Small Business Size Standards: Waiver of the Nonmanufacturer Rule

AGENCY:

U.S. Small Business Administration.

ACTION:

Notice of waiver of the Nonmanufacturer Rule for certain Petroleum Products.

SUMMARY:

The U.S. Small Business Administration (SBA) is granting a request for a waiver of the Nonmanufacturer Rule for Industrial Gases Manufacturing; Refinery Gases made in Petroleum Refineries; Cyrogenic Tanks, Heavy Gauge Metal Manufacturing; Liquid Oxygen Tanks Manufacturing; Liquefied Petroleum Gases (LPG) Cylinders Manufacturing; Bulk Storage Tanks, Heavy Gauge Metal, Manufacturing; Gas Storage Tanks, Heavy Gauge Metal, Manufacturing; and Cylinders, Pressure, Heavy Gauge Metal, Manufacturing.

The effect of a waiver would be to allow otherwise qualified regular dealers to supply the products of any domestic manufacturer on a Federal contract set aside for small businesses; service-disabled veteran-owned small businesses or SBA's 8(a) Business Development Program.

DATES:

This waiver is effective May 12, 2006.

FOR FURTHER INFORMATION CONTACT:

Edith Butler, Program Analyst, by telephone at (202) 619-0422; by FAX at (202) 481-1788; or by e-mail at edith.butler@sba.gov.

SUPPLEMENTARY INFORMATION:

Section 8(a)(17) of the Small Business Act (Act), 15 U.S.C. 637(a)(17), requires that recipients of Federal contracts set aside for small businesses, service-disabled veteran-owned small businesses, or SBA's 8(a) Business Development 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. The SBA regulations imposing this requirement are found at 13 CFR 121.406(b). 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.

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 received a contract from the Federal government within the last 24 months. The SBA defines “class of products” based on a six digit coding system. The coding system is the Office of Management and Budget North American Industry Classification System (NAICS).

The SBA received a request on January 10, 2006 to waive the Nonmanufacturer Rule for Industrial Gases Manufacturing; Refinery Gases made in Petroleum Refineries; Cyrogenic Tanks, Heavy Gauge Metal Manufacturing; Liquid Oxygen Tanks Manufacturing; Liquefied Petroleum Gases (LPG) Cylinders Manufacturing; Bulk Storage Tanks, Heavy Gauge Metal, Manufacturing; Gas Storage Tanks, Heavy Gauge Metal, Manufacturing; and Cylinders, Pressure, Heavy Gauge Metal, Manufacturing.

In response, on February 24, 2006 SBA published in the Federal Register a notice of intent to waive the Nonmanufacturer Rule for Industrial Gases Manufacturing; Refinery Gases made in Petroleum Refineries; Cyrogenic Tanks, Heavy Gauge Metal Manufacturing; Liquid Oxygen Tanks Manufacturing; Liquefied Petroleum Gases (LPG) Cylinders Manufacturing; Bulk Storage Tanks, Heavy Gauge Metal, Manufacturing; Gas Storage Tanks, Heavy Gauge Metal, Manufacturing; and Cylinders, Pressure, Heavy Gauge Metal, Manufacturing. SBA explained in the notice that it was soliciting comments and sources of small business manufacturers of these classes of products. In response to this notice, comments were received from interested parties. 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 Industrial Gases Manufacturing; Refinery Gases made in Petroleum Refineries; Cyrogenic Tanks, Heavy Gauge Metal Manufacturing; Liquid Oxygen Tanks Manufacturing; Liquefied Petroleum Gases (LPG) Cylinders Manufacturing; Bulk Storage Tanks, Heavy Gauge Metal, Manufacturing; Gas Storage Tanks, Heavy Gauge Metal, Manufacturing; and Cylinders, Pressure, Heavy Gauge Metal, Manufacturing, (NAICS) codes 325120, 324110 and 332420.

Authority: 15 U.S.C. 637(a)(17).