Eleven businesses accounted for more than 70 percent of HUBZone dollars awarded, with money often going to wealthier areas.
LaToya White, chief executive of Sylver Rain Consulting, outside her office in the Anacostia neighborhood in Washington. By John D. Harden John D. Harden Metro data reporter Email Bio Follow April 26 at 7:00 AM A federal program created to boost small companies in disadvantaged areas has funneled hundreds of millions of dollars into some of Washington’s most affluent areas, where a handful of businesses have grown while reaping most of the program’s benefits.
The Post sent its findings and methodology to the Small Business Administration’s HUBZone office, which did not dispute the Post’s findings and said the agency’s sole responsibility is to determine eligibility for small businesses. “The program can encourage investment, but it does not have a precision that could be associated with public contributions serving a specific geographic area,” he said.
But a lack of available data hampers federal officials’ abilities to track the program’s effectiveness and determine which areas are benefiting the most, according to the GAO. The analysis confirms what critics and some members of Congress have feared — the program may be falling short of targeting areas of greatest economic distress. Then-Rep. Steve Knight said during a September 2016 meeting of the House Committee on Small Business that “the HUBZone Program has faced some challenges in the past.”
The other 70 percent of federal contracts were nabbed by firms in the city’s three most prosperous areas, which include downtown Washington, Capitol Hill and upper Northwest.About 266 District-based companies were enrolled in the HUBZone program this month, according to the SBA’s database. The businesses offer services such as cyber security, computer repair, physical therapy, interior design, janitorial services, telecommunication and storage.
He attributes some of Computer World Services’s success to the HUBZone program, which has helped the firm procure more than $100 million since 2015 from agencies that include U.S. Citizenship and Immigration Services, the Coast Guard and the Transportation Security Administration. It’s a different story east of the Anacostia River. In Ward 8, the city’s poorest, businesses account for less than 4 percent of HUBZone dollars awarded in the city since 1997.
White said she credits it with helping her business grow in Southeast Washington, even as she waits to land a HUBZone contract. She said she hopes other businesses in poorer areas are given opportunities to prosper. Another roughly 2,500 HUBZones — generally census tracts in urban areas and counties in rural areas — are scheduled to lose their status by January 2020.
In Chicago, Vistas Construction of Illinois was awarded $83 million during the past decade — more than 70 percent of federal HUBZone dollars in the city. In many cases, businesses in the HUBZone program also benefit from other lucrative federal contracts. For example, Akira Technologies, near Union Station, has received $198 million from HUBZone contracts since 2012 — more than any other District business. It also received more than $180 million through other federal small business programs during the same time frame.
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