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HUBZone contracting. (Small Business Briefs).

A report released November 7, 2002, by the Department of Defense (DOD) Office of the Inspector General (IG) finds fault with prime contractor utilization of HUBZone businesses during fiscal years 2000 and 2001. The report was requested by Congress, which is concerned that DOD prime contractors are neglecting this program.

The DOD IG reviewed compliance by 16 prime contractors with their subcontracting plans and goals. For FY 2000, the legislatively mandated goal was 1.5 percent of prime contract dollars, and for FY 2001, 2 percent. For FY 2002, the goal is 2.6 percent, and in FY 2003 it is 3 percent. The report contains some interesting facts:

* Eight prime contractors overstated their FY 2001 HUBZone small business subcontracting awards by 77 percent. The other eight did not report any HUBZone subcontracting awards.

* The overstatement is a result of subcontractors who incorrectly represented themselves as HUBZone certified, prime contractors who did not verify their status, and the cognizant Defense Contract Management Agency, which did not sufficiently monitor prime contractors' subcontracting programs. The report notes that, in part, the trouble lies in the Small Business Administration's (SBA) inability to process HUBZone applications in a timely manner.

* One contractor reported "nonexistent HUBZone subcontracting awards," and one contractor was not aware that it should not report non-certified HUBZone concerns.

Report D-2003-019, "DOD Contractor Subcontracting with Historically Underutilized Business Zones (HUBZones) Small Businesses," can be found at

About the Author

DONNA S. IRETON, Fellow, is director of the Acquisition Management Consulting and Training Group. Advanced Systems Development. Inc., in Saratoga, California. She was the NCMA national president from 1998 to 1999 and is currently a member of the Washington, D.C., Chapter. The author invites readers to call her at 408/868-1699,orsend e-mail to, if they experience any difficulties pursuing information given in this article.

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Title Annotation:reports finds fault with prime contractor utilization of HUBZone businesses during fiscal years 2000 and 2001
Author:Ireton, Donna S.
Publication:Contract Management
Geographic Code:1USA
Date:Feb 1, 2003
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