FAR 52.219-3—Notice of HUBZone Set-Aside or Sole-Source Award.
Plain-English Summary
FAR 52.219-3 is the contract clause used when the Government is buying from HUBZone small business concerns on a set-aside or sole-source basis, including certain orders under multiple-award contracts. It defines what a HUBZone small business concern is by reference to SBA certification and the SBA’s List of Qualified HUBZone Small Business Concerns, and it explains when the clause applies. The clause also tells offerors that only HUBZone concerns may compete, that non-HUBZone offers will not be considered, and that any award will go to a HUBZone concern. It addresses joint ventures by stating when a joint venture can qualify as a HUBZone concern and by requiring the joint venture to meet the HUBZone performance requirement. In practice, this clause is important because it protects the integrity of HUBZone set-asides and sole-source awards, helps contracting officers screen eligibility, and gives contractors clear notice of the eligibility and performance rules they must satisfy to compete and perform successfully.
Key Rules
HUBZone definition controls
A HUBZone small business concern must be a small business concern certified by SBA and listed on SBA’s List of Qualified HUBZone Small Business Concerns. Eligibility is not based on self-certification alone; the SBA certification and list status matter.
Clause applies only in specific buys
This clause is used only for HUBZone set-asides, HUBZone sole-source awards, certain HUBZone portions of multiple-award contracts, and certain orders placed under multiple-award contracts for HUBZone concerns. It is not a general-purpose clause for all small business acquisitions.
Only HUBZone offers are considered
The solicitation is limited to HUBZone small business concerns, and offers from firms that are not HUBZone concerns will not be evaluated. The resulting award must go to a HUBZone concern if the solicitation is issued under this clause.
Joint ventures may qualify
A joint venture can be treated as a HUBZone concern if at least one member is a HUBZone small business concern and complies with SBA joint venture rules, and if the size requirements are met by each party or by the protégé in an approved mentor-protégé joint venture.
Forty percent work requirement
For a HUBZone joint venture, at least 40 percent of the aggregate work must be performed by the HUBZone small business parties to the joint venture. The HUBZone party’s work must be substantive and cannot be limited to administrative functions.
Responsibilities
Contracting Officer
Use the clause only when the acquisition falls within the listed HUBZone set-aside or sole-source situations. Ensure the solicitation limits competition to HUBZone concerns, evaluate eligibility correctly, and make award only to an eligible HUBZone concern or qualifying HUBZone joint venture.
HUBZone Small Business Concern
Maintain SBA certification and list eligibility, submit offers only when eligible, and comply with all HUBZone requirements tied to the solicitation and award. If participating in a joint venture, ensure the venture structure and performance comply with SBA rules and the 40 percent work requirement.
Joint Venture Members
Make sure the joint venture qualifies as a HUBZone concern under SBA rules, including size-status requirements and any mentor-protégé conditions. Perform the required share of contract work so that HUBZone small business parties complete at least 40 percent of the aggregate work and do more than administrative tasks.
SBA
Certify HUBZone small business concerns and maintain the official list used to determine eligibility. Provide the regulatory framework that governs HUBZone status, joint venture qualification, and related compliance requirements.
Practical Implications
Contractors should verify HUBZone status before submitting an offer, because non-HUBZone firms will not be considered under this clause.
For joint ventures, eligibility is not automatic; the venture must satisfy both SBA joint venture rules and the clause’s 40 percent performance requirement.
Contracting officers should confirm that the acquisition actually fits one of the clause’s applicability categories before including it in the solicitation.
A common pitfall is assuming that being small is enough; the firm must also be SBA-certified as a HUBZone concern and appear on the SBA list.
Another frequent issue is underestimating the performance requirement in joint ventures: HUBZone members must perform meaningful work, not just administrative support.
Official Regulatory Text
As prescribed in 19.1309 (a) , insert the following clause: Notice of HUBZone Set-Aside or Sole-Source Award (Oct 2022) (a) Definitions . HUBZone small business concern , as used in this clause, means a small business concern, certified by the Small Business Administration (SBA), that appears on the List of Qualified HUBZone Small Business Concerns maintained by the SBA ( 13 CFR 126.103) . (b) Applicability . This clause applies only to- (1) Contracts that have been set aside or awarded on a sole-source basis to, HUBZone small business concerns; (2) Part or parts of a multiple-award contract that have been set aside for HUBZone small business concerns; (3) Orders set aside for HUBZone small business concerns under multiple-award contracts as described in 8.405-5 and 16.505 (b)(2)(i)(F); and (4) Orders issued directly to HUBZone small business concerns under multiple-award contracts as described in 19.504 (c)(1)(ii). (c) General . (1) Offers are solicited only from HUBZone small business concerns. Offers received from concerns that are not HUBZone small business concerns will not be considered. (2) Any award resulting from this solicitation will be made to a HUBZone small business concern. (d) Joint venture. A joint venture may be considered a HUBZone concern if— (1) At least one party to the joint venture is a HUBZone small business concern and complies with 13 CFR 126.616(c) ; and (2) Each party to the joint venture qualifies as small under the size standard for the solicitation, or the protégé is small under the size standard for the solicitation in a joint venture comprised of a mentor and protégé with an approved mentor-protégé agreement under the SBA mentor-protégé program. (e) A HUBZone joint venture agrees that, in the performance of the contract, at least 40 percent of the aggregate work performed by the joint venture shall be completed by the HUBZone small business parties to the joint venture. Work performed by the HUBZone small business party or parties to the joint venture must be more than administrative functions. (End of clause)