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Newly minted HUBZone businesses in Leesburg look to grab federal dollars

Historic Downtown Leesburg became a Historically Underutilized Business Zone in January of last year because 60 percent of its population is below the median household income of the rest of the county.

Since it became a HUBZone, 12 contractors who are either from Leesburg or have recently moved to the area have become HUBZone certified.

Duane Nathaniel, the owner of Kalani Consulting Inc., says he specifically moved into the Leesburg HUBZone to grab more business.

"We are continuing to see businesses be certified," said Marantha Edwards, director of Economic Development for the Town of Leesburg.

The certification allows businesses to receive preferential treatment on certain federal contracts.

For a business to become eligible for HUBZone certification it must be a small business as certified by the U.S. Small Business Administration, must be owned and controlled by at least 51 percent United States citizens, the principle office of the company must be in a HUBZone and 35 percent of the company's employees must live in any designated HUBZone in the country.

So how do the newly minted HUBZone businesses in Leesburg turn their certification into contract dollars as the federal government goes into evaluation season?

Don Chapman, president of Uncas Consulting Group and adviser to the Loudoun Small Business Development Center for federal contracting, laid out two strategies for businesses after they become HUBZone certified.

He says most contracts the federal government hands out are renewals on contracts they already have rewarded, so HUBZone companies should identify existing HUBZone contracts that they think they can win and make their case to the rewarding agency.

Businesses can also talk to the contractor about moving a small business contract over to a HUBZone contract, which effectively shrinks the pool of potential applicants who can win contracts.

"What you're trying to do is get the government to move some of their normal procurements into the HUBZone pool," said Chapman.

Harvetta Spann, whose event planning business BLS Group Inc. became HUBZone certified in November, explained that the December through March time frame for federal contracting was crucial for marketing.

"Q2 is when you are doing all of your marketing. You are planting seeds," Spann said.

Spann's business is located on the third floor of the Mason Enterprise Center.

She explains agencies have small business outreach events.

Robert Bullett of Bullett Consulting, who also has an office in the Mason Enterprise Center, agreed that marketing and making connections is the most important way for a business to procure federal contracting dollars.

"It is a who you know business," said Chapman.

The federal fiscal year starts Oct. 1 through Sept. 30, which influences contract awards, because, if an agency doesn't allocate all its funds by Sept. 30 it loses them.

According to Chapman this forces a lot of contracting to take place in July, August and September.

The typical procurement cycle is six months, so Spann explained that April, May and June is when a company is mostly submitting proposals.

Every year the federal government sets aside 3 percent of its contracting budget for HUBZone certified businesses, which in 2013 amounted to almost $14 billion.

According to the HUBZone Contractors National Council the federal government has never met that 3 percent goal.

The problem many businesses face, according to Chapman, is a requirement that one-third of the companies employees must reside in a HUBZone.

A creative way to meet your requirement is to virtually outsource employees in HUBZones in other states like West Virginia, Maryland or as far away as Oklahoma or Alaska.

Another reason Chapman believes it might be hard for the federal government to reach their mark on HUBZone is that most federal contracts require that people on that contract work on a federal site.

"It's hard for the federal government to write a proposal of work for a job that can be done remotely," said Chapman.

HUBZone companies have generally been in manufacturing, government document scanning, consulting, event planning and other remote businesses that make sense for the federal government.

During small business week, which is May 12-16 this year, there will be HUBZone business events planned through Leesburg Economic Development. The national HUBZone conference is in September.


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