8(a) Contracting Program Updates ‘Bona Fide Place of Business’ Rule
Photo Credit: imagesourcecurated | Envato
Amid heightened scrutiny of the US Small Business Administration’s (SBA) 8(a) Business Development program by the Trump administration, Alaska Native corporations have more flexibility with respect to one aspect. Participants in the 8(a) program now have sixty days after receiving a construction contract to comply with the “bona fide place of business” requirement.
Physical Offices in Good Faith
The place of business rule derives from federal statute. Section 8(a)(11) of the Small Business Act, 15 U.S.C. 637(a)(11), requires that: “To the maximum extent practicable, construction subcontracts awarded by the Administration pursuant to this subsection shall be awarded within the county or State where the work is to be performed.”
In 2021, the SBA issued a moratorium on the place-of-business requirement as part of efforts to reduce the COVID-19 pandemic’s effect on small businesses. A press release from Senator Dan Sullivan’s office called it a “novel interpretation,” further stating, “Previously, the SBA had a longstanding practice, which met statutory guidelines, of allowing contracting officers to determine when a bona fide office is required.”
Starting in 2023, Sullivan tried various legislative means to remove the place-of-business requirement, such as amendments to the annual National Defense Authorization Act and in standalone bills.
Current Issue
March 2026
SBA extended the moratorium multiple times until allowing it to end September 30, 2025, with the publication of Policy Notice #6000-874794 four months after Sullivan introduced his 2025 amendment. In the notice, Richard Kingan, the SBA’s associate administrator for government contracting and business development, states, “This will ensure that [p]articipants who are still developing their capacity to take on additional contracting work are not excluded from potential contracting opportunities solely because they have not already invested funds and resources to receive work that they have not yet obtained.”
Attorney Chris Slottee, industry group leader for Schwabe whose practice focuses on working for Alaska Native corporations, says the change is “definitely helpful” and gives companies “greater flexibility.”
The policy notice builds on other 8(a) changes the SBA made in a 2023 final rule. As Slottee notes in a public analysis for Schwabe, that rule eased but did not eliminate the place of business requirement. “In adopting the Final Rule, the SBA recognized the rapid change in working conditions, specifically working from home,” Slottee writes. Since 2023, the SBA has allowed home offices staffed by part-time employees to satisfy the place-of-business requirement.
Chugach Alaska Corporation, which contracts for military construction throughout the continental United States and overseas through its Chugach Government Solutions subsidiary, welcomes the change. “For Alaska Native corporations operating projects nationwide, the requirement to establish and staff a physical office before even bidding on a contract has not been aligned with how modern federal contracting works,” says Chugach President Katherine Carlton. The new approach “strengthen[s] our ability to pursue federal construction opportunities responsibly, compete on merit, and mobilize talent where and when it is needed.”
Furthermore, having sixty days after a contract award to meet this requirement reduces financial risk, according to Natives of Kodiak President and CEO Monica James. “[T]his change provides a clear path moving forward with financial risk mitigation,” James states. “As an Alaskan Native corporation, this will reduce costs without the revenue to support the requirement and ultimately increase our support to our shareholders.”
The clear path has an endpoint, however: SBA Policy Notice #6000-874794 “expires” December 31, 2026. Neither Sullivan’s US Senate office nor SBA staff provided an immediate answer to emails seeking to clarify if the old place-of-business interpretation would resume in 2027.
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