HUBZone certification for a NEMT company: the map, the 35 percent rule, and the ride contracts it opens

HUBZone certification lets a small company bid on federal contracts reserved for businesses that operate in, and hire from, areas SBA calls Historically Underutilized Business Zones. A ride company qualifies when it is at least 51 percent owned by U.S. citizens, is small for its industry, runs its principal office from inside a HUBZone, and has at least 35 percent of its employees living in one. The program applies only to federal buyers. It does not reach state or local contracts (13 CFR 126.101), so Medicaid brokers and health plans never use it.

Government NEMT contracts covers registering in SAM.gov and finding bids. This guide covers the one certification that depends on where your office and your staff are. HUBZones include Indian reservation land, non-metropolitan counties with low incomes or high unemployment, and high-poverty census tracts, so some rural and tribal-area ride companies already sit in one without knowing it.

What does HUBZone certification require?

A company must meet four tests at once, all listed in 13 CFR 126.200.

• Ownership. At least 51 percent owned and controlled by U.S. citizens. Tribal governments, Alaska Native Corporations, Native Hawaiian Organizations, Community Development Corporations and small agricultural cooperatives can also own the company.
• Size. Small under the size standard for any NAICS code in the company’s SAM.gov profile. Special needs transportation (485991) is $19 million in average annual receipts over the last five completed fiscal years, and ambulance services (621910) is $22.5 million. For a particular contract, the company must be small under the code that contract uses.
• Office. The principal office has to be in a HUBZone.
• Employees. At least 35 percent of employees must live in a HUBZone.

Two more conditions apply throughout: no active exclusion in SAM.gov for the company or its owners, and no unpaid significant federal debts, such as unresolved tax liens, unless the owners are current on an approved repayment plan.

Who counts toward the 35 percent?

An employee counts toward the 35 percent when the person generally works at least 10 hours a week during the four weeks before SBA’s review date and has lived at the home address full-time for at least 90 days. SBA reviews payroll records for those four weeks and judges employee status on the whole picture, including IRS criteria, not by the label on the paperwork (13 CFR 126.103).

• Part-timers count. SBA may also count someone who works under 10 hours in a week, if the person works at least 40 hours across the four weeks and there is a legitimate business reason.
• Contract drivers do not count. Independent contractors paid on a 1099 and subcontractors are left out. In a hypothetical fleet with 15 contract drivers and 4 salaried staff, only the 4 are measured. The test for who is an employee is in 1099 or W-2 drivers.
• Owners and agency staff do. An owner who works 10 or more hours a week counts whether or not paid, and so do workers from a temp agency, a leasing company or a PEO.
• Residence is proved with a driver’s license. SBA looks first at the address on a license or government ID. Deeds, leases or utility bills come in only if the license is unavailable or does not match.

The rule rounds to the nearest person. A company with 25 employees needs 9 in a HUBZone, and one with 95 needs 33. As a hypothetical, a company with 12 drivers and 4 office staff has 16 employees and needs 6 of them in a HUBZone, because 35 percent of 16 is 5.6.

When an employee moves out, up to four legacy employees can still count. The employee must have lived in a HUBZone for 180 days after the company’s certification date or anniversary, worked continuously for the company at 30 or more hours a week, and the company needs at least one other HUBZone employee. The company keeps the address and employment records for as long as it is in the program.

Where does the principal office have to be?

The principal office must be the location where the most employees at any one site do their work, and it has to be in a HUBZone. SBA wants a deed or an active lease that began at least 30 days before its review and ends at least 60 days after it, plus proof that the company really runs the business there. An employee is placed at the location where he or she spends more than half of the time.

For a firm whose primary industry is services, SBA leaves out employees who spend more than half of their work at job sites fulfilling specific contract obligations. The definition does not say whether drivers who spend the day in vehicles count as job-site employees, or how it applies to a ride company, so ask SBA’s HUBZone office or an APEX Accelerator counselor before relying on a dispatch office as the principal office.

A company that buys its building or signs a lease of at least 10 years in a HUBZone is treated as having its principal office there for up to 10 years. That protection does not cover an office in a redesignated area, an office shared with another company, or a personal residence.

How do I check the HUBZone map?

Enter the office address and each employee’s home address in SBA’s HUBZone map. The map shows whether each address is inside a HUBZone and, for redesignated areas, the date that status ends. The map shows these types of area:

• Qualified census tracts. Tracts where at least half of households earn less than 60 percent of the area median income, or the poverty rate is at least 25 percent.
• Qualified non-metropolitan counties. Counties outside metropolitan areas where median household income is under 80 percent of the state median, or unemployment is at least 140 percent of the lower of the national or state rate.
• Indian lands. Land inside the external boundaries of an Indian reservation, whether or not the tribe owns each parcel.
• Redesignated areas. Tracts and counties that lost qualified status. They count for three years after the official data is released.
• Disaster areas, base closure areas and Governor-designated areas. Added after a presidential disaster declaration, a base closure or an approved governor’s petition.

SBA updates the tracts and counties every five years. The map was last updated in July 2023, and the next update for them is due in July 2028. SBA’s map page says areas that became redesignated in 2023 expired on July 1, 2026, and its program page lists a 2026 update to reflect expiring redesignated areas. An address that qualified only through that status needs a fresh check before you apply. If the map says an address is outside a HUBZone and you disagree, note it on the application and send SBA the documents that support your view.

What can a HUBZone firm win?

A certified firm can win three kinds of federal work: set-aside contracts, sole-source awards up to a ceiling, and a price preference in open competitions.

The sole-source ceiling is $5.5 million in FAR 19.1306 since the inflation adjustment that took effect on October 1, 2025. The overhaul text of FAR Part 19 on acquisition.gov renumbers the HUBZone rules as 19.105 and keeps the same ceiling. SBA’s own rule, 13 CFR 126.612, still prints the older $4.5 million and $7 million, so use the FAR figure when a contracting officer cites it.

The price preference works like this, using the example in 13 CFR 126.613. A large business bids $93 and a HUBZone firm bids $98. The buyer adds 10 percent to the large business price, which makes it $102.30, so the HUBZone firm is treated as lowest. If the HUBZone firm had bid $103, it would not win on price. The preference is skipped when the lowest bidder is a small business.

A HUBZone prime also has to do the work itself. On a service contract, the rules cap what it may pay to firms that are not similarly situated, and the limit is explained in joint ventures and teaming agreements. Certification does not guarantee a contract (13 CFR 126.603).

Have any ride contracts been set aside for HUBZone firms?

Very few. USAspending.gov, the federal award database, lists no contract under NAICS 485991 coded as a HUBZone set-aside or sole-source award between October 2019 and October 6, 2026. The closest example is ambulance work: Army contract W91YTZ24C0002 for ambulance services at Fort Buchanan, Puerto Rico, which was set aside for HUBZone firms and drew three offers. Its current period runs from January 1, 2024 to December 31, 2026, with $2.6 million obligated so far and options that bring the total to $4.6 million through December 2028.

VA wheelchair van work follows a different path. The VA contracts for Philadelphia, Baltimore and Orlando are coded in USAspending as set-asides for service-disabled veteran-owned small businesses. VA transportation contracts explains how those awards work.

That leaves the price preference and subcontract positions as the likelier benefits for a HUBZone ride company. To look for open set-asides, search SAM.gov contract opportunities by NAICS code (485991, 621910 and 485999) and filter by set-aside type. SAM.gov lists them as “Historically Underutilized Business (HUBZone) Set-Aside (FAR 19.13)” and “Historically Underutilized Business (HUBZone) Sole Source (FAR 19.13)”.

How do I apply and keep certification?

SBA decides within 60 calendar days after it receives a complete application (13 CFR 126.306).

1. Register in SAM.gov. SBA reads your size and NAICS codes from the SAM.gov profile. A Unique Entity ID comes with registration.
2. Check every address on the map. Do this for the office and for each employee counted toward the 35 percent.
3. Apply on SBA Certifications. An owner or officer signs the representation. Expect to send employment records and a driver’s license for each employee counted as a resident.
4. Wait for the decision. The company has to be eligible on the day SBA decides. A declined company can reapply after 90 days once it has fixed the reasons for the decline.

Once certified, three duties follow:

• Recertify every three years, in the 90 days before the anniversary. A company that misses the date is decertified at the end of its eligibility period, and reinstated if it recertifies within 30 days after.
• Tell SBA within 30 days after buying, being bought by or merging with another company.
• Expect an examination at least once every three years. SBA can visit the offices and ask for more records, and the company must keep what it hands over for six years from the date it submits it.

While performing a HUBZone contract, a company must attempt to keep 35 percent of its staff in a HUBZone. Falling below 20 percent counts as a failure to try and leads to proposed decertification. Bidding on a set-aside counts as a certification of HUBZone status, and a false one can bring False Claims Act penalties and debarment (13 CFR 126.900).

Other certifications work alongside this one. Veteran-owned certification covers the SDVOSB set-asides VA uses, and DBE certification covers work funded by the Department of Transportation.

Keeping hours per driver on file

SBA counts someone as an employee only if the person generally works 10 hours a week during the four weeks before its review, and it checks payroll records for those weeks. HealthRide records each driver’s shift hours and lists them as timecards in the drivers report, so you can see any driver’s hours for a four-week stretch and compare them with what payroll shows. See reports for the driver and timecard views.