses have access to more contracting opportunities with the federal government.

The website adds the federal government has a goal of awarding 3 percent of all dollars for federal prime contracts to HUBZone certified small businesses.

The city says this has been profitable for NASA and defense contractors here in Huntsville, with several local HUBZone companies landing contracts with the Department of Defense and the Missile Defense Agency.

However, even with the people the program is putting to work, WAAY 31 found out today not every local HUBZone company is convinced.

"If I had to depend on HUBZone, I'd be out of business," one HUBZone company employee said.

The HUBZone company employee WAAY 31 spoke with today asked to remain anonymous.

He told WAAY 31 the HUBZone program isn't working.

He said it's not because of the city, but because of the federal government.

"It's the government. The government has to make it work if they want it to," the HUBZone company employee said.

He says that awarding 3 percent of federal contract dollars to HUBZone companies is just a goal, and that goal is rarely met.

In his five years as a HUBZone company, he said he's only been awarded one contract set aside for HUBZones.

"If you had a HUBZone, an 8(a) set aside, veteran owned, woman owned, it might be another tick mark. Most of the prime's want somebody with a lot of disadvantaged criteria so that they can one stop shop," the HUBZone company employee said.

The new accelerator program between The City of Huntsville and The Catalyst is hoping to change all that.

The program will provide the resources existing HUBZone companies need in order to be successful.

The business owner we talked with says another issue with HUBZone is the hiring requirement.

Since 35 percent of his employees have to live in HUBZones, which are traditionally in areas of high poverty and unemployment, it's rare to find people who are qualified to do the high-tech work that happens in Huntsville.

That means most of the HUBZone company's employees are working in custodial or administrative assistant positions.

"We don't have the resources to fight it. All you can do is go out and try to get advocacy for it. You don't have the resources or the time to go do that. You can't fight the government," the HUBZone company employee said.

The HUBZone accelerator program began Monday.

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