[Federal Register Volume 76, Number 137 (Monday, July 18, 2011)]
[Notices]
[Pages 42157-42158]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-17951]


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 SMALL BUSINESS ADMINISTRATION


Small Business Size Standards; Waiver of the Nonmanufacturer Rule

AGENCY: U.S. Small Business Administration.

ACTION: Notice of Retraction of a Class Waiver

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SUMMARY: The U.S. Small Business Administration (SBA) is terminating a 
waiver of the Nonmanufacturer Rule for Service Code (PSC) 9130, Liquid 
Propellants--Petroleum Base, under North American Industry 
Classification System (NAICS) code 324110 (Petroleum Refineries), based 
on SBA's discovery of small business manufacturers. Terminating this 
waiver will require recipients of Federal contracts set aside for small 
businesses, Service-Disabled Veteran-Owned (SDVO) small businesses, 
Participants in SBA's 8(a) Business Development (BD) Program, or Women-
Owned Small Business (WOSB) concerns to provide the products of small 
business manufacturers or processors on such contracts.

DATES: This action is effective August 2, 2011.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Garcia, Procurement Analyst, 
by telephone at (202) 205-6842; by Fax at (202) 481-1630; or by e-mail 
at [email protected].

SUPPLEMENTARY INFORMATION: Section 8(a)(17) of the Small Business Act 
(Act), 15 U.S.C. 637(a)(17), and SBA's implementing regulations require 
that recipients of Federal supply contracts set aside for small 
businesses, SDVO small businesses, Participants in the SBA's 8(a) BD 
Program, or WOSBs, provide the product of a small business manufacturer 
or processor, if the recipient is other than the actual manufacturer or 
processor of the product. This requirement is commonly referred to as 
the Nonmanufacturer Rule. 13 CFR 121.406(b), 125.15(c), 127.505. 
Section 8(a)(17)(b)(iv) of the Act authorizes SBA to waive the 
Nonmanufacturer Rule for any ``class of products'' for which there are 
no small business manufacturers or processors available to participate 
in the Federal market.
    In order to be considered available to participate in the Federal 
market for a class of products, a small business manufacturer must have 
submitted a proposal for a contract solicitation or received a contract 
from the Federal Government within the last 24 months. 13 CFR 
121.1202(c). The SBA defines ``class of products'' based on the Office 
of Management and Budget's NAICS. SBA also uses product service codes 
to further define a class of products with an industry.
    On June 8, 2009, SBA granted a class waiver for liquid propellants-
petroleum. 74 FR 27202. Liquid propellants-petroleum based are 
identified in NAICS code 324110 under PSC 9130. Soon after the class 
waiver was

[[Page 42158]]

published, SBA was notified by the Defense Logistics Agency, Defense 
Energy Support Center (DESC), Fort Belvoir, VA, that the agency has 
awarded prime contracts to, or received offers from, small business 
refiners. On August 4, 2009, SBA published a proposed Notice of 
Retraction of a Waiver from the Nonmanufacturer Rule for PSC 9130 
(Liquid Propellants--Petroleum Base), under NAICS code 324110 
(Petroleum Refineries) seeking comments on the proposed retraction of 
waiver. 74 FR 18584. A final Notice of Retraction of a Waiver was not 
published. Consequently, on June 3, 2011, SBA again issued a Federal 
Register notice of its intent to retract the class waiver (76 FR 
13777), seeking comments on the proposed retraction.
    SBA received two responses to this notice, one from a Federal 
agency and one from a small business nonmanufacturer. One 
nonmanufacturer objected to the proposed termination of the waiver. 
However, the nonmanufacturer did not provide evidence that small 
business manufacturers are not available to participate in the Federal 
marketplace. Instead, the nonmanufacturer indicated termination of the 
class waiver may hinder its ability to compete for set-asides in 
certain circumstances. However, the underlying purpose of the Small 
Business Act's manufacturing requirements is to encourage small 
business manufacturing. Thus, if small business manufacturers exist 
that can satisfy a particular requirement, then an offeror must supply 
the product of a small business manufacturer. If these performance 
requirements cannot be met, a contracting officer may request an 
individual waiver in connection with a specific contract. A class 
waiver is only appropriate if no small business manufacturer is 
available to participate in the Federal marketplace, and based on 
available evidence, small business manufacturers are participating in 
this Federal marketplace for this item. In a letter to SBA dated June 
20, 2011, DLA identified seven (7) small business refiners to which DLA 
has awarded prime contracts to, or received offers from, who 
participate in the Federal market.
    Therefore, SBA is retracting the Nonmanufacturer Rule class waiver 
previously granted for PSC 9130 (Liquid Propellants--Petroleum Base), 
under NAICS code 324110 (Petroleum Refineries).

John W. Klein,
(Acting) Director, Office of Government Contracting.
[FR Doc. 2011-17951 Filed 7-15-11; 8:45 am]
BILLING CODE 8025-01-P