New SBA Policy Opens Doors for Small Business Bids
If you’ve ever lost a federal opportunity because your company didn’t yet have a staffed office in the right state, that barrier just got a lot smaller. A recent SBA policy change gives small businesses 60 days after award to establish a physical location instead of forcing that location to exist before bidding. That’s a practical game-changer for many federal contractors.
What Just Changed and Why It Matters
The Small Business Administration (SBA) has updated a rule that affects small businesses participating in federal contracting programs, such as the 8(a) program.
Old rule:
New rule:
Why this matters for Federal Contractors and Small Businesses
What Federal Contractors Should Do Now
This policy shift is an opportunity—but only for firms that get proactive. Here are practical steps you can take:
1. Review your teaming and subcontracting strategy
Take a fresh look at your active and recent relationships with large primes and key subcontractors. Map where you currently partner and assess whether past concerns about size or affiliation caused you to avoid otherwise strategic relationships. This is the moment to reassess those assumptions and identify where more intentional teaming could strengthen your competitive position.
2. Revisit pipeline opportunities you previously avoided
Re-examine complex set-aside opportunities where you may have assumed you were “too small” to prime. With a clearer policy environment, a stronger and more transparent teaming structure may now be viable. Opportunities that once felt out of reach could become realistic with the right partners and positioning.
3. Strengthen your independence—on paper and in practice
Ensure your operating agreement, ownership structure, and control mechanisms clearly demonstrate independence from any large business partner. In practice, avoid arrangements that grant a large firm veto power over your decisions, staffing, or bidding strategy. Both documentation and day-to-day operations should consistently reflect that your firm is in control.
4. Update internal talking points and capture plans
Train your business development, capture, and proposal teams on the updated policy environment so they stop self-censoring partnerships that are now clearly permissible. Incorporate narrative language into capture strategies and proposals that explains how your teaming approach increases competition, reduces risk, and delivers greater value to the government.
5. Document “commercial reasonableness”
When relying on a large partner for specialized or niche capabilities, be prepared to clearly articulate why the arrangement is commercially reasonable, standard within the industry, and beneficial to the agency. Maintain documentation of your own past performance, key personnel, and independent decision-making authority to reinforce your firm’s autonomy.
Pitfalls and Compliance Reminders
This change expands access but it doesn’t remove all obligations. Keep these guardrails front and center:
Your Next Move
This change to SBA’s approach to small business contracting, highlighted in Senator Sullivan’s recent press release, is a reminder that policy really can move in favor of small federal contractors. You can read the original announcement here Read More: