One of the rules we get asked about the most as government contracts attorneys is what’s known as the nonmanufacturer rule, 13 C.F.R. § 121.406 (So much so that we felt it wise to go over the rule in one of our “Back to Basics” posts to help clear some things up). It’s pretty understandable why: It has numerous provisions, exceptions, and requirements that can make it pretty difficult to follow. It also shows up in two different regulations: 13 C.F.R. § 121.406 as mentioned above, as well as FAR 19.505. Unfortunately, this often leads to contractors getting tripped up by the rule, either not realizing it applies where it does or, as we’ll explore here, thinking it applies where it doesn’t. Recently, SBA addressed a size protest that asserted the awardee didn’t meet the requirements of the nonmanufacturer rule, and noted to the unfortunate protestor that the rule didn’t apply for the procurement anyways.
Continue readingTag Archives: Non-manufacturer rule
Even Rules have their Limits, Says SBA OHA about the Nonmanufacturer Rule
In a recent size appeal, the SBA OHA made it clear that the nonmanufacturer rule has it limits, and will not apply depending on the dollar value of the acquisition. OHA reminded contractors that the nonmanufacturer rule applies only to acquisitions over the simplified acquisition threshold.
Continue readingSBA Proposes to Eliminate Some Nonmanufacturer Rule Class Waivers
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.
SBA Eliminates Use of Product Service Codes For Nonmanufacturer Rule Class Waivers
As of January 5, 2022, SBA will no longer use Product Service Codes (PSCs) to classify products covered by class waivers for the nonmanufacturer rule. SBA’s rationale for discontinuing PSC’s to classify class waivers is to “improve consistency in the application of class waiver.” SBA will use North American Industry Classification System codes (NAICS) as its sole classification system to identify products covered by class waivers going forward. Notification of the change of SBA’s rule was published in the Federal Register on December 6, 2021.
Continue readingGAO: SBA’s Class Waiver Supported VA SDVOSB Set-Aside Decision
Last month, Steve wrote about a new Class Deviation rule adopted by the VA that, in effect, would limit the VA’s use of class waivers as part of its decision to restrict competition to SDVOSBs (or otherwise issue solicitations as sole source awards). But in an apparent contradiction to this Class Deviation rule, GAO recently denied a challenge to an SDVOSB set-aside decision for a manufacturing solicitation, based in large part on SBA’s adoption of a class waiver for the particular NAICS code.
GAO: Rule of Two Not Satisfied Where Businesses Do Not Manufacture Products
Where an agency buys manufactured goods, the FAR’s Rule of Two is satisfied when two or small business manufacturers of the end products exist. It is not enough, as GAO recently held, for two or more small business distributors of manufactured products to exist.
SDVOSBs And VOSBs: I’ll See You At NVSBE 2015
I am pleased to announce that I will be presenting three Learning Sessions at the 2015 National Veterans Small Business Engagement in Pittsburgh.
My first session, Joint Venturing and Teaming on SDVOSB Set-Aside Contracts, will take place on November 17 at 11:10 a.m. in Room 333. The second session, The SBA’s Proposed New “Universal” Mentor-Protege Program, will be that same day at 3:10 p.m. in Room 413. The third session, Is My Company a “Non-Manufacturer”–The Ins and Outs of the Non-Manufacturer Rule will be held on November 18 at 11:10 a.m. in Room 413.
If you will be attending NVSBE 2015, I hope you’ll make it to my Learning Sessions. See you at the conference!