Hubbub About HUBZones

Builders and Contractors Exchange
Weekly Bulletin: 30 nov 2010

Hubbub About HUBZones
By: Gretchen Baker

LAW TIPS

An August 2010, decision by the Court of Federal Claims may create additional opportunities for HUBZone contractors (at least in the short term). In DGR Associates, Inc. v. United States, the Court of Federal Claims issued a decision regarding a contract awarded by the Air Force for base housing maintenance, inspection services and repairs. The contract, a set-aside for qualified 8(a) contractors, was challenged by DGR Associates (“DGR”), a HUBZone contractor, on the basis that the Air Force failed to give priority to HUBZone contractors over other types of 8(a) contractors, which DGR believed to be Congress’s intent when it created the HUBZone program.

DGR protested the solicitation with the GAO, who agreed with DGR, and in May 2010, issued a recommendation to the Air Force that the solicitation be set aside for HUBZone contractors, provided there was evidence two or more HUBZone contractors could perform the work required by the solicitation for a reasonable price. Following the Air Force’s refusal to follow the GAO’s recommendation, DGR filed an action in the Court of Federal Claims.

The Court of Federal Claims agreed with the GAO and DGR, finding that the statutory language creating the HUBZone program “could not be more clear” that HUBZone entities should be given priority “over other competing small business programs.” The Court also stated that this presumption in favor of awarding contracts to HUBZone entities would be upheld until the time Congress acts to clarify its intent––if it so chooses.

Unless and until Congress takes such action, contracting officers wishing to set aside contracts must first determine whether at least two HUBZone contractors can perform the work for a reasonable price. If so, then the contract must be set aside for HUBZone contractors before other qualified 8(a) contractors can be considered. Although it is likely Congress will issue some sort of clarification in the near future, until then, it’s a great time to be a HUBZone contractor!

Authored by attorneys, these articles are meant to bring awareness to these topics and are not intended to be used as legal advice. For more information, contact Bill Franczek at 757-446-8600. Visit www .vanblk.com, for our library of Construction Law Tips. Suggestions for a topic? E-mail bfranczek@vanblk.com.