Small Business Size Standards: Waiver of the Nonmanufacturer Rule

Summary:

The U.S. Small Business Administration (SBA) is denying a request for a waiver of the Nonmanufacturer Rule for Demountable Cargo Containers Manufacturing (Dry Freight Containers/Connex Boxes) based on our recent discovery of small business manufacturers for this class of products. Denying this waiver will require recipients of contracts set aside for small businesses, service-disabled veteran-owned small businesses, or SBA's 8(a) Business Development Program to provide the products of small business manufacturers or processors on such contracts.

Dates:

This notice of denial is effective February 22, 2007.

For further informati0n contact:

Edith Butler, Program Analyst, by telephone at (202) 619-0422; by FAX at (202) 481-1788; or by e-mail at edith.butler@sba.gov.

Supplementary information:

Section 8(a)(17) of the Small Business Act (Act), 15 U.S.C. § 637(a)(17), requires that recipients of Federal contracts set aside for small businesses, service-disabled veteran-owned small businesses, or SBA's 8(a) Business Development Program provide the product of a small business manufacturer or processor, if the recipient is other than the actual manufacturer or processor of the product. This requirement is commonly referred to as the Nonmanufacturer Rule.

The SBA regulations imposing this requirement are found at 13 CFR § 121.406(b). Section 8(a)(17)(b)(iv) of the Act authorizes SBA to waive the Nonmanufacturer Rule for any “class of products” for which there are no small business manufacturers or processors available to participate in the Federal market.

As implemented in SBA's regulations at 13 CFR § 121.1202(c), in order to be considered available to participate in the Federal market for a class of products, a small business manufacturer must have submitted a proposal for a contract solicitation or received a contract from the Federal government within the last 24 months. The SBA defines “class of products” based on a six digit coding system. The coding system is the Office of Management and Budget North American Industry Classification System (NAICS).

The SBA received a request on December 7, 2006, to waive the Nonmanufacturer Rule for Demountable Cargo Containers Manufacturing (Dry Freight Containers/Connex Boxes). Inresponse, on December 21, 2006, SBA published in the Federal Register a notice of intent to waive the Nonmanufacturer Rule for Demountable Cargo Containers Manufacturing (Dry Freight Containers/Connex Boxes). SBA explained in the notice that it was soliciting comments and sources of small business manufacturers of this class of products. In response to that December 21, 2006 notice, SBA received comments from small business manufacturers indicating that it has furnished this product to the Federal government. Accordingly, based on the available information, SBA has determined that there are small business manufacturers of this class of products, and, is therefore denying the class waiver of the Nonmanufacturer Rule for Demountable Cargo Containers Manufacturing (Dry Freight Containers/Connex Boxes), NAICS 336212.

Dated: February 2, 2007. Arthur Collins,

Acting Associate Administrator for Government Contracting.

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