HUBZone preference debate may end
Obama's signature would end semantics-induced confusion
The debate over whether a law lays out a first preference for
certain small businesses when setting aside contracts is likely ending.
The House passed the Small Business Jobs and Credit Act
(H.R. 5297), which includes a provision that would end confusion over
whether companies in Historically Underutilized Business Zones, known
as HUBZones, are supposed to get first preference over other categories
of business, such as service-disabled veteran-owned small businesses,
when agencies set aside a contract.
The bill would change “shall” to “may” in a section of the Small Business Act.
A HUBZone legal battle erupts over a single word
GAO, White House still at loggerheads over HUBZone rulings
Federal court rebuffs Obama on small-business preferences
Judge upholds HUBZone priority
The House passed the bill 236 to 187. The Senate passed it Sept.
16. The bill now goes to President Barack Obama for his signature.
After the House’s vote, the president said he would sign the bill Sept. 27.
Since 2009, the administration has faced off with the Government
Accountability Office and Court of Federal Claims over the HUBZone
The law states that a contracting officer “shall” award a set-aside
contract to a HUBZone small business. However, the statute states that
a contracting officer “may” award a set-aside contract to another type
of small company. In other words, contracting officers must first check
for eligible HUBZone companies that could do the work. If there were
none, the contracting officer could look for other types of small
The administration said the “shall” in the statute is not a mandate
because that wasn’t Congress’ intent in the Small Business Act. GAO
officials and the court’s judges said the statute is law and the
wording is clear.
Matthew Weigelt is a former FCW senior writer who covered acquisition and procurement.