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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: June 16, 2004

SUBJECT: Small Business Administration; Termination of Nonmanufacturer Rule Waiver for General Aviation Turboprop Aircraft

SOURCE: Federal Register, June 16, 2004, Vol. 69, No. 115, page 33690

AGENCIES: Small Business Administration (SBA)

ACTION: Notice of Intent to Terminate Nonmanufacturer Rule Waiver

SUMMARY: The SBA intends to terminate its waiver of the nonmanufacturer rule for general aviation turboprop aircraft manufacturing under North American Industry Classification System (NAICS) code 441229 because of its recent discovery of a small business manufacturer for these classes of products. Terminating this waiver would require recipients of contracts set aside for small or 8(a) businesses to provide the products of small business manufacturers or processor on such contracts.

EDITOR'S NOTE: For more on the waiver of the nonmanufacturer rule for general aviation turboprop aircraft manufacturing, see the March 15, 2004, FEDERAL CONTRACTS DISPATCH "Small Business Administration; Waiver of the Nonmanufacturer Rule for General Aviation Turboprop Aircraft."

The SBA regulation on the nonmanufacturer rule is in Title 13 of the Code of Federal Regulations (CFR), Business and Credit Administration, Part 121, Small Business Size Standards, under paragraph (b) of 121.406, How Does a Small Business Concern Qualify to Provide Manufactured Products Under Small Business Set-Aside or MED [Minority Enterprise Development] Procurements? The SBA regulation on the waiver of the nonmanufacturer rule is 13 CFR 121.1202, When Will a Waiver of the Nonmanufacturer Rule Be Granted for a Class of Products?

A complete list of products for which the nonmanufacturer rule has been waived is available at http://www.sba.gov/GC/approved.html.

DATES: Comments and sources must be submitted on or before July 2, 2004.

FOR FURTHER INFORMATION CONTACT: Edith Butler, Program Analyst, 202-619-0422; fax: 202-205-7280; or e-mail: edith.butler@sba.gov.

SUPPLEMENTAL INFORMATION: Public Law 100-656, enacted November 15, 1988, requires recipients of federal contracts that are set-aside for small businesses or are awarded through the SBA's 8(a) program for disadvantaged small businesses to provide the product of a small business manufacturer or processor if the recipient is not the actual manufacturer or processor. This is called the "nonmanufacturer rule" (see paragraph (f) of Federal Acquisition Regulation (FAR) 19.102, Size Standards). However, the law permits SBA to waive this requirement for any "class of products" if there are no small business manufacturers or processors in the federal market. SBA considers a small business manufacturer or processor to be in the federal market if it submitted a proposal or received a contract from the federal government within the last 24 months.

SBA published a notice in the Federal Register on March 15, 2004, that it was granting a nonmanufacturing rule waiver for general aviation turboprop aircraft manufacturing under North American Industry Classification System (NAICS) code 441229. SBA granted the waiver because it was unaware of any small business sources for these items and it received no comments when it published its intent to grant such a waiver.

However, SBA recently discovered that it had incorrectly classified the class of products NAICS 441229 -- the correct NAICS code is NAICS 336411, Aircraft Manufacturing. Therefore, SBA proposes to terminate the nonmanufacturer rule waiver for NAICS 441229, and invites the public to comment on its proposal to terminate the waiver.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2004 by Panoptic Enterprises. All Rights Reserved.

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