SBA Final Rule Updates Employee-Based Size Standards, but not for Nonmanufacturer Rule

This month, SBA issued a final rule updating its size standards for multiple NAICS codes in the manufacturing industries and industries with employee-based size standards in other sectors (except wholesale trade and retail trade). As the final rule explains in great detail, SBA increased some of the NAICS code’s size standards and retained others. Additionally, SBA decided to retain an employee based size standard for the nonmanufacturer rule. Let’s take a closer look.

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SBA Updates Size Standards for Wholesale Trade and Retail Trade

SBA has issued new size standards for industries in the Wholesale Trade and Retail Trade sectors. The interesting thing about these size standards is that they don’t apply to federal procurement actions. Instead, there is a different size standard for supply contracts. So, did SBA see fit to increase the supply-contract size standard?

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Back to Basics: The Nonmanufacturer Rule

To qualify as a small business under most set-aside or sole-source contracts seeking manufactured products or supplies, SBA’s regulations require an offeror to be the item’s manufacturer or, alternatively, comply with the nonmanufacturer rule.

In this post, we’ll discuss qualifying under the nonmanufacturer rule.

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SBA 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.

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SBA Eliminates Use of Product Service Codes For Nonmanufacturer Rule Class Waivers

As 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.

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Event: The Basics of Small Business Limitations on Subcontracting and Nonmanufacturer Rule Compliance Webinar, Hosted by EPHCC

Koprince McCall Pottroff LLC presents a webinar hosted by EPHCC that covers two important topics in federal government contracting – Limitations on Subcontracting and the Nonmanufacturer Rule.

For small businesses and their teammates, few topics in government contracting are as confusing as the limitations on subcontracting for set-aside and socioeconomic sole source contracts.  And if that isn’t stressful enough, the “LoS” is an area of heavy enforcement: get it wrong, and a contractor can face major penalties. 

The nonmanufacturer rule is one that is commonly misunderstood in the federal government contracting realm. But it is also one we encounter quite often in our role assisting federal contractors.

On December 8, join me, Shane McCall, as I go over both of these important topics in plain English in a single webinar.

To register, just click here.

Event: Understanding and Complying with the Nonmanufacturer Rule (2021 Update)

The nonmanufacturer rule is one that is commonly misunderstood in the federal government contracting realm. But it is also one we encounter quite often in our role assisting federal contractors.

On November 4, please join me, Shane McCall, and my colleague, Nicole Pottroff, as we dive deep into the nonmanufacturer rule, tackling the ins and the outs and answering some of your questions surrounding it. The webinar will be hosted by our friends at Govology, and it is easy to register: just click here.