Class Waiver of the Nonmanufacturer Rule, 13692 [2020-04681]

Agencies

• SMALL BUSINESS ADMINISTRATION

[Federal Register Volume 85, Number 46 (Monday, March 9, 2020)]
[Notices]
[Page 13692]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-04681]


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SMALL BUSINESS ADMINISTRATION

[Docket No.: SBA-2019-0011]


Class Waiver of the Nonmanufacturer Rule

AGENCY: U.S. Small Business Administration.

ACTION: Notification of waiver of the Nonmanufacturer Rule for 
commercially available off-the-shelf laptop and tablet computers.

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SUMMARY: The U.S. Small Business Administration (SBA) is granting a 
class waiver of the Nonmanufacturer Rule (NMR) for commercially 
available off-the-shelf laptop and tablet computers under North 
American Industry Classification System (NAICS) code 334111 and Product 
Service Code (PSC) 7435. This U.S. industry comprises establishments 
primarily engaged in manufacturing laptop and tablet computers.

DATES: This action is effective April 8, 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 
months.
    On July 26, 2019, SBA received a request to waive the NMR for 
commercially available off-the-shelf laptops and tablet computers under 
NAICS code 334111 and PSC 7435. According to that request, submitted 
with supporting information, there are no small business manufacturers 
of these items in the Federal market.
    On December 17, 2019 (84 FR 69010), the SBA issued a Notice of 
Intent to grant a class waiver for commercially available off-the-shelf 
laptops and tablet computers. SBA received 41 comments in response to 
the Notice. All comments supported the issuance of the class waiver as 
there are no small business manufacturers in the Federal market for 
commercially available off-the-shelf laptops and tablet computers.
    As expressed in the Notice of Intent, SBA limits this class waiver 
to laptops and tablet computers procured by the government that meet 
the Federal Acquisition Regulation (FAR) definition of ``commercially 
available off-the-shelf (COTS)'' items. In FAR section 2.101, the FAR 
defines the term ``commercially available off-the-shelf (COTS) item'' 
as follows: ``(1) Means any item or supply (including construction 
material) that is--(i) A commercial item (as defined in paragraph (1) 
of the definition in this section); (ii) Sold in substantial quantities 
in the commercial marketplace; and (iii) Offered to the Government, 
under a contract or subcontract at any tier, without modification, in 
the same form in which it is sold in the commercial marketplace; and 
(2) Does not include bulk cargo, as defined in 46 U.S.C. 40102(4), such 
as agricultural products and petroleum products.''
    SBA received 41 comments in response to the Notice of Intent. All 
comments were in support of the waiver. Although none of the comments 
mentioned specialty laptops and tablet computers that are modified to 
meet demands of the Federal Government, those items are not included in 
the waiver. The exclusion of specialty laptops and tablet computers 
modified to meet Federal Government was included in the Notice of 
Intent.
    Therefore, in the absence of a small business manufacturer of 
commercially available off-the-shelf laptops and tablet computers, 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 
https://www.sba.gov/contracting/contracting-officials/non-manufacturer-rule/non-manufacturer-waivers.

David Wm. Loines,
Director, Office of Government Contracting.
[FR Doc. 2020-04681 Filed 3-6-20; 8:45 am]
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