Washington (KINY) – U.S. Senators Dan Sullivan and Lisa Murkowski and Representative Mary Sattler Peltola have introduced legislation to remove the Small Business Administration’s (SBA) “bona fide place of business” requirement, which would make 8(a) small business contractors—including disabled-veteran-owned businesses, woman-owned businesses, and Alaska Native Corporations—ineligible for certain government construction contracts if they do not have a physical office headquarters in the state where the construction work is to take place.

SBA previously delayed implementation of the rule during the pandemic, but it is set to take effect on Oct. 1.

“The 8(a) Program was specifically established to benefit disadvantaged communities, but the SBA’s ‘bona fide office’ requirement is poised to stymie that mission and act as a barrier to entry for many small businesses across Alaska and the entire nation,” said Sen. Sullivan. “The reality is, builders frequently have a business footprint—with employees, offices and equipment—that exists across state lines. This SBA policy sets an unreasonable standard, requiring 8(a) small business contractors to have a dedicated office headquarters in every state in which they pursue a government construction contract. I’m putting forward this legislation with Senator Murkowski and Representative Peltola to preserve the opportunities available to 8(a) contractors, opportunities that enrich our communities with jobs, educational opportunities, dividends, and new investments. I urge my colleagues to join us in passing this commonsense statutory fix before the policy is implemented and begins to impact our small businesses.”

“The SBA Bona Fide Place of Business Requirement hurts Alaska Native businesses. By limiting Tribal participation in the SBA 8(a) Small Business Development Program, Tribal members will lose funding for scholarships, bereavement benefits, employment assistance, cultural programs, and other services,” said Senator Murkowski. “The SBA should suspend the requirement while Congress works to pass this bicameral and bipartisan legislation.”

“I am glad that the Alaska and Hawaii delegations have joined together to lift this barrier to success for many small business contractors, including veteran-owned and women-owned businesses,” said Representative Peltola. “The 8(a) small business contracting program was intended to create a path toward opportunity and growth for business owners who had been excluded from these fields in the past. The bona fide office rule would have done the opposite, holding many 8(a) businesses back from pursuing contracts that they were more than capable of fulfilling. These businesses provide jobs, workforce training opportunities, and economic growth by harnessing the unique strengths and experiences of their owners, including Alaska Native Corporations and Native Hawaiian Organizations, and it is a benefit to the whole country when they are allowed to succeed and grow.”

The legislation is cosponsored by Senator Mazie Hirono (D-Hawai’i) in the Senate and Representatives Jill Tokuda and Ed Case (both D-Hawai’i) in the House.

The legislation is endorsed by the Native American Contractors Association and the National 8(a) Association.