Small Business Size Standards: Waiver of the Nonmanufacturer Rule

AGENCY:

U.S. Small Business Administration.

ACTION:

Notice of intent to terminate waivers of the Nonmanufacturer Rule for General Aviation Turboprop Aircraft.

SUMMARY:

The U.S. Small Business Administration (SBA) intends to terminate the waiver of the Nonmanufacturer Rule for General Aviation Turboprop Aircraft. SBA's intent to terminate the waivers of the Nonmanufacturer Rule is based on our recent discovery of a small business manufacturer for these classes of products. Terminating these waiver will require recipients of contracts set aside for small businesses or 8(a) Business Development Program provide the products of small business manufacturers or processor on such contracts.

DATES:

Comments and sources must be submitted on or before July 2, 2004.

FOR FURTHER INFORMATI0N CONTACT:

Edith Butler, Program Analyst, by telephone at (202) 619-0422; by FAX (202) 205-7280; 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 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 121.1204, in order to be considered available to participate in the Federal market for a class of product, 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 the six digit North American Industry Classification System (NAICS) and the four digit Product and Service Code established by the Federal Procurement Data System.

The SBA received a request on January 12, 2004 to waive the Nonmanufacturer Rule for General Aviation Turboprop Aircraft. In response, on February 4, 2004, SBA published in the Federal Register a notice of intent to grant the waiver of the Nonmanufactuer Rule for General Aviation Turboprop Aircraft. On March 15, 2004, SBA issued a notice of waiver of the Nonmanufacturer Rule for General Aviation Turboprop Aircraft. In responses to these notices, no comments were received from any interested party. However, we recently discovered that the class of products was incorrectly classified as NAICS 441229. The correct NAICS code for Aircraft Manufacturing is NAICS 336411.

This notice proposes to terminate the class waivers of the Nonmanufacturer Rule for General Aviation Turboprop Aircraft, NAICS 441229.

The public is invited to comment to SBA on the proposed termination of the waivers of the nonmanufacturer rule for the class of products specified. All comments by the public will be duly considered by SBA in determining whether to finalize its intent to terminate these classes of products.

Authority: 15 U.S.C. 637(a)(17).