diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/oem-rackspace-0.0.4.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/oem-rackspace-0.0.4.ebuild
index ba7867d65f..d68ebfed67 100644
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/oem-rackspace-0.0.4.ebuild
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-rackspace/oem-rackspace-0.0.4.ebuild
@@ -21,6 +21,8 @@ RDEPEND="
 	coreos-base/nova-agent-watcher
 "
 
+S="${WORKDIR}"
+
 src_prepare() {
 	sed -e "s\\@@OEM_VERSION_ID@@\\${PVR}\\g" \
 	    "${FILESDIR}/cloud-config.yml" > "${T}/cloud-config.yml" || die