[Federal Register Volume 86, Number 231 (Monday, December 6, 2021)]
[Pages 69113-69114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26371]



[Docket No. SBA-2021-0012]

Class Waiver of the Nonmanufacturer Rule

AGENCY: U.S. Small Business Administration.

ACTION: Notice of change to the Nonmanufacturer Rule.


SUMMARY: In the interest of efficiency and transparency the U.S. Small 
Business Administration intends to eliminate the use of Product Service 
Codes (PSC) to determine whether an item falls within a class waiver.

DATES: This action is effective January 5, 2022.

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

[[Page 69114]]

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 but continues to apply to socioeconomic 
categories above the micropurchase threshold.
    Sections 8(a)(17)(B)(iv)(II) and 46(a)(4)(B) of the Act authorizes 
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. As defined in 13 CFR 121.1202(d), a ``class of 
products'' is an individual subdivision within a North American 
Industry Classification System (NAICS) Industry Number as established 
by the Office of Management and Budget in the NAICS Manual. SBA has 
previously identified class waivers using a combination of (1) the six-
digit NAICS code, (2) the four-digit PSC, and (3) a description of the 
class of products.
    To improve consistency in the application of class waivers SBA will 
no longer use PSCs to classify products covered by class waivers. 
Instead, as provided in its regulations, SBA will use the NAICS as its 
classification system to identify products covered by class waivers.
    More information on the NMR and Class Waivers can be found at 

David Wm. Loines,
Director, Office of Government Contracting.
[FR Doc. 2021-26371 Filed 12-3-21; 8:45 am]