August 27, 2025: Resuming on October 1, 2025, in compliance with 13 CFR 124.501(k) and 15 USC 637(a)(11), 8(a) participants must have a bona fide place of business within the county or geographic area of contract performance in order to be awarded an 8(a) construction contract. This requirement applies exclusively to 8(a) construction contracts, as determined by NAICS, and generally involves having a brick-and-mortar building (home offices are allowed) in the geographic location of the contract, state business registration or foreign qualification, and SAM.gov registration specific to the BFO location.
Under the Biden administration, the BFO rule was temporarily suspended throughout the COVID-19 pandemic. However, the Trump administration has indicated its intent to allow the BFO moratorium to lapse at the end of Federal Fiscal Year 2025.
2022 Changes to BFO Requirement
While subject to regulatory change, the Biden administration instituted the following changes/clarifications to BFOs in 2022:
Where an 8(a) Participant is currently performing a contract in a specific state, it would qualify as having a bona fide place of business in that state for the duration of the contract.
This is intended to apply specifically where an 8(a) company is performing on a construction contract, and the procuring activity likes the work that the 8(a) company is doing, to facilitate additional awards of 8(a) construction contracts to the company. However, this does not apply to contiguous states – if you wish to pursue work in contiguous states, you must establish and seek approval of a BFO.
At-home offices are eligible for BFO consideration.
As the topography of the workforce has changed as a result of the remote work revolution, SBA is open to considering BFO approval for at-home offices where a full-time employee reports. This is expected to relieve significant recurring costs of a commercial lease and utility payments.
No need to provide a state-issued driver’s license.
SBA clarified that there is no requirement that a specific employee must permanently reside in a specific location, and thus, it is putting a stop to some SBA District Offices’ practices of requiring a state-issued driver’s license as part of the BFO approval process. SBA goes further to say that an 8(a) participant should be able to rotate employees in and out of a specific location as it sees fit, as long as one individual (but not necessarily the same individual) remains at the location.
Multiple Location Contracts
Contracts are to be performed in multiple locations (crossing BFO boundaries), as follows:
Single Award 8(a) Construction Contracts
An 8(a) firm is eligible for a single award 8(a) construction project that spans multiple locations as long as it has a BFO in the location where the majority of work is to be performed.
Multiple Award 8(a) Construction Contracts
An 8(a) firm is required to establish a BFO in any location where work is to be performed. Likewise, an 8(a) firm is eligible to receive orders on a MAC in any jurisdiction where it currently has a BFO.
Possible Statutory Elimination of BFO Requirement
While SBA is gearing up to resume the BFO requirement in FY26, there has been talk about legislative action to remove the statutory requirement altogether. Earlier this year, Senator Dan Sullivan (R-AK) and Representative Nicholas Begich (R-AK) introduced companion bills S. 991 and H.R. 3485, which would repeal the underlying statute of the BFO rule in its entirety. These bills were referred to each chamber’s respective Small Business Committee, and would require passage in both the House and Senate and a signature from the President in order to become law.
Make sure to contact your congressional delegation to share your thoughts on this issue.
Stay tuned as we monitor these developments closely. If you have questions regarding the Bona Fide Office rule, contact Jake Neilson at jake.neilson@govcontractpros.com.
