The SBA’s Suspension Rule on Bona Fide Place in the 8(a) Program

Good news for 8(a) certification-owned enterprises interested in working on government construction projects this year! Due to the ongoing challenges of COVID-19, the US Small Business Administration (SBA) recently announced a moratorium on the requirement that participants in the SBA's 8(a) Business Development Program establish a bona fide place of business in a specific geographic area before being awarded any construction contract through the 8(a) Program. No other SBA small business program has a requirement like this, and no major company is held to the same standard. Please keep in mind that the new policy is simply a workaround.


What is a BFPOB (bona fide place of business)?
A bona fide place of business, for 8a certification construction procurements, is a location where a participant maintains a regular office that employs at least one full-time employee within the proper geographical boundary. Construction trailers and other temporary construction sites are not included in this definition. The SBA attempted to make obtaining SBA administrative approval easier under recent regulation amendments.

What exactly is the rule?
This type of local office is usually required for a company to be qualified for certain federal construction projects. To the utmost extent practical, 8(a) certification construction contracts shall be awarded within the county or state where the work is to be executed," the Small Business Act states. 637(a) of the United States Code (11). This statutory requirement was executed by the SBA, which required a Program Participant seeking an 8(a) construction contract to create a BFPOB in a certain geographic region.

SBA Regulations States that:
Competitions in construction. SBA will determine whether a competitive 8(a) certification construction requirement should compete among only those Participants who have a bona fide place of business within the geographical boundaries of one or more SBA district offices, within a state, or within the state and nearby areas, based on its knowledge of the 8(a) BD portfolio. Only participants with legitimate business locations within the specified geographic parameters are eligible to submit bids.

The 8(a) BFPOB Rule will be put on hold for a year.

SBA used the Biden Administration's extension of some COVID-19 emergency processes and authority to grant a one-year freeze on the 8(a) BFPOB regulation in a news release issued on August 26, 2021. The Small Business Administration (SBA) believes that this change to the 8a certification Program will make it easier for small disadvantaged enterprises to obtain 8(a) construction contracts.

SBA Regulations States that:
Any 8a certification Program participant seeking an 8(a) construction contract (on a sole source or competitive basis) during the moratorium will not be required to have or create a bona fide place of business in any specified geographic location.

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