[Federal Register Volume 64, Number 62 (Thursday, April 1, 1999)]
[Proposed Rules]
[Page 15708]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7740]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 64, No. 62 / Thursday, April 1, 1999 / 
Proposed Rules  

[[Page 15708]]


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SMALL BUSINESS ADMINISTRATION

13 CFR Part 121


Small Business Size Standards; Request for Comments

AGENCY: Small Business Administration.

ACTION: Request for comments.

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SUMMARY: The Small Business Administration (SBA) is requesting public 
comment on the definition ``Manufacturer,'' which appears in SBA's 
regulations on small business size standards, as it applies to the 
computer industry. Because some in the computer industry have 
interpreted this definition too broadly, SBA's Nonmanufacturer Rule may 
have been applied inappropriately. The Nonmanufacturer Rule is intended 
to provide assurance that agency contract awards are directed solely 
for the purpose of assisting and developing small business 
manufacturers. In order to provide more precise guidance on the 
application of the Nonmanufacturer Rule, SBA, in conjunction with 
public input, wants to develop a modern definition of the term 
``Manufacturer'' and to establish a new definition for the term 
``Remanufacturer.''

DATES: Submit comments on or before June 1, 1999.

ADDRESSES: Submit comments to David Wm. Loines, Procurement Analyst, 
U.S. Small Business Administration, 409 3rd Street, SW., Washington, DC 
20416.

FOR FURTHER INFORMATION CONTACT: David Wm. Loines, Procurement Analyst, 
(202) 205-6475, FAX (202) 205-7324.

SUPPLEMENTARY INFORMATION: The Small Business Administration (SBA) is 
requesting public comment on the definition ``Manufacturer,'' which 
appears in SBA's regulations on small business size standards, as it 
applies to the computer industry. In 13 CFR 121.406(b)(2), SBA 
currently defines Manufacturer as ``the concern which, with its own 
facilities, performs the primary activities in transforming inorganic 
or organic substances, including the assembly of parts and components, 
into the end item being acquired.'' Some computer industry businesses 
believe that SBA's definition of Manufacturer is too broad, and allows 
a firm that has made only minor modifications to a finished product 
(manufactured by another company) to be classified as a Manufacturer. 
This loose interpretation of the definition may have caused the 
inappropriate application of SBA's Nonmanufacturer Rule (13 CFR 121.406 
(b)). The Nonmanufacturer Rule is intended to provide assurance that 
agency contract awards are directed solely for the purpose of assisting 
and developing small business manufacturers.
    In order to provide more precise guidance on the application of the 
Nonmanufacturer Rule, SBA, in conjunction with public input, wants to 
develop a current definition of the term ``Manufacturer,'' and a new 
definition for the term ``Remanufacturer.'' SBA has developed the 
following description for Remanufacturer: ``any person that processes, 
conditions, renovates, repackages, restores, or does any other act to a 
finished product that significantly changes the finished products 
performance or specification, or intended use.'' SBA would appreciate 
comments from the public.
    The SBA also seeks public comment and industry-based data on the 
specific questions listed below. Commenters are not limited to, nor 
obligated to address, every question. In providing comments, please key 
your response to the number of the applicable question (e.g., 
``Response to question 1.''). Please be industry specific. Comments 
should be as precise as possible. The use of examples is encouraged.
    Comments are requested on the following issues:
    1. Should small business concerns that make minor modifications to 
finished products be classified as manufacturers?
    2. What is manufacturer in the computer industry (hardware, Value-
added changes, Software)?
    3. What classifies as minor modifications?
    4. Should Value-Added Resellers (VARs) be considered manufacturers?
    5. Should the definition for Remanufacturer be used to describe 
these small businesses?
    6. Your recommendation(s) for classifying these types of small 
businesses as manufacturers.
    7. The impact that a reclassification of these small businesses 
would have on the small business community.

    Dated: March 5, 1999.
Richard L. Hayes,
Associate Deputy Administrator for Government Contracting and Minority 
Enterprise Development.
[FR Doc. 99-7740 Filed 3-31-99; 8:45 am]
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