Name: HUBZone Program Outlook Audio Update
Uploaded: 2026-04-15T17:19:54.853Z
Duration: 58 min 16 s
Description: HUBZone Program Outlook Audio Update

Transcript for "HUBZone Program Outlook Audio Update": Okay. Welcome to today's webinar. For the best webinar experience, please use Google Chrome or Firefox. If you have questions, please type them into the q and a box anytime during the presentation. And if you're a current GovernmentIQ customer, you can submit inquiries to, research channels through GovernmentIQ platform. Also, today's slide deck can be downloaded right now in the resources panel on your screen. And finally, you will receive a link to an on demand recording of today's webinar via email within twenty four, hours after the webinar ends. So welcome, everyone, and thank you for joining us today. My name is Aaliyah Moyers. I'm a principal research analyst at GovConnectute. For those of you who join us every year for our HUBZone market webinar, welcome back. And for those of you joining for the first time, we're glad to have you. But before I jump in, a little about myself and, our team. So we spend most of our time tracking federal procurement opportunities and market trends, and we, help businesses like yours make sense of what's happening in the federal marketplace. So today's session is a direct product of that research, and I think you're going to walk away with some really useful, actionable insights. So we have a lot to cover today, but first, I think it's important to know that if you've been in the hub zone space for any length of time, you know this program has always had more importance. But beyond that, we're now in the second year of current administration, and we can, recall how unprecedented the environment was early last year. We witnessed changes across the federal contracting landscape that created, significant uncertainty, especially for small businesses. And now a year later, the dust has largely settled. The administration's priorities are clear now, and agencies have begun adjusting their acquisition strategies. But, stable does not mean static, and competing, effectively in FY '26 and beyond, requires firms to understand what has changed and how to operate within this new landscape. And, this is exactly what we're here to do today. So during today's webinar, we're going to look, at the current state of HUBZone program, the 2025 policy changes, that are not in in effect, the compliance obligations, and, map deadline that's fast approaching. We will then spend time digging deep into the HUBZone spending data, specifically where HUBZone, federal dollars are flowing, which agencies are awarding, to HUBZone, companies, and which sectors are seeing the most have zone contract activity. And, we're going to close with some practical strategy framework explaining, what firms need to do right now to be visible, competitive, and positioned to win. So before we dive into what's changed, let's level set quickly and revisit the basics. The HUBZone program has been around since 1997 with one core purpose, to direct federal contracts to businesses in economically distressed communities. The government's annual goal is to award at least 3% of prime contracts, to HUBZone certified firms, giving them access to, HUBZone set aside contracts, sole source awards, up to 8,500,000.0, for manufacturing, and 5,500,000.0 for all other requirements, and a 10% price evaluation in full and open competitions with hub zone participation. So to qualify, a business must meet all four requirements. They must be a small business under SBA's size standard, be at least 51% owned and controlled by US, citizens or eligible entities, and have a principal office physically located in the designated HUBZone, with at least 35% of its, employees residing in a HUBZone area as well. So there's no limit to the length of time a business can participate in the HUBZone program, as long as it, continues to qualify. So now that we've covered fundamentals, let's shift to where the program stands today. And we will start with the policy and eligibility updates, the 2024 '25, I'm sorry, rule changes and compliance essentials. Now the eligibility criteria haven't changed dramatically, but the 2025 rule changes that went into effect in January updated several details that are critical to know and, very important to reiterate. First, the employee residency requirement has been, shortened from one hundred eighty days to ninety days. So now, new hires can count towards the 35% threshold faster, giving more flexibility in hiring. And employees now need to work at least ten hours per week to count, which is something to track carefully, especially if you're, you know, if you have part time staff. On recertification, there's a good news. The frequency has dropped from annual to every three years, reducing administrative burden. However, there's a catch that I want you to really hear. So even though you only recertify every three years, you must be eligible every time you submit an offer for a HUBZone contract. And this is a big shift in compliance requirement. So under the old rule, what mattered the most was whether you were eligible at your last recertification date. Under the 2025 changes, you must meet all HUBZone eligibility requirements at the time you submit your offer for the initial HUBZone contract. But, there's some flexibility introduced for the times when a, a firm has already, received a HUBZone contract, and I'll talk about that in detail in a minute. And finally, the principal office definition tightened, so virtual offices and mailboxes won't qualify. You need a real physical space and the lease or deed starting at least thirty days before SBA review and, extending at least sixty days after. So now let's talk about some helpful flexibility introduced by the 2025 rule. First, is the grace period rule for HUBZone contract offer submission. Normally, you would be required to have 35% of employees living in a HUBZone when you're submitting an offer, for a HUBZone contract. But under this rule, if you want a HUBZone contract in the past twelve months, you get some raising room. You can still bid on new HUBZone contracts even if you slip below the 35%, as long as you're actively, trying to get back to the 35% threshold. So winning, HUBZone contract essentially gives you twelve months, to rebuild your workforce back to the required threshold while still being allowed to compete for HUBZone contract. The second flexibility is the twelve months rolling grace period for HUBZone recertification, which is very similar to HUBZone contract offer or submission rule. And what that means is that firms that did not win a HUBZone contract in the past twelve months must be fully compliant to be recertified, and there's no flexibility. However, firms that did win a contract a HUBZone contract in the past twelve months, are able to get certified and, as long as they only show that they're making an effort to maintain the 35% threshold. And this is a very important flexibility because employee residency can fluctuate and SBA, allows some leeway, so top zone awardees are not gonna last if they temporary, if they temporarily, depo the 35% requirement. So third, flexibility is the legacy employee rule that lets you count up to four employees who moved out of the HUBZone towards your 35% threshold, as long as at least one current employee still resides in the hub zone. So for firms in high mobility markets, where it's hard to retain staff who stay in the, hub zone neighborhood, it's a very important flexibility. Now while those flexibilities give you some breathing room, they do not eliminate your compliance obligations. And, there are limits, to how far compliance can slip, and the consequences of crossing those limits are serious. So if residency drops below 20, firms must, self report to SBA or they could lose a certification or possibly case of debaugment, during an audit. And SBA, may visit HUBZone businesses without a notice and verify the accuracy of any certification, that they made or information provided as part of the HUBZone application or recertification process. And here's the most important, takeaway regarding compliance. So even though you recertify every three years, you must be eligible HUBZone when you're submitting your first offer for a HUBZone contract. And you do, again, some flexibility if you are awarded a HUBZone contract. But, the bottom line is that your HUBZone compliance is no longer an annual checkbox. It's an active ongoing obligation, and that's fundamentally, a different compliance posture than what it was prior to the final rule. So you don't want to let the compliance slip between the recertifications and, miss out on have certain opportunities when they come up. And remember, only firms that stay compliant, will have the opportunity to win more contracts. Now let's talk about the map because this is the one with the clock on it. The 2026 redesignation update is not something you can revisit later. You need to know now what's changing and when. So first, let me explain that hub zone areas are determined through several different designation, types, and each type has its own rules and timing. So the major hub zone map update is done every five years based on the census data, and the next full update will not happen until July 2028, meaning that national hub zone map will remain stable for another couple of years. However, a critical change is coming on July 1, and it's for the redesignated areas. So redesignated area is any area that lost top zone eligibility in 2023 during the major map update and was granted, a three year redesignation period allowing firms located, in the area, to temporarily remain in the program. So that, redesignation period expires on, July 1. And on that day, firms whose principal office is located in the area and whose employees reside in the redesignated area will lose their HUBZone eligibility unless, they're covered by another qualifying designation. So this is why, 2026 is actually a decisive year for many house zones, because, the firms that are affected by this update need to make a strategic decision now before July 1. So now let's step back from the mechanics of the program and look at the environment businesses are operating in. The current administration is reshaping how set aside programs function, and for a hub zone firms, that means both challenges and opportunities. So starting at the broader level, the executive order directing agencies to NDI related, initiatives had a direct impact on small business, contracting goals. So in 2025, SBA reset the government wide small disadvantaged business goal back from, from 15% to, statutory 5%. And, that's a significant pullback. That can definitely prompt agencies, that have been laser focused on eight a and SDB awards to start recalibrating. There's also increased scrutiny across all set aside programs, and contracting officers have been warned of, penalties for failing to report suspected fraud involving eight a contracts. So, several agencies including Treasury, SBA, and Department of Defense, have launched their own, audits of ADA, contracting activity and the preference based contracts. Also, the compliance environment for the set aside programs have tightened, resulting in stricter oversight. And in February and March this year, SBA removed 782 companies from the ADA program stating that they, failed to submit financial data and met the economic, disadvantage criteria. These companies can still appeal their removal, but if if it's finalized, SBA will have removed, approximately 18% of the, ADA participants. And now here's where it gets really interesting for house owned firms, and this is something a lot of people in the market haven't fully absorbed yet. Since September, of last year, a major class deviation to FAR part 19, was signed as part of the revolutionary far over whole. And one of the most significant changes in that deviation could directly impact, benefit, actually, half term firms. So for decades, the once a day, always a day rule meant that foreign contracts had to remain in the eight program. But, this new rule, is now, but this old rule, I'm sorry, here, is effectively dismantled. And under the new form, contracting officers can automatically transition full on requirements from, ADA to any other, socioeconomic set aside, program, and no small business, agency approval or no paperwork, no waiting is required. So think about what that means in practice. There's a significant pipeline of contracts currently sitting in the eight a program that are coming up for a reconfig. And with a much lower SDB set aside goal and this new rule, those requirements could transition directly into HUBZone set aside or any other set aside program. But please keep in mind that for rewrite isn't officially a lower yet. Agencies can adopt the changes early through deviation in GSA and DoD. However, you've done so. But adoption isn't even across the government, and, that means that agencies are currently operating on, different versions of form. So tracking which agencies have adopted deviations should be part of your market intelligence strategy. Now I do want to flag an important caveat, and it's, that the the same deviation also removed the requirement for contracting officers to prioritize socioeconomic set asides over general small business set asides, on task order and delivery orders under multiple award contracts. So set asides for specific programs are now discretionary on those, orders, and this could reduce, opportunities for socioeconomic categories in some procurements. What that means is that, the relationship you have with the contracting officers, matter more than ever because they now have the discretion to choose whether to set aside a task order for HUBZone or any other socioeconomic category or open it up to a broader small business pool. So here's the bottom line. So HUBZone's geography based eligibility keeps it protected from anti DI directives. In addition to that, the automatic eight a related provisions open up a new pipeline of follow on opportunities, for HUBZone firms. And, also, the agency's focus, shifting away from 80 could also create a new opportunities pipeline for HUBZone certified firms. Okay. Now let's look into actual set aside performance data. So what you're looking at is the f r twenty five rough cut scorecard for small business prime contracting goals across the federal government. It's important to note that these numbers have been adjusted, to remove the 21,600,000,000.0, in state department obligations, which were reported in error, and the state department actually reversed these obligations in early f y twenty six. So at the government wide level, small businesses, small business set aside, is still exceeding the 23% goal coming at, 26.4%. And small disadvantaged business performance is at 11.31% exceeding the 5% goal. Though it's worth remembering, that the goal was reduced, for the small disadvantaged business, set aside to 5% early in 2025. So that number actually reflects a transition year, and it will be very interesting to see how the numbers are changing by next year. Service disabled veteran owned small business and woman owned small business are both running, just under their 5% goal, and the only category with the largest performance gap is the HUBZone set aside. So when we look at agency by agency, we can see that some of the largest agencies are among the furthest behind. So, for example, Department of Energy is at 0.17%, VA is at 1.8%, and, DOD is at, 2.34%. So the takeaway for HubZone firms is that, the gap is real and well documented. We know that agencies are not penalized for missing their goals, but they're publicly scored and expected to explain their shortfalls. And that accountability creates a pressure to find an award to qualified HUBZone even though agencies have struggled historically to meet their top zone goal. Now this chart, tracks small business firm contracting performance against the set aside goals from f y twenty twenty through f y twenty five. And we can notice that all socioeconomic categories are slightly down, and, eight day contracting specifically was down about 4%. This is not surprising given the current environment, but, I want to draw your attention specifically to the HUBZone column on the far right. So HUBZone's 3% government wide goal was missed every single year, six years in a row. While other categories have either met or exceeded its target, at some point, HUBZone performance has stayed flat, barely reaching, 2% in most years. So it was very little, improvement in FY twenty five. So we just looked at the plan contracting side. But when we shift to, subcontracting, we see that HubSpot subcontracting performance is not looking any better. So this chart tracks, federal subcontracting performance from FY 2020 through FY 2024. The green check marks show where the goals were met, and the red axis show where they were not. As you can see on the charts, small business program and women owned small business program have met their goal, for subcontracting every single year. And while, small disadvantaged businesses, program has also struggled on the subcontracting side, the program did meet, its goal in 2024. So the service disabled better known small business goal has also not been met, consistently, but there's important context here. So the goal was raised from 3% to 5% in 2024, making it considerably harder to achieve. And agencies are, still catching up to that goal. But HubZone, on the other hand, had the same goal without any changes at 3%, and it has still, never been met across the entire five year period. So we have been talking about the demand side. Now let's flip to the supply side and look at the number of certified firms competing for those opportunities. So this chart tracks the total count of active HUBZone certified firms from 2011 through 2026. If you look at the overall trend, the program picked around 2020 with roughly 7,700 certified firms, and then it went through a steady decline in twenty twenty four and twenty five, dropping to around 4,500 companies, which is the lowest point we've seen in the entire period. But the most recent data tells us that after remaining essentially flat, between '24 and '25, the number of certified firms has already jumped by 17% in 2026, which suggests that the program, may be gaining momentum again. Now here's a number I really want you to draw your attention to. According to Gowland data, in f one twenty five, roughly 50% of the certified firms did not receive a single prime contract. And that tells us that, certification alone is not enough. As we can see, half of the certified pool is sitting on the sidelines. And in order to win a half zone contract, firms need to be proactive, making themselves visible to the contracting officer officers and, building relationships with potential team partners and, obviously, working, with the right agencies. Now before we get into the Huntsville and spending details, let's zoom out for a moment and look at the overall, federal contracting landscape because a broader market always, directly impacts the smaller opportunities in smaller markets. And I want to start with something that might sound surprising, despite everything we saw in 2025. So the administration's active efforts to downsize the government, agency closures, widespread contract terminations through, the program, and significant delays in appropriations. So despite all of that, f y twenty five was actually a growth year for overall federal contracting. So part of the explanation is is, one big beautiful bill legislation that came on halfway through the year and appropriated significant funding to the Department of Defense, DHS, and several other agencies. And that injection of, funds had real impact on the contracting numbers overall. So defense spending increased by 9% in f y twenty five, making it a record year for defense contracting, and that reflects the administration's strong focus on defense and border security. On civilian side, spending did see a modest decrease for, of about 2.3%, which is more consistent with, what would be expected given the, agency reductions in those, activities and that was still mostly in the civilian agencies. But, despite the pullback, 2025 is still the second highest year for civilian spending since 2017. So the spending volume for civilian agencies remains historically high. And then if you look at the smaller chart on the right, which is for HUBZone set aside spending, you will see, that there's a increase of, 1.8% in in f y twenty five. Smallest, but still meaningful and, still moving in the right direction. And I wanted to share a quick update regarding president's f y twenty seven budget proposal that was released early this month. So the proposed budget seeks to cut nondefense discretionary spending by about 10%, which equals to, 73,000,000,000. The budget request would reduce discretionary spending for all but, handful of federal agencies. And, SBA, EPA, Department of Labor, and NASA are facing steep cuts according to the proposed budget, each exceeding 20%. And, actually, SBA is facing, 67%, decrease in discretionary funding. But on the bright side, defense spending boost of 42%, if approved, would raise, overall spending for the federal contracting. An important caveat is that this is the president's budget proposal, and, Congress has historically brushed back significantly on the administration's aggressive cutting proposals as it did, in f y twenty six. So we do expect some pushback from Congress on the proposed f y twenty six '27 cuts as well. And now if we look at the small business spending, we can see that, there's a clear positive long term trend for small business contracting, which, in FY twenty four, actually hit a record setting, reaching 175,800,000,000 in small business contracting. However, the FY 2025, fiscal year did see a modest at 1.5 decline from the record high. But, importantly, this still makes f one twenty five the second strongest year on the record for small business contracting. So as we saw on the previous, slides, the overall numbers are strong. But the real question is where within the market is the money flowing for HUBZones? So in the next section, we will look at HUBZone spending trends and which agencies are driving the most activity because, this is where the data gets directly relevant to HUBZone firms. First, let's, talk about the top departments driving the HUBZone activity. And this slide breaks down HUBZone set aside contract obligations by agency, from f y twenty one through f y twenty five. We have two charts here. The bottom chart is capturing smaller agencies. So when you look at the top chart, it's pretty clear who's driving, activity in the hub zone hub zone market. And, these agencies are Homeland Security, army, navy, defense, and air force. And, they have been consistently the biggest buyers of hub zone set aside, year after year. Homeland Security alone has been putting out, anywhere from 270,000,000 to 500,000,000 annually in HUBZone set aside obligations. And the army and navy have a similar spending. So if you're a HUBZone firm and, DHS or DOD components are not on your target list, that's really something, that you should be considering. And because defense in, airspace is the primary focus of this administration, we anticipate spending within this agency is to increase within the next, two years. One interesting pattern in f y twenty five is that navy, the defense and air force, also an increase in HUBZone set aside spending while most of other agencies, including Homeland Security and Army saw a slight decline. So Air Force in particular stands out, with about 142 increase in HUBZone spending, in f y twenty five. And about 60% of its f y twenty five increase was driven by the construction projects. So if your firm is in construction or facilities, and then you're HUBZone certified, Air Force is the agency worth putting on your radar right now. So these are the large agencies, and I think you shouldn't overlook the smaller players on the market. There are agencies that are significantly outperforming, on their 3% goal, and those agencies are worth targeting because they have both the motivation and the track record of working with HUBZone firms. Those agencies are USDA, Commerce, GSA, and several other agencies. And on the bottom chart, EPA stands out with a sharp spike in f y twenty four that was largely, driven by a single remediation services contract. So on the bottom chart, the numbers are smaller, but, again, don't overlook them. Many of the agencies are showing consistent activity in the house zone market. So let's talk about where the dollars are flowing by industry because knowing which industries are driving house zone spend is just as important as knowing which agencies are spending. So the two large categories, on the chart are information technology and architect engineering and construction. Together, these two industries account for the one share of HUBZone contract dollars. IT has held 33.8% share, and ABC sits at 32%, meaning those two sectors alone represent roughly two two thirds of, HUBZone all HUBZone spending. But here's where the trends diverge. IT spending has declined in recent years. You can see the, bars pulling back from, their FY '23 peak. However, despite some decline, IT is still one of the dominant industries in the half zone market. So AC, on the other hand, is moving in the opposite direction. Spending in the category has grown, reflecting continued, federal investment in the infrastructure, facilities, and construction. Professional services, at 16.8% also saw a notable decline, and this is consistent with the broader trend that we've seen toward consolidation and efficiency in administrative and advisory contracts. Ship bill gain, on the other hand, saw a meaningful increase, which tied back to the, defense and naval investment priorities, and, operations and maintenance at 4.9% has shown a steady, and, up upward movement. So this makes AEC and shipbuilding the two, industries trending upwards in the HUBZone procurement market. Okay. This will get small granular moving from industry trends down to the specific NAICS codes driving, HUBZone set aside activity within each of those top five, industries. A few things worth noting here. First, notice the concentration percentage in the header row for each of those industries. They represent a concentration of spending under five NAICS codes within each of those industries, meaning nearly all HUBZone dollars in those industries flow through just this, five, NAICS codes. So if you're in those sectors and you're not aligned aligned to, these, codes, you may be missing a bulk of the opportunity. And professional services is actually more fragmented, with more NAICS codes, in play. So the top five NAICS codes, capture 64.3% of the professional services, have some industry. So now let's focus on each industry individually, and we will start with the information technology. First looking into top agencies driving spend for HUBZone firms. So this slide breaks down HUBZone IT set aside spending by department from f y twenty one through f y twenty five. As you can see, Homeland Security dominates the charts accounting for 31.7% of all HUBZone IT spending over five years, and that's nearly a third of the entire category, flowing through one department. And while you can see, their spend has pulled back from f its, f y twenty three peak, they remain by far the largest buyer of, HUBZone IT services in the federal government. Defense comes in second at 14.7% of the overall, HUBZone, spending over five years showing consistent decline, in spending. But together, homeland security and defense accounts were nearly half of the, HUBZone IT dollars. So if you are an IT firm and you're not engaged with these two, departments, you are possibly sitting outside of the, primary market. Air Force, health and human services, and justice each represent about 6.5 and, 5.7%. The bottom chart, gives us the secondary tier of agencies. And a few things, stand out here. Commerce and army were the leading departments, in that group with commerce showings and spikes in spending in FY twenty three and '24. However, both departments saw significant decline in HUBZone IT spending in, 2025. The small business administration, on the other hand, saw a 200% increase in HUBZone IT spending in f y twenty twenty five. But I wanted to remind that, according to the president's proposed f y twenty seven budget, SBA could face a potential 67% decrease in discretionary funding. And, one trend that you can see on this chart, across almost every agency, FY twenty twenty five spending is down. So it's not isolated to one agency. It's a market wide trend. So this slide shows the top HUBZone prime contractors in IT for f y twenty twenty five. GovSMART is the clear front runner at approximately 110,000,000, followed by BlueTech Incorporated at around 88,000,000, and, Pan America Computers at roughly, 75,000,000. So these three, firms alone are capturing about 40% of the HUBZone IC Prime contracts. And, yes, IT is very competitive market, but the range of the total obligations for each of the primes shows that this market has some room for, firms in different stages. Also, knowing, who the top prime primes are opens teaming opportunities. So if you're not positioned to compete at the prime level yet, firms listed on the slide, worth exploring as teaming of subcontracting partners. Now let's shift to AC, which, as we saw earlier, is actually one of the bright spots in hot zone spending. The first thing that jumps out, on the slide is who is doing the buying, and it's almost entirely the, military departments. So army, navy, and air force together account for roughly 77% of all house on AC spending, and that's a heavily defense concentrated market, which makes sense, given the volume of facilities, infrastructure, and construction work across military installations. So army and navy both saw a slight decline in f y twenty five after stronger prior years. But, Air Force saw a significant increase in FY twenty five driven largely by, the, two zero three million obligated, work for repair and maintenance projects, that were procured under multiple award IDIQ for work at Andersen Air Force Base. And, that's a good reminder that behind these big numbers, there's often a specific program or vehicle driving this bike. So Defense Marine Corps and DHS follow at about 5%, still meaningful, but clearly secondary buyers in the space. And, now moving down to the top primes, CPAP engineering takes the top spot at approximately hubs on set asides, which is, substantially over the field. Modern international and Pacific Rim constructions fall at around $55,000,000 and $45,000,000 respectively. So now let's look at the professional services, which, as I mentioned earlier, has been one of the declining categories. Professional services has notably a different buyer profile compared to AAC, and rather than being dominated by the, defense department, Homeland Security is the largest, buyer obligating 27.6 of the HUBZone professional services. And, DHS saw, a roughly 30% decrease, in spending for HUBZone professional services in 2025, and that's largely driven by the budgetary pressures that we've seen in DHS. After Homeland Security, the market is more distributed. So labor is at 11.8% of the share. Army is at 12%, defense at 9.8%, and state is at 8.4%. So, there's a reasonable spread, of buyers across the secondary tier, which actually gives professional services firms more, more options in terms of agencies than some other categories. Now looking at at the, top primes, and this is where professional services really stands out, compared to AC and IT. So the total obligated, obligations for each of the primes, is dramatically smaller. So the top firms like, KR and CAC LLC comes at around 16,000,000 compared to 110,000,000 for the, LTE Top Prime and 100,000,000 for, AEC. So the entire top 10 is clustered with roughly 8,000,000 16,000,000. So that tells us that, this is a much more fragmented and more accessible market, and there's no single dominant player going away from the field. So for smaller firms or those newer to federal contracting, professional services may actually offer a lower barrier to entry at the, prime level than AC and, IT industry. So the caveat, of course, is that, this was a declining, category in f y twenty five. So while it's more accessible, you want to be more strategic about what agencies and which services you're pursuing within this, sector. And lastly, I want to give you an industry breakdown for operations and maintenance category. So the first thing that stands out on the slide is that much like, AC industry, the OEM buyers landscape is heavily dominated by defense departments. And army leads by a significant margin at 43.7, followed by Marine Corps at 12% and Air Force at 11.3%. So together, those two branches account for roughly two thirds of, all HUBZone o and m spending. So Navy also appears as a meaningful buyer in this category, and GSA and tier and labor fall on the secondary tier at much smaller levels. And here's the trend that's worth paying attention to. Army, the dominant buyer, saw a significant increase in spending in f y twenty five. Air Force, Navy, and GSA also saw an increase in, f y twenty five, which is a very encouraging sign for firms operating in the space. But the overall decline in the category is largely driven by the Marine Corps pulling back significantly from their FY twenty twenty four spike in spending. So this spike was largely driven by the awarded task orders or delivery orders under multiple construction contracts in Northern Carolina and Hawaii as well as, design build contract at air station and recruit depot in South Carolina. So once the work was obligated, spending pulled back in in, FY 2025. Now looking at the top primes providing HUBZone, O and M services, T and H Services LLC stands out clearly from the rest of the primes with in total obligations in FY twenty five. The modern international and South's Day eight Air Air Conditioning and Refrigeration, those come in around $12,000,000 followed by Infotech International approximately at $10,000,000 And then the remaining firms cluster in, at around $3,000,000 to $7,000,000 range. So as we can see, several firms are clearly capturing the larger share of the market just like, in the ACU, category. That could mean, that these funds have a strong agency relationships and, established contract vehicles. So teaming in, subcontracting with those firms can be effective strategy to access this market while you're building your own past performance. And with the administration's continued emphasis on defense investment and military readiness, we expect spending across these military departments to increase making O and M category worse positioning for. Okay. And that wraps up our industry breakdown. Now let's turn to the opportunities pipeline. First, I wanted to mention that in the one I q database, we have multiple HUBZone set aside requirements that are anticipated to be released within the next two to three years, and that number changes frequently when new opportunities emerge. So for today's webinar, I selected a handful, that I think stand out from the rest of the opportunities. And, again, this is not all of the HUBZone set aside requirements that we have in our database. So, I encourage you guys to conduct, your own deep dive research and find opportunities that align with your interest. So for the sake of time, I will not be going through, these opportunities. And, again, slides can be downloaded from the resources panel on the screen. And before I move to the final part of our presentation, I wanted to explain that the first slide here shows that, the list of opportunities for shipbuilding and AC requirements. And, the second slide represents opportunities for O and M and professional services. Now let's shift gears and talk about competitive dynamics and contracting vehicles and specifically how firms can position themselves to win, HUBZone contracts. So before I jump in, I want to highlight something crucial that might not be immediately obvious. So the evolving housing landscape that we've talked about, stricter compliance environment, SBA audits, twenty twenty six map exploration, all of that can actually work in your favor, if you're staying on top of your eligibility because that could lead to a smaller HUBZone competitive pool, and less competition means more opportunity, for firms that are staying compliant. Now with that context in mind, let's talk about how you actually win under HUBZone program. As I mentioned at the beginning of the webinar, there are three mechanisms available to HUBZone certified firms, competed set aside contracts, sole source awards, and the 10% price preference, in the full and open competitions when you're going against a large business. So let's look at how each of those play out, in practice. We understand that all of these tools give HUBZone firms a competitive advantage, but as you can see on this chart, set aside contracts are where most HUBZone dollars flow. So set aside contracts are pretty much your most reliable path to hot zone contracts. And sole source awards are underutilized and mostly valuable when you build, agency relationships. Also, they're allowed only for requirements under 5,500,000.0 and, 8 point 500,000.0 for manufacturing, which is relatively low for federal contracts. And the 10% price evaluation preference, while it sounds significant on paper, has had a very limited impact, in the HUBZone procurement wall. For example, in, FYI twenty twenty four, it accounted for less than 0.1% of federal spend, not even 1% or half of a percent, 0.1%. So while it's something a tool that, is worth is worth knowing about, it definitely, shouldn't be a centerpiece of your strategy. As you can see on the chart, the HUBZone set aside spend, the blue bar, has been, the consistent driver of HUBZone dollars since 2015, while sole source and PEP remain very small by comparison. So the key takeaway, is that the real value of your HUBZone certification is the access to our smaller, more targeted competitive pool and access to vehicles and set aside opportunities that simply aren't available to uncertified and if your firm is eligible for additional certifications beyond HUBZone, please pursue them. A firm with more than one, certification can access broader set aside pool and is more attractive as a teaming partner. And if today's, webinar made you interested in other certification programs, we've got resources for that as well. Kathleen Severson and Carecrow, have already covered eight a and service disabled veteran owned small business programs in their webinars, and you can watch those recordings on demand. And woman owned small business webinar is up next. It will be presented by Ashley Sanderson on April 23, so please stay tuned for that. Now let's talk about vehicles because in today's market, acquisition vehicles are becoming a prerequisite for accessing opportunities, and the current administration is making that, direction very clear. The executive order signed in March, directs agencies to shift their purchasing of common goods and services as much as possible to GSA and through their acquisition vehicles. And this executive order also made GSA an executive agent of all GWACs. Furthermore, the FAR rewrite created a framework for formally designating vehicles as required. So even if, the law making hasn't been finalized yet, the legal framework for designating vehicles as required is already in place and as, a far deviation. We also see a shift toward prioritizing competition over sole source awards because far changes also require contracting officers to officers to, attempt competition through GWACs before pursuing sole source awards for requirements below competitive threshold. And, the bottom line for HUBZone firms is that if you're not on the right vehicle, you risk being locked out of opportunities regardless of your certification. And, getting on GSA schedule or a relevant, GRAC isn't just a nice have option anymore. So the first two vehicles I wanted to focus on are GSA's Lexus Plus and Polaris, because both vehicles have dedicated hub zone pools. Lexus Plus is GSA's best in class vehicle for nonprofessional non IT professional services. The hub zone pool, received its, phase one awards, and agencies have been able to place orders since 10/15/2024. However, as you can see on the chart, there haven't been much, spending under ACES Plus hub zone pool yet. Phase two, OASIS Plus solicitations were open this January and significantly expanded the scope of the program. It is expected that the number of task orders awarded under Aces Plus will grow and not only because the demand, is anticipated to increase as a result of, consolidation efforts, but also because the scope of the vehicle increased and GSA intends to keep Aces Plus solicitation continuously open to allow new vendors to join at any time. So I highly recommend all professional, services providers to look into Oasis plus if you're not on the vehicle yet. Now Polaris, is GSA's small business, GWAB for IT services and solutions. It has four set asides, and one of them is Hazzone. Phase one awards were made for this vehicle in December 2025. So it's a very recent, award, and we haven't seen much action on your Polaris hub zone, pool, either. So but the vehicle is open for agencies, to place orders. GSA also plans to make additional awards, but they will be made based on the proposal, proposals submitted by January 2024. And new proposals are not being accepted, under, Polaris hub zone. So if you're not on Polaris, you would have you will have to wait for a future on ramp or consider to meet with current, Polaris hub zone crimes. The third vehicle that's also very important for accessing HUBZone procurements is GSA schedule. Task orders under GSA schedule can be set aside to HUBZones, which means if you are a HUBZone certified firm but not on the schedule, you're simply not eligible for those desk or opportunities. And schedule is an evergreen contract, which means companies can apply for contracts, at any time, the GSA schedule contract. And as I mentioned GSA also mentioned, that as a result of the consolidation efforts, they anticipate spending under, GSA vehicles, including GSA schedule, to quadruple in the coming years. So the fourth vehicle that's highly important for our HUBZone set asides is NASA SEWP. And as you can see on this chart, SEWP five stands out as a vehicle with the highest HUBZone set aside spending compared to all other vehicles. And there are two things happening with, SEWP, right now that are worth paying attention to. First, while there have been discussion about GSA potentially taking over management of, SEWP, program, as an executive agent, it remains, under NASA's authority for now. Second, SEWP six, the full on vehicle, is currently under court test. Decision on the recently filed g GAO protests are expected to be made by July, and award timeline remain remains, unavailable at this point. And because of the protests, MASA is seeking approval to extend the current, supervised ordering periods through September with a potential additional extension through, April. And if you if you didn't submit a proposal for suit six, teaming is your path to, to gaining access, to have zone set aside task force under suit six. Alright. We've covered a lot of ground today, and I want to bring it all together into a framework I hope you can use. So think of your HUBZone win strategy as five interconnected moves. First, protect your certification. Second, get on the right vehicle if possible or create a team arrangement with firms that are on those vehicles. Third, target smart. Use market intelligence to identify agencies where you have the strongest capability fit and, where hub zones spending is being directed. So know which agencies are spending in your NAICS code, PSC codes. Know who, the incumbents are and when their contracts are expiring, and know how those requirements are being procured. So for, the one IQ clients, this type of market research can be done in the one I q database using federal spending analytics, agency profile, profiles, company profiles, opportunities database, contracts and task orders database, and a lot of other tools available to you. And remember that UCSM can help you build those, searches, and our analysts are also available here to answer questions about specific opportunities. Fourth, build relationships before RFPs, are released. Attend industry days, respond to sources of notices, build your presence before the solicitations are, on the street. And if the requirement is larger than current capacity or if you need a past performance you don't have yet, teaming or subbing is worth considering. And the last but not least is, stack your certifications. Remember that HubZone certification is just the foundation. And to win contracts, you need to build strategy, build relationships, and position yourself to win. Okay. Because the session has taken quite a bit of time, I think I'm gonna take only one question, and the rest of the questions will be answered next week. So let's see what we got here. Okay. Here's a good question. Do I need to be a HABZone certified by the time, a contract is awarded? Well, it depends on the type of the award. So for competitive, HUBZone awards, no. You won't need to be certified. But, if it's, HUBZone sole source contract, then, yes, you must be fully certified, on the date of the award. I hope that answers your question. And, that's a wrap. Thank you so much for spending the last hour with me. I really hope this information was valuable, and please don't forget to sign up for our upcoming webinars. Thank you, everyone, and have a great rest of the day.