[Federal Register Volume 78, Number 192 (Thursday, October 3, 2013)]
[Notices]
[Pages 61443-61444]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-24210]


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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 Final Action: Partial Waiver Rescission of the 
Nonmanufacturer Rule for Aerospace Ball and Roller Bearings.

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SUMMARY: The U.S. Small Business Administration (SBA) received a 
request from a small business manufacturer of Aerospace Ball and Roller 
Bearings to rescind the Class Waiver of the Nonmanufacturer Rule (NMR) 
for Aerospace Ball and Roller Bearings, under North American Industry 
Classification System (NAICS) code 332991, Product Service Codes (PSC) 
3110. Based on public comments and analysis of data submitted, SBA has 
determined that several small business manufacturers of aerospace ball 
and roller bearings exist for many, but not all, of the aerospace ball 
and roller bearings the Federal government requires. As a result, SBA 
is partially rescinding the Class Waiver for aerospace ball and roller 
bearings and replacing it with a class waiver for 305 aerospace ball 
and roller bearings. A list of the specific 305 aerospace ball and 
roller bearings can be accessed by accessing the following URL: http://www.sba.gov/sites/default/files/files/NMR_WAIVED_3110_BEARING_LIST.pdf. The partial rescission of this class waiver will require 
recipients of Federal contracts set aside for small businesses, 
Service-Disabled Veteran-Owned small businesses, Participants in SBA's 
8(a) Business Development Program, or Women-Owned Small Businesses to 
provide aerospace ball and roller bearings manufactured by small 
businesses, unless an Individual Waiver of the NMR is granted by SBA or 
the required bearing is found on the list of aerospace ball and roller 
bearings for which a class waiver has been granted, maintained by SBA 
at the aforementioned URL.

DATES: This action is effective the date of publication in the Federal 
Register.

FOR FURTHER INFORMATION CONTACT: Edward Halstead, (202) 205-9885, 
[email protected].

SUPPLEMENTARY INFORMATION: Sections 8(a)(17) and 46 of the Small 
Business Act (the Act) and SBA's implementing regulations generally 
require that recipients of Federal supply contracts that are set aside 
for small businesses, Service-Disabled Veteran-Owned small businesses, 
Women-Owned Small Businesses, or Participants in the SBA's 8(a) 
Business Development Program provide the product of a domestic small 
business manufacturer or processor if the recipient is other than the 
actual manufacturer or processor of the product. 15 U.S.C. 637(a)(17), 
657s; 13 CFR 121.406(b). This requirement is commonly referred to as 
the Nonmanufacturer Rule. 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 or 
received a contract from the Federal government within the last 24 
months. See 13 CFR 121.1202(c). SBA defines ``class of products'' as an 
individual subdivision within a North American Industry Classification 
System (NAICS) Code as established by the Office of Management and 
Budget in the NAICS Manual. See 13 CFR 121.1202(d). In addition, SBA 
uses Product Service Codes (PSCs) to further identify particular 
products within the NAICS code to which a waiver would apply. SBA may 
then identify a specific item within a PSC and NAICS code to which a 
class waiver would apply.
    On April 16, 2001, SBA granted a class waiver for aerospace ball 
and roller bearings, consisting of, but not limited to, annular ball 
bearings, cylindrical ball bearings, linear ball bearings, linear 
roller bearings, needle roller bearings, ball or roller bearing races, 
roller bearings, tapered roller bearings and thrust roller bearings, 
identified within NAICS code 332991 under PSC 3110. 66 FR 19381.
    Subsequently, a small business manufacturer of roller bearings 
notified SBA that their firm had lost several aerospace ball and roller 
bearing contract bids based on the existence of the class waiver and 
brought to SBA's attention that several small business manufacturers of 
roller bearing had submitted proposals for bearings contracts or 
received bearings contracts from the Federal government within the 
previous 24 months.
    On April 4, 2013, SBA published a notice in the Federal Register 
stating that SBA was considering a complete rescission of the NMR class 
waiver for aerospace ball and roller bearings. 78 FR 20371. The initial 
public comment period closed May 4, 2013. Subsequently, the public 
comment period was extended once and reopened once, and closed for the 
final time on June 25, 2013. Fourteen comments were received from ten 
submitters.
    Some commenters opposed a total rescission of the class waiver. A 
small business distributor of aerospace ball and roller bearings 
expressed concern that a total rescission would have a

[[Page 61444]]

devastating impact on small value-added distributers. As such, the 
commenter suggested that SBA analyze data to determine which specific 
bearings, if any, are manufactured by small manufacturers. A small 
businesses manufacturer of bearings expressed similar concern over the 
impact of a complete rescission of this class waiver.
    Several commenters supported the proposal for a total rescission of 
the class waiver. One commenter stated that the class waiver has 
resulted in severely limiting opportunities for small business 
manufacturers of these items and acted as a disincentive to a number of 
small business manufacturers to develop and sell products under this 
category. Another commenter supported the proposal on the basis that 
its participation in the federal arena was paramount to its continued 
viability.
    The Defense Logistics Agency (DLA) suggested a partial rescission 
of the class waiver, based on the possible damage to the small business 
dealer base that might result from a complete rescission of the class 
waiver. DLA provided a list of bearings for which there was no known 
small business manufacturers in existence. Another commenter expressed 
support for DLA's recommendation of a partial rescission. The commenter 
noted that a partial rescission of the class waiver would strike the 
balance of meeting the Government's needs while stimulating the growth 
and development of small business manufacturers of aerospace ball and 
roller bearings who have the capabilities and resources to meet 
standard commercial item descriptions. The commenter further noted that 
a partial rescission of the class waiver would not only invigorate 
domestic small business bearing manufacturers to develop new procedures 
and abilities, but it would also encourage others who have been on the 
side lines because of this waiver to reenter the market and some to 
enter the market.
    SBA considered all of the comments and data presented by all of the 
commenters. After conducting independent market analysis, analyzing the 
data submitted by DLA and small bearing manufacturers, and considering 
public comments, SBA has decided to partially rescind the Aerospace 
Ball and Roller Bearing Class Waiver and replace it with a waiver for 
305 specifically identified aerospace ball and roller bearings, which 
can be viewed at: http://www.sba.gov/sites/default/files/files/NMR_WAIVED_3110_BEARING_LIST.pdf.

Judith Roussel,
Director, Office of Government Contracting.
[FR Doc. 2013-24210 Filed 10-2-13; 8:45 am]
BILLING CODE 8025-01-P