2011-11142. Small Business Size Standards: Waiver of the Nonmanufacturer Rule

AGENCY:

U.S. Small Business Administration.

ACTION:

Notice of Waiver to the Nonmanufacturer Rule for GEN II and GEN III Image Intensifier Tubes.

SUMMARY:

The U. S. Small Business Administration (SBA) is granting a class waiver of the Nonmanufacturer Rule for GEN II and GEN III Image Intensifier Tubes, Product Service Code (PSC) 5855, Night Vision Equipment under North American Industry Classification System (NAICS) code 333314 (Optical Instrument and Lens Manufacturing). The basis for the waiver is that no small business manufacturers are supplying this class of products to the Federal government. The effect of this waiver will be to 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, Participants in SBA's 8(a) Business Development (BD) Program, or Women-Owned Small Business (WOSB) concerns.

DATES:

This waiver is effective May 26, 2011.

FOR FURTHER INFORMATION CONTACT:

Ms. Amy Garcia, Procurement 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 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.

The SBA received a request on August 13, 2010, to waive the Nonmanufacturer Rule for GEN II and GEN III Image Intensifier Tubes under Product Service Code (PSC) 5855, Night Vision Equipment, Emitted and Reflected Radiation, under North American Industry Classification System (NAICS) code 333314 (Optical Instrument and Lens Manufacturing).

On August 27, 2010, SBA published in the Federal Register a notice of intent to waive the Nonmanufacturer Rule for the above listed item. 75 FR 21427 (2010). SBA explained in the notice that it was soliciting comments and sources of small business manufacturers of this class of products. In addition, SBA conducted market research using the Dynamic Small Business Search (DSBS) database and no small business manufacturers that participate in the Federal market were identified. Lastly, on September 16, 2010, SBA posted a Sources Sought notice on http://www.fbo.gov that it was soliciting comments and sources of small business manufacturers of this class of products.

In response to these notices, SBA received comments from fourteen (14) sources. One respondent, a large business, was identified as a manufacturer of GEN III image intensifier tubes. Thirteen (13) respondents were identified as small business suppliers, distributors, or integrators of GEN II and/or GEN III image intensifier tubes, night vision systems and/or related equipment. Of these respondents, three (3) sources requested that additional related items be considered for waiver: PVS-14, PVS-17, and AVS-9 night vision systems. However, SBA has identified, through market research, and as a result of findings in this case, that one or more small business manufacturers or component assemblers exist for PVS-14, PVS-17, and AVS-9 night vision systems, and, as such, these items do not qualify to be waived under the Nonmanufacturer Rule. 13 CFR 121.406(b), 125.15(c), 127.505. One (1) respondent claimed to be a small business manufacturer of GEN II image intensifier tubes. However, upon further investigation, the source does not qualify as a manufacturer under 13 CFR 121.406(b). Thus, no small business manufacturers of GEN II or GEN III image intensifier tubes that participate in the Federal market were identified.

Consequently, SBA has determined that there are no small business manufacturers of these classes of products, and is therefore granting the waiver of the Nonmanufacturer Rule for GEN II and GEN III Image Intensifier Tubes under PSC 5855, Night Vision Equipment, NAICS code 333314 (Optical Instrument and Lens Manufacturing).

Dated: April 29, 2011.

John W. Klein,

Director, Office of Government Contracting.