SBA is currently considering terminating some class waivers for its small business Nonmanufacturer Rule, as it has received information to established the existence of small business manufacturers of
the subject products.

As SBA explains, the Nonmanufacturer Rule is the “requirement that recipients of Federal supply contracts issued as a small business” or other socioeconomic set-asides (8(a) Program, HUBZone, WOSB/EDWOSB, or VOSB/SDVOSB) “provide the product of a small business manufacturer or processor if the recipient is other than the actual manufacturer or processor of the product” (you can learn more about the specifics of the Nonmanufacturer Rule here).

SBA is authorized to waive the Nonmanufacturer Rule for a “class of products” when “there are no small business manufacturers or processors available to participate in the Federal market.” These waivers can be found on SBA’s List of Class Waivers. But SBA will periodically review this list “to determine whether small business manufacturers or processors have become available to participate in the Federal market.” And “[u]pon receipt of information that such a small business manufacturer or processor exists, the SBA will announce its intent to terminate the NMR waiver for a class of products[,]” which is what SBA has just done here.

As explained in SBA’s first announcement (Fed. Reg. Doc. 2022-03201), SBA is considering terminating the Nonmanufacturer Rule class waiver for:

• Furniture Frames and Parts, Metal, Manufacturing under NAICS code 337215 and PSC 7195;
• Furniture Frames, Wood, Manufacturing under NAICS code 337215 and PSC 7195;
• Furniture Parts, Finished Plastics, Manufacturing under NAICS code 33725 and PSC 7195;
• Furniture, Factory-type (e.g. cabinets, stools, tool stands, work benches), Manufacturing under NAICS code 337127 and PSC 7110;
• Furniture, Hospital (e.g. hospital beds, operating room furniture) Manufacturing under NAICS
  code 339113 and PSC 7195; and
• Furniture, Laboratory-type (e.g. benches, cabinets, stools, tables) Manufacturing under NAICS code 339113 and PSC 7195.

And per the second announcement (Fed. Reg. Doc. 2022-03202), SBA is also considering terminating the Nonmanufacturer class waiver for the following, under Naics Code 334517 and PSC 6525:

• irradiation apparatus manufacturing, computerized axial tomography (CT/CAT) scanners manufacturing;
• CT/CAT (computerized axial tomography) scanners manufacturing;
• fluoroscopes manufacturing;
• fluoroscopic X-ray apparatus and tubes manufacturing;
• generators, X-ray, manufacturing;
• irradiation equipment manufacturing;
• X-ray generators manufacturing; and
• X-ray irradiation equipment manufacturing.

As the SBA explained:

On October 6, 2019, SBA received a request to terminate the current class waiver of the NMR
for the products identified above. According to the request, there are small business
manufacturers available to participate in the Federal marketplace for these products. According
to the information the requester provided to the SBA, several small manufacturers have provided
these products to the Federal agencies within the past 24 months.

Based on this information, the SBA is now seeking comment on all of the potential waiver terminations detailed in these announcements. And unless public comment reveals that there are no small businesses available for these classes of products, SBA will publish its “Final Notice of Termination in the Federal Register” for these class waivers.

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Complying with SBA’s Nonmanufacturer Rule requirements for can be pretty tricky. And failure to comply can result in the loss of an award, contract terminations, and other unfortunate consequences. So it is important to keep up on which products are covered by these class waivers.

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The post SBA Proposes to Eliminate Some Nonmanufacturer Rule Class Waivers first appeared on SmallGovCon - Government Contracts Law Blog.