SBA requires that, for 8(a) Program construction contract set-asides, the contractor must have a “a bona fide place of business in the applicable geographic area.” 13 C.F.R. § 124.501. In 2021, SBA suspended the enforcement of this requirement in light of the COVID-19 pandemic. On June 17, 2025, SBA announced that this moratorium is coming to an end. In this post, we’ll look at the rule and what the end of this moratorium means for 8(a) construction contractors.
The Bona Fide Place of Business Requirement
The “bona fide place of business” requirement is one we have explored in the past. In fact, in 2023, despite the ongoing moratorium, SBA made a few amendments to the rule for clarification. Essentially, the idea is that, in order to receive an 8(a) set-aside construction contract, the contractor must have an actual place of business in the area the work will be performed. Specifically, 13 C.F.R. § 124.3 defines a “bona fide place of business” as “a location where a Participant regularly maintains an office within the appropriate geographical boundary which employs at least one individual who works at least 20 hours per week at that location.” Basically, SBA is looking for a permanent office (although if you’re presently performing a federal contract in a given state, SBA will say you have a bona fide place of business solely for that state for the duration of that contract). Home offices will count. You can have more than one bona fide place of business too, so this isn’t like the principal office requirement with HUBZone.
Furthermore, a contractor has to submit their claimed bona fide place of business for approval to the SBA district office for that location under 13 C.F.R. § 124.501(k)(2). This can be done with regards to a specific procurement or just in general. SBA has to approve of the bona fide place of business before award can be made. That said, a contractor can still submit an offer on the assumption it was approved if it has been waiting for over 15 working days since SBA received the request (five working days from a site visit if SBA conducts one) and hasn’t got a response.
Of course, this leaves one question: What area does the bona fide place of business cover? First, the regulation notes that “[a] Participant with a bona fide place of business within a state will be deemed eligible for a construction contract anywhere in that state (even if that state is serviced by more than one SBA district office).” So, if you have a bona fide place of business in, say, Los Angeles, that will be sufficient for any 8(a) construction contracts to be performed in California. Of course, many companies have places of business that are near the border with other states. With regards to locations outside the state, it is essentially up to the SBA area office’s determination. The regulation does give some general guidance on what area the bona fide place of business will be found to cover: “This will generally be the geographic area serviced by the SBA district office, a Metropolitan Statistical Area (MSA), a contiguous county (whether in the same or different state), or the geographical area serviced by a contiguous SBA district office to where the work will be performed.” Essentially, then, unless the location of the contract is in the same state as your already SBA-approved bona fide place of business or you have otherwise gotten SBA’s approval that your place of business is within the area of the contract, you need to submit the bona fide place of business to the SBA area office for the contract site for approval.
Oh, one last thing on contracts where work in multiple locations is required: If it’s a single-award contract, you have to have a bona fide place of business where the majority of the work (as determined by dollar value of the work) will be performed. If it’s a multiple-award contract, as long as you have a bona fide place of business at any location where work is to be performed, that will suffice.
End of the Moratorium
As noted above, SBA suspended this requirement in 2021. Therefore, if you receive an 8(a) set aside construction contract in the past few years, you should not be alarmed that you did not submit a bona fide place of business approval request for the contract. However, on June 17, 2025, SBA announced the moratorium is ending. The good news is you have an upcoming bid is that the moratorium did not end as of the date of that announcement. To give contractors time to adjust, the moratorium will end on September 30, 2025. After that time, the bona fide place of business requirement will apply again. From that date on, you will need to have an established bona fide place of business in the area of the contract for all 8(a) construction set asides.
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