Termination of the Waiver of the Nonmanufacturer Rule

AGENCY:

U.S. Small Business Administration (SBA).

ACTION:

Final rule.

SUMMARY:

The decision to terminate this waiver of the Nonmanufacturer Rule is based on evidence provided to the SBA that there are small businesses which manufacturer items within this class of product. Terminating this waiver will require recipients of contracts set aside for small or 8(a) businesses to provide the product of domestic small business manufacturers or processors where this class of product is required. A notice to terminate a waiver of the Nonmanufacturer Rule appeared in the Federal Register on October 29, 2003 (68 FR 61636). Comments from this notice were received from small business manufacturers. Our knowledge of the existence of small business manufacturers requires us to terminate the waiver of the Nonmanufacturer for Ammunition (except small arms) Manufacturing, NAICS 332993, in accordance with 13 CFR 121.1204 (a)(7).

EFFECTIVE DATE:

January 30, 2004.

FOR FURTHER INFORMATION CONTACT:

Edith G. Butler, Program Analyst, U.S. Small Business Administration, 409 3rd Street, SW., Washington, DC 20416, Tel: (202) 619-0422.

SUPPLEMENTARY INFORMATION:

Public Law 100-656, enacted on November 15, 1988, incorporated into the Small Business Act the previously existing regulation that recipients of Federal contracts set aside for small businesses or SBA 8(a) Program procurement must provide the product of a small business manufacturer or processor, if the recipient is other than the actual manufacturer or processor. This requirement is commonly referred to as the Nonmanufacturer Rule. The SBA regulations imposing this requirement are found at 13 CFR 121.906(b) and 121.1106(b). Section 303(h) of the law provides for waiver of this requirement by SBA for any “class of products” for which there are no small business manufacturers or processors in the Federal market. To be considered available to participate in the Federal market on these classes 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 North American Industry Classification System (NAICS) and the four digit Product and Service Code established by the Federal Procurement Data System.