SBA Extends Moratorium on 8(a) Eligibility Requirement

The U.S. Small Business Administration (SBA) recently announced the extension of the 8(a) Business Development Bona Fide Place of Business (BFPOB) Requirement Moratorium through the end of September 2024. This was first created in 2021 because of the pandemic with remote work becoming commonplace. It enabled participants in the SBA’s 8(a) Business Development Program to forgo the requirement of having an established physical presence in a particular location to be awarded any construction contract through the 8(a) Program.

With remote work continuing to be prevalent and the threat of COVID-19 still looming (albeit to a much lesser extent), this should be welcome news to businesses impacted.

The SBA said that it learned from feedback that the modification to the 8(a) Business Development Program has made it easier for small and disadvantaged businesses to be eligible for 8(a) construction contract awards. The Administration added that it continues to be well received by other federal agencies seeking to increase construction procurement opportunities with small and disadvantaged businesses throughout the nation, but especially in rural and remote areas with population densities lower than the national average. That includes Alaska, where the announcement was made.

SBA Administrator Isabella Casillas Guzman commented, “Small businesses have had to pivot and adapt during the pandemic and continue to focus on more efficiently operating their businesses while expanding to capture more revenues, which is why this moratorium remains critical in today’s marketplace. With this extension, the SBA under the Biden-Harris Administration is again demonstrating its commitment to creating opportunity and leveling the playing field for American entrepreneurs.”

SBA Administrator Isabella Casillas Guzman

The SBA said that during the moratorium, any program participant seeking an 8(a) construction contract (either on a sole source or competitive basis) will not be required to have or establish a BFPOB in any specific location.

A "bona fide place of business" simply means a location where a participant regularly maintains an office that employs at least one full-time person within the designated geographical boundary. Construction trailers and temporary construction sites are not included under this umbrella.

Under the 8(a) Business Development Program, the SBA’s goal is to award at least five percent of all federal contracting dollars to small disadvantaged businesses every year. Eligible companies can compete and receive set-aside and sole-source contracts, as well as one-on-one business development assistance for their nine-year term from dedicated specialists who help companies meet their objectives.

Companies can also pursue mentorship opportunities, connect with procurement and compliance experts, and seek out joining ventures with established businesses to increase capacity. They can even qualify to receive federal surplus property and free training from the SBA’s 7(j) Management and Technical Assistance program.

To qualify for the 8(a) program, businesses must be a small business by SBA standards, not have previously participated in the program, be at least 51 percent owned and controlled by U.S. citizens who are socially and economically disadvantaged, demonstrate good character, been in business for two years, and have a personal net worth of $850K or less, adjusted gross income of $400K or less, and assets totaling $6.5 million or less.