FAR 19.1305—HUBZone set-aside procedures.
Plain-English Summary
FAR 19.1305 explains how contracting officers must decide whether to use a HUBZone set-aside and what procedural steps follow that decision. It covers the required order of consideration before setting aside an acquisition, when a HUBZone set-aside may be used for competition restricted to HUBZone small business concerns, the minimum market research findings needed to support the set-aside, what happens if only one or no acceptable HUBZone offers are received, and how the general small business set-aside rules and HUBZone sole-source authority fit into the decision process. It also incorporates the SBA procurement center representative (PCR) review and appeal process when SBA recommends a HUBZone set-aside and the contracting officer rejects that recommendation. In practice, this section is important because it controls both the acquisition strategy and the protest/appeal-like internal review path for HUBZone opportunities, so contracting officers must document their market research and sequencing decisions carefully. Contractors benefit because it determines when a procurement is reserved for HUBZone firms and when an award can still be made after a limited competition response.
Key Rules
Follow priority order first
Before deciding on a HUBZone set-aside, the contracting officer must comply with FAR 19.203. HUBZone set-asides must be considered before HUBZone sole-source awards and before general small business set-asides.
Use set-aside only with adequate expectation
A HUBZone set-aside for competition restricted to HUBZone small business concerns is permitted only when the contracting officer reasonably expects at least two HUBZone offers and expects award at a fair market price.
Applies above micro-purchase threshold
The contracting officer may set aside acquisitions exceeding the micro-purchase threshold for HUBZone competition. The rule is framed around acquisitions large enough to justify a formal set-aside decision.
Award if one acceptable offer
If only one acceptable HUBZone offer is received in response to a HUBZone set-aside, the contracting officer should award to that concern. The set-aside is not automatically canceled just because competition was limited.
Withdraw if no acceptable offers
If no acceptable HUBZone offers are received, the HUBZone set-aside must be withdrawn. If the requirement is still valid, it should then be set aside for small business concerns as appropriate under FAR 19.203.
PCR and SBA appeal process applies
The procedures in FAR 19.202-1 and 19.402 apply, including SBA’s ability to appeal a rejection of a PCR recommendation to set aside the acquisition for HUBZone competition.
Appeal timing is strict
If SBA intends to appeal, the PCR must notify the contracting officer in writing within 5 business days of receiving the rejection notice. SBA must file the formal appeal within 15 business days, and the agency head must respond within 15 business days.
Action is suspended during appeal
Once the contracting officer receives notice of SBA’s intent to appeal, acquisition action must be suspended until the head of the contracting activity issues a written decision, unless urgent and compelling circumstances justify continuing.
Responsibilities
Contracting Officer
Must follow FAR 19.203 before choosing a HUBZone set-aside, determine whether there is a reasonable expectation of at least two HUBZone offers at a fair market price, decide whether to set aside the acquisition for HUBZone competition, award to the sole acceptable HUBZone offer when appropriate, withdraw the set-aside if no acceptable HUBZone offers are received, and suspend action if SBA appeals unless an urgent-and-compelling determination is made.
SBA Procurement Center Representative
May recommend that an acquisition be set aside for HUBZone competition and, if the contracting officer rejects that recommendation, must notify the contracting officer in writing of SBA’s intent to appeal within 5 business days of receiving the rejection notice.
SBA
Must file its formal appeal with the head of the agency within 15 business days after notifying the contracting officer of intent to appeal, or the appeal is deemed withdrawn.
Head of the Contracting Activity
Must issue a written decision on the appeal before acquisition action resumes, unless the contracting officer has made a written urgent-and-compelling determination allowing action to continue.
Head of the Agency
Must reply to SBA within 15 business days after receiving the formal appeal, and that decision is final.
Agency/Acquisition Team
Must support the contracting officer with market research, acquisition planning, and documentation needed to justify the HUBZone set-aside decision and to respond properly if SBA challenges the decision.
Practical Implications
This section makes market research critical: the contracting officer needs enough evidence to support a reasonable expectation of at least two HUBZone offers and a fair market price before setting aside the buy.
If only one acceptable HUBZone offer comes in, the procurement can still proceed with award, so one-off competition does not automatically defeat the set-aside.
If no acceptable HUBZone offers are received, the set-aside must be withdrawn and the acquisition strategy may need to shift to a general small business set-aside if the requirement still exists.
The SBA appeal timeline is short and procedural mistakes can matter; missing the 5-business-day or 15-business-day deadlines can change the outcome or deem the appeal withdrawn.
Contracting officers should document why they chose HUBZone set-aside, HUBZone sole-source, or general small business set-aside, because the section requires a specific order of consideration and that decision may be reviewed by SBA.
Official Regulatory Text
(a) The contracting officer- (1) Shall comply with 19.203 before deciding to set aside an acquisition under the HUBZone Program; (2) May set aside acquisitions exceeding the micro-purchase threshold for competition restricted to HUBZone small business concerns when the requirements of paragraph (b) of this section can be satisfied; and (3) Shall consider HUBZone set-asides before considering HUBZone sole-source awards (see 19.1306 ) or small business set-asides (see subpart 19.5 ). (b) To set aside an acquisition for competition restricted to HUBZone small business concerns, the contracting officer must have a reasonable expectation that- (1) Offers will be received from two or more HUBZone small business concerns; and (2) Award will be made at a fair market price. (c) If the contracting officer receives only one acceptable offer from a HUBZone small business concern in response to a set aside, the contracting officer should make an award to that concern. If the contracting officer receives no acceptable offers from HUBZone small business concerns, the HUBZone set-aside shall be withdrawn and the requirement, if still valid, set aside for small business concerns, as appropriate (see 19.203 ). (d) The procedures at 19.202-1 and, at 19.402 apply to this section. (1) When the SBA intends to appeal a contracting officer’s decision to reject a recommendation of the SBA procurement center representative (or, if a procurement center representative is not assigned, see 19.402 (a)) to set aside an acquisition for competition restricted to HUBZone small business concerns, the SBA procurement center representative shall notify the contracting officer, in writing, of its intent within 5 business days of receiving the contracting officer’s notice of rejection. (2) Upon receipt of notice of SBA’s intent to appeal, the contracting officer shall suspend action on the acquisition until the head of the contracting activity issues a written decision on the appeal, unless the head of the contracting activity makes a written determination that urgent and compelling circumstances, which significantly affect the interests of the Government, exist. (3) Within 15 business days of SBA’s notification to the contracting officer, SBA must file its formal appeal with the head of the agency, or the appeal will be deemed withdrawn. The head of the agency shall reply to SBA within 15 business days of receiving the appeal. The decision of the head of the agency shall be final.