§ 126.503. What happens if SBA is unable to verify a HUBZone small business concern's eligibility or determines that a concern is no longer eligible for the program?
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/us/cfr/t13/s§ 126.503·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Proposed decertification---(1) Bases for proposed decertification. SBA may propose a certified HUBZone small business concern for decertification from the HUBZone program if:
(i)SBA has found the concern to be ineligible based on a program examination;
(ii)The concern failed to respond to a program examination;
(iii)SBA has information indicating that the concern is performing a HUBZone but is not attempting to maintain (see § 126.103) compliance with the 35% HUBZone residency requirement; or
(iv)SBA is unable to verify the concern's eligibility or otherwise has information indicating that the concern may not meet the eligibility requirements of this part,
(2)Notice of proposed decertification. SBA will notify the HUBZone small business concern by email that SBA is proposing to decertify it and state the reason(s) for the proposed decertification. The notice of proposed decertification will notify the concern that it has 30 calendar days from the date SBA emails the letter to submit a written response to SBA explaining why the proposed ground(s) should not justify decertification. SBA will consider that written notice was provided if SBA sends the notice of proposed decertification to the concern at the email address provided in the concern's profile in DSBS (or successor system).
(3)Response to notice of proposed decertification. The HUBZone small business concern must submit a written response to the notice of proposed decertification within the timeframe specified in the notice. In this response, the concern must rebut each of the reasons set forth by SBA in the notice of proposed decertification, and where appropriate, the rebuttal must include documents showing that the concern is eligible for the HUBZone program as of the date specified in the notice.
(4)Adverse inference. If a HUBZone small business concern fails to cooperate with SBA or fails to provide the information requested, SBA may draw an adverse inference and assume that the information that the concern failed to provide would demonstrate ineligibility.
(5)SBA's decision. SBA will determine whether the HUBZone small business concern remains eligible for the program within 90 calendar days after receiving all requested information, when practicable. SBA will provide written notice to the concern stating the basis for the determination.
(i)If SBA finds that the concern is not eligible, SBA will decertify the concern and remove its designation as a certified HUBZone small business concern in DSBS (or successor system).
(ii)If SBA finds that the concern is eligible, the concern will continue to be designated as a certified HUBZone small business concern in DSBS (or successor system).
(b)Decertification pursuant to a protest. The procedures described in paragraph
(a)of this section do not apply to HUBZone status protests. If the D/HUB sustains a protest pursuant to § 126.803, SBA will decertify the HUBZone small business concern immediately and change the concern's status in DSBS (or successor system) to reflect that it no longer qualifies as a certified HUBZone small business concern without first proposing it for decertification.
(c)Decertification based on false or misleading information.
(1)If SBA discovers that a certified HUBZone small business concern or its representative submitted false or misleading information, SBA will propose the firm for decertification. In addition, SBA will refer the matter to the SBA Office of Inspector General for review and may recommend that Government-wide debarment or suspension proceedings be initiated.
(2)A firm that is decertified from the HUBZone program due to the submission of false or misleading information may be removed from SBA's other small business contracting programs, including the 8(a) Business Development Program, the Women-Owned Small Business
(WOSB)Program, the Veteran Small Business Certification (VetCert) Program, and SBA's Mentor-Protégé Program.
(3)A firm that is decertified or terminated from the 8(a) BD Program, the WOSB Program, or the VetCert Program due to the submission of false or misleading information may be decertified from the HUBZone Program.
(4)SBA may require a firm that is decertified or terminated from the HUBZone Program, 8(a) BD Program, the WOSB Program, or the VetCert Program due to the submission of false or misleading information to enter into an administrative agreement with SBA as a condition of admission or re-admission to the HUBZone program.
(d)Decertification due to debarment. If a certified HUBZone small business concern is debarred from Federal contracting, SBA will decertify the HUBZone small business concern immediately and change the concern's status in DSBS (or successor system) to reflect that it no longer qualifies as a certified HUBZone small business concern, without first proposing it for decertification.
(e)Effect of decertification. Once SBA has decertified a concern, the concern is ineligible for the HUBZone program and may not submit an offer or quote for a HUBZone contract. If a concern does so, it may be in violation of criminal laws, including section 16(d) of the Small Business Act, 15 U.S.C. 645(d). If the concern has already certified as a HUBZone small business on a pending procurement, the concern must immediately inform the contracting officer for the procuring agency of the adverse eligibility determination. A contracting officer shall not award a HUBZone contract to a concern that the D/HUB has determined is not an eligible HUBZone small business concern for the procurement in question. \[84 FR 65246, Nov. 26, 2019, as amended at 88 FR 26212, Apr. 27, 2023; 89 FR 102501, Dec. 17, 2024\]
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§ 126.503
What happens if SBA is unable to verify a HUBZone small business concern's eligibility or determines that a concern is no longer eligible for the program?
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