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SBA Announces Extension of Moratorium on 8(a) Eligibility Requirement for Small Disadvantaged Businesses


U.S. Small Business Administration

WASHINGTON, June 11, 2024 (GLOBE NEWSWIRE) -- Today,  Administrator Isabel Casillas Guzman, head of the U.S. Small Business Administration (SBA) and the voice in President Biden’s Cabinet for America’s more than 33 million small businesses, announced that the moratorium on the 8(a) Business Development Program’s Bona Fide Place of Business (BFPOB) requirement will be extended through Sept. 30, 2025, for small disadvantaged businesses (SDBs).

The moratorium was enacted in 2021 as a response to the COVID-19 pandemic and remote work conditions in the marketplace so participants in the SBA’s 8(a) Program could forgo the requirement of having an established physical presence in a particular location to be awarded any construction contract through the Program. Based on feedback from 8(a) construction firms, the SBA is once again extending the moratorium due to workforce shortages, cultural shifts in the workplace, and trends favoring remote work opportunities, making it increasingly difficult for small businesses to recruit and retain office-based employees.

“The SBA is committed to meeting businesses where they are and adding flexibility and simplicity whenever feasible to improve access to the agency’s products and services,” said Administrator Guzman. “We recognize that small businesses continue to pivot and adapt to changing workforce trends in the marketplace. As we make progress on achieving President Biden’s goal of awarding 15% of federal contracts to small disadvantaged businesses by 2025, extending the moratorium on the Bona Fide Place of Business requirement will enable SDBs to continue focusing on expanding their business and capturing more revenue.”

“The Bona Fide Place of Business requirement is an especially significant barrier to new entrants into the SBA 8(a) Program. The Native American Contractors Association applauds the SBA for extending this moratorium so that all small businesses can better compete for contracting opportunities," said Katherine Carlton, Co-Chair of the Native American Contractors Association.

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 bona fide place of business in any specific geographic location. This modification has made it easier for SDBs to become eligible for 8(a) construction contract awards and has allowed federal agencies to increase construction procurement opportunities with SDBs across the country – especially in rural and remote areas like Alaska with population densities lower than the national average.

This spring, the SBA announced that the federal government exceeded its annual goal for federal contracting dollars awarded to Small Disadvantaged Businesses (SDBs), set at 12% for FY 2023. SDBs received 12.1% of federal contracts totaling a record $76.2 billion in FY 2023 – surpassing the record set by the Biden-Harris Administration last year of $69.9 billion and marking the third straight year of record-breaking awards to SDBs.

In January 2024, the Biden-Harris Administration announced a bold goal of increasing the share of federal contracting dollars going to SDBs to 15% by FY 2025, a 50% increase from spending levels when he first took office.

Firms participating in the 8(a) Program can email questions to their local servicing District Office or visit: 8(a) Business Development Program.

About the SBA’s 8(a) Business Development ProgramThe SBA certifies small businesses considered socially and economically disadvantaged under its nine-year 8(a) Business Development (BD) Program. The 8(a) BD Program helps these firms develop and grow their businesses through one-to-one counseling, training workshops, management, and technical guidance. It also provides access to government contracting opportunities, allowing them to become solid competitors in the federal marketplace.

About the U.S. Small Business AdministrationThe U.S. Small Business Administration helps power the American dream of business ownership. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow, or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.


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