[Federal Register Volume 85, Number 138 (Friday, July 17, 2020)]
[Page 43634]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15535]



[Docket No. SBA-2020-0014]

Class Waiver of the Nonmanufacturer Rule

AGENCY: U.S. Small Business Administration.

ACTION: Notification of waiver of the Nonmanufacturer Rule for diabetic 
test strips.


SUMMARY: The U.S. Small Business Administration (SBA) is granting a 
class waiver of the Nonmanufacturer Rule (NMR) for diabetic test strips 
under North American Industry Classification System (NAICS) code 325413 
and Product Service Code (PSC) 6515. This U.S. industry comprises 
establishments primarily engaged in manufacturing diabetic test strips.

DATES: This action is effective August 17, 2020.

FOR FURTHER INFORMATION CONTACT: Carol J. Hulme, Attorney Advisor, by 
telephone at (202) 205-6347 or by email at [email protected].

SUPPLEMENTARY INFORMATION: Section 8(a)(17) and 46 of the Small 
Business Act (Act), 15 U.S.C. 637(a)(17) and 657s, and SBA's 
implementing regulations require that recipients of Federal supply 
contracts issued as a small business set-aside (except as stated 
below), service-disabled veteran-owned small business (SDVO SB) set-
aside or sole source contract, Historically Underutilized Business Zone 
(HUBZone) set-aside or sole source contract, WOSB (women-owned small 
business) or economically disadvantaged women-owned small business 
(EDWOSB) set-aside or sole source contract, 8(a) set-aside or sole 
source contract, partial set-aside, or set aside of an order against a 
multiple award contract 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 (NMR). 13 CFR 121.406(b). Note 
that the NMR does not apply to small business set-aside acquisitions 
with an estimated value between the micro-purchase threshold and the 
simplified acquisition threshold. Sections 8(a)(17)(B)(iv)(II) and 
46(a)(4)(B) of the Act authorize SBA to waive the NMR for a ``class of 
products'' for which there are no small business manufacturers or 
processors available to participate in the Federal market.
    The SBA defines ``class of products'' based on a combination of (1) 
the six-digit NAICS code, (2) the four-digit PSC, and (3) a description 
of the class of products. As implemented in SBA's regulations at 13 CFR 
121.1202(c), 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 been 
awarded a contract to supply the class of products within the last 24 
    SBA received a request to waive the NMR for diabetic testing strips 
under NAICS code 325413 and PSC 6515. According to that request, 
submitted with supporting information, there are no small business 
manufacturers of these items in the Federal market.
    On April 20, 2020 (85 FR 08304), the SBA issued a Notice of Intent 
to grant a class waiver for diabetic test strips. SBA received no 
comments in response to the Notice. Therefore, in the absence of a 
small business manufacturer of diabetic test strips, this class waiver 
is necessary to allow otherwise qualified regular dealers to supply the 
product of any manufacturer on a Federal contract or order set aside 
for small business, SDVOSB, WOSB, EDWOSB, HUBZone or participants in 
the SBA's 8(a) Business Development Program. SBA's waiver of the 
nonmanufacturer rule has no effect on the requirements in 13 CFR 
121.406(b)(1)(i) to (iii) and on requirements external to the Small 
Business Act which involve domestic sources of supply, such as the Buy 
American Act or the Trade Agreements Act.
    More information on the NMR and Class Waivers can be found at 

David Wm. Loines,
Director, Office of Government Contracting.
[FR Doc. 2020-15535 Filed 7-16-20; 8:45 am]