DATE: October 7, 2002

SUBJECT: Small Business Administration; Denial of Waiver of the Nonmanufacturer Rule for Hand and Edge Tool Manufacturing

SOURCE: Federal Register, October 7, 2002, Vol. 67, No. 194, page 62334

AGENCIES: Small Business Administration (SBA)

ACTION: Notice of Denial of Waiver of the Nonmanufacturer Rule

SUMMARY: On July 22, 2002, SBA published a notice that it was considering granting a waiver of the nonmanufacturer rule for hand and edge tool manufacturing under North American Industry Classification System (NAICS) code 332212 because no small business manufacturers were supplying those products to the federal government. Comments received from large and small business manufacturers have made the SBA aware the existence of small business manufacturers of hand and edge tools, so SBA is denying the waiver of the nonmanufacturing rule for NAICS 332212.

EDITOR'S NOTE: For more on the proposed waiver that is being denied, see the July 22, 2002, FEDERAL CONTRACTS DISPATCH "Small Business Administration; Waiver of the Nonmanufacturer Rule for Hand and Edge Tool Manufacturing."

The SBA regulation on the nonmanufacturer rule is in Title 13 of the Code of Federal Regulations (CFR), Business and Credit Administration, Part 121, Small Business Size Standards, under paragraph (b) of 121.406, How Does a Small Business Concern Qualify to Provide Manufactured Products Under Small Business Set-Aside or MED [Minority Enterprise Development] Procurements? The SBA regulation on the waiver of the nonmanufacturer rule is 13 CFR 121.1202, When Will a Waiver of the Nonmanufacturer Rule Be Granted for a Class of Products?

A complete list of products for which the nonmanufacturer rule has been waived is available at http://www.sba.gov/GC/approved.html.

FOR FURTHER INFORMATION CONTACT: Edith G. Butler, Program Analyst, U.S. Small Business Administration, 409 3rd Street, SW, Washington DC 20416, 202-619-0422.

SUPPLEMENTAL INFORMATION: Public Law 100-656, enacted November 15, 1988, requires recipients of federal contracts that are set-aside for small businesses or are awarded through the SBA's 8(a) program for disadvantaged small businesses to provide the product of a small business manufacturer or processor if the recipient is not the actual manufacturer or processor. This is called the "nonmanufacturer rule" (see paragraph (f) of Federal Acquisition Regulation (FAR) 19.102, Size Standards). However, the law permits SBA to waive this requirement for any "class of products" if there are no small business manufacturers or processors in the federal market. SBA considers a small business manufacturer or processor to be in the federal market if it submitted a proposal or received a contract from the federal government within the last 24 months.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2002 by Panoptic Enterprises. All Rights Reserved.

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