The 8(a) Business Development Program, managed by the Small Business Administration and authorized by Congress in 1978, provides federal contracts, training, and technical assistance to socially and economically disadvantaged small business owners. It serves as a strategic pathway for small businesses seeking federal contracting opportunities.
Prior to August 25, 2021, 8(a) companies seeking to qualify for the award of 8(a) construction contracts were required to establish and maintain a bona fide office within the meaning of 13 CFR Section 124.3. That regulation defines bona fide place of business as “a location where a Participant regularly maintains an office which employs at least one full-time individual within the appropriate geographical boundary.” The term does not include construction trailers or other temporary construction sites.
8(a) businesses were required to request approval of the bona fide office from their home SBA district office; the SBA office then forwarded the request to the SBA office servicing the area in which the bona fide office was located. Requests could be submitted at any time after an office was established; but if an 8(a) business hoped for approval for a specific opportunity, the request had to be submitted at least 20 working days before the date proposals were due.
Businesses were required to provide the SBA with evidence that they were conducting business activities as an ongoing business concern from a fixed location on a daily basis, and that third parties conducted business with the 8(a) entities from the location. Also, they had to provide evidence that the full-time employee was not an independent contractor, did not work for other businesses during normal business hours, and conducted activities of the 8(a) during normal business hours. After reviewing the documentation and conducting a site visit, the SBA issued a formal determination.
On August 27, 2021, the SBA announced a moratorium on the bona fide place of business rule. During the moratorium, any 8(a) Program participant seeking an 8(a) construction contract (either on a sole source or competitive basis) has not been required to have or establish a bona fide place of business in any specific geographic location.
The moratorium—implemented during the COVID-19 pandemic to accommodate remote operations—was always intended as a temporary suspension of the requirement for participants to maintain a physical office in the geographic area of a bid. In fact, despite the moratorium, SBA made changes to the rule during the moratorium.
On June 17, 2025, SBA announced that the moratorium will end on September 30, 2025. Effective October 1, 2025, businesses seeking 8(a) construction contracts must have an office that is operational and supported by documentation such as a lease, business license, and proof of employees in any area where they intend to perform a federal contract. For example, a Northern Virginia company pursuing a project in Florida will need an operational office in Florida and must register to do business there; must enter into formal lease or purchase agreements to establish its office; must stand ready to produce payroll records, tax records, and other documentation to establish that its full-time employee works 20 or more hours per week during normal business hours.
To prepare for the reinstatement of the rule, businesses are encouraged to establish a physical office, to document compliance with all local and or state rules pertaining to the operation of the business of its kind in any jurisdiction, and obtain approval from SBA of the office.
It seems likely that there will be a crush of requests for approval. It is also likely that there will be fewer SBA personnel to review documents and conduct site visits. If that turns out to be true, those businesses that start the process and seek approval sooner, rather than later, may find themselves well ahead of the pack.
