Bona fide place of business delayed

Hold on requirement extended to Sept. 30, 2023

      The Small Business Administration has extended the moratorium on enforcement of the bona fide place of business requirement on 8(a) construction contractors until Sept. 30, 2023.

      The 8(a) contractors have another year to prepare for required SBA approval of their bona fide place of business.

      The requirement is based on Section 8(a)(11) of the Small Business Act, which requires that to the maximum extent practicable, 8(a) construction contracts must be awarded to a company in the geographic area where work will be performed. SBA must approve the bona fide place of business, which must be a physical presence in a specific geographic area with one or more full-time employees located in the site.

      In August 2021, SBA put a hold on the requirement for a year while people were teleworking during the pandemic.

      In July 2022, the SBA extended the moratorium for another year until Sept. 30, 2023.

      In a proposed rule on Sept. 9, SBA announced the extension and proposed several clarifications to the bona fide business requirement, including:

• That when an 8(a) firm is currently performing a contract in a specific state, it would qualify as having a bona fide place of business in that state for one or more additional contracts;
• That an 8(a) participant could establish a bona fide place of business through a full-time employee in a home office; and
• That the full-time employee of the 8(a) firm’s bona fide place of business need not be a resident of the state.

More information:
SBA notice: https://bit.ly/3s2baHS

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