Congress removes local-preference rule from federal small-business contracting
S. 991 — A bill to amend the Small Business Act to eliminate certain requirements relating to the award of construction subcontracts within the county or State of performance. · Filed by Dan Sullivan (R-AK) · 2 cosponsors · Introduced Mar 12, 2025 · Referred to committee
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What it does
This bill repeals a Small Business Act requirement that construction subcontracts awarded under the 8(a) program must be performed within the same county or state. The effect is to allow 8(a) contractors to award subcontracts to firms located anywhere in the country, removing a geographic restriction on where work can be performed.
Why we flagged it
The bill removes a geographic constraint on federal small-business contracting, allowing national competition for subcontracts instead of local preference. This is a straightforward deregulatory measure that expands the scope of where 8(a) work can be performed.
What the text implies
- Repealing the local-performance requirement may concentrate subcontracting work in regions with established contractor networks and lower labor costs, potentially disadvantaging rural and economically distressed areas that benefited from the geographic preference.
- The change may reduce the economic multiplier effect of federal contracting in smaller communities, as dollars previously required to stay local can now flow to distant subcontractors.
The full analysis lists 3 implications of this text.
Who stands to gain
8(a) prime contractors (increased flexibility to reduce costs); Subcontractors in low-cost regions (expanded market access)