2010-6355. Small Business Size Standards: Waiver of the Nonmanufacturer Rule

AGENCY:

U.S. Small Business Administration.

ACTION:

Notice of intent to waive the Nonmanufacturer Rule for Liquid Propane Gas (LPG).

SUMMARY:

The U.S. Small Business Administration (SBA) is considering granting a class waiver of the Nonmanufacturer Rule for Liquid Propane Gas (LPG). On December 10, 2009, SBA received a request that a class waiver be granted for liquid propane gas (LPG), Product Service Code (PSC) 6830 (Compressed and Liquefied Gases), under the North American Industry Classification System (NAICS) code 325120 (Industrial Gases Manufacturing). According to the request, no small business manufacturers supply these class of products to the Federal government. On January 12, 2010, SBA issued a notice of intent to waive the Nonmanufacturer Rule for Compressed and Liquefied Gases. 75 FR 1662 (2010). After reviewing the responses to the notice SBA has concluded that the January 12, 2010, notice should have been more specific. Thus, SBA is seeking information on whether there are small business LPG manufacturers. If granted, the waiver would allow otherwise qualified small businesses to supply the products of any manufacturer on a Federal contract set aside for small businesses, Service-Disabled Veteran-Owned (SDVO) small businesses or Participants in the SBA's 8(a) Business Development (BD) program.

DATES:

Comments and source information must be submitted April 7, 2010.

ADDRESSES:

You may submit comments and source information to Amy Garcia, Program Analyst, Small Business Administration, Office of Government Contracting, 409 3rd Street, SW., Suite 8800, Washington, DC 20416.

FOR FURTHER INFORMATION CONTACT:

Ms. Amy Garcia, Program Analyst, by telephone at [phone]; by FAX at [phone]; or by e-mail at [e-mail].

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 contracts set aside for small businesses, SDVO small businesses, or Participants in the SBA's 8(a) BD Program 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). 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. In addition, SBA uses PSCs to further identify particular products within the NAICS code to which a waiver would apply. The SBA may then identify a specific item within a PSC and NAICS to which a class waiver would apply.

The SBA is currently processing a request to waive the Nonmanufacturer Rule for LPG, PSC 6830 (Compressed and Liquefied Gases), under NAICS code 325120 (Industrial Gases Manufacturing). The public is invited to comment or provide source information to SBA on the proposed waiver of the Nonmanufacturer Rule for this product within 15 days after date of publication in the Federal Register. In addition, SBA received several responses to the January 12, 2010, notice from dealers who believe that NAICS code 454312 (Liquefied Petroleum Gas (Bottled Gas) Dealers) is the appropriate NAICS code for this industry. However, wholesale and retail NAICS codes are not applicable to government procurements. 13 CFR 121.201. A procurement for supplies should be classified under the appropriate manufacturing or supply NAICS code. 13 CFR 121.402(b). A firm can qualify as a non-manufacturer on such a procurement if it meets the requirements of 13 CFR 121.406.

Karen Hontz,

Director, Office of Government Contracting.