[Federal Register Volume 79, Number 70 (Friday, April 11, 2014)]
[Notices]
[Pages 20294-20295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-08088]
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SMALL BUSINESS ADMINISTRATION
Small Business Size Standards: Waiver of the Nonmanufacturer Rule
AGENCY: U.S. Small Business Administration.
ACTION: Notice of rescission of four class waivers of the
Nonmanufacturer Rule under North American Industry Classification
System (NAICS) code 335999 and granting of three new class waivers
under NAICS codes 335122, 335110, and 335311.
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SUMMARY: The U.S. Small Business Administration (SBA) is rescinding
four class waivers of the Nonmanufacturer Rule which were classified
under NAICS code 335999 (All Other Miscellaneous Electrical Equipment
and Component Manufacturing) and which were further classified under
Product Service Codes (PSCs) 5999, 6210, 6240, and 6250. The class
waiver applicable to PSC 5999 (Miscellaneous Electrical and Electronic
Components) is being rescinded because it has been determined that
several small business manufacturers of miscellaneous electrical
equipment are currently available to participate in the Federal
marketplace. The class waivers applicable to PSCs 6210, 6240, and 6250
are being rescinded because it has been determined that they were each
improperly classified under NAICS code 335999. In order to correct this
error, SBA is granting three new class waivers under the correct NAICS
codes. Specifically, SBA is granting class waivers for the following:
(1) NAICS code 335122 (Commercial, Industrial, and Institutional
Electric Lighting Fixture Manufacturing), PSC 6210 (Indoor and Outdoor
Electrical Lighting Fixtures); (2) NAICS code 335110 (Electric Lamp
Bulb and Part Manufacturing), PSC 6240 (Electric Lamps); and (3) NAICS
Code 335311 (Power, Distribution, and Specialty Transformer
Manufacturing), PSC 6250 (Ballasts, Lampholders, and Starters). SBA is
taking these actions in response to public comments and SBA's
independent analysis. The effect of the rescission of the four class
waivers will be to require recipients of Federal supply contracts
assigned NAICS code 335999 that are set aside for small businesses,
service-disabled veteran-owned small businesses, women-owned small
businesses, or Participants in the SBA's 8(a) Business Development (BD)
program to provide the products of a domestic small business
manufacturer or processor, unless an individual waiver of the
Nonmanufacturer Rule is granted by SBA. The effect of the three new
class waivers will be to allow otherwise qualified small business
regular dealers to supply products of a domestic manufacturer on a
Federal contract set aside for small businesses, service-disabled
veteran-owned small businesses, women-owned small businesses, or
Participants in the SBA's 8(a) BD program, where the class of products
being procured is classified under PSC 6210, 6240, or 6250.
DATES: This action is effective the date of publication in the Federal
Register.
FOR FURTHER INFORMATION CONTACT: Edward Halstead, (202) 205-9885,
[email protected].
SUPPLEMENTARY INFORMATION: Sections 8(a)(17) and 46 of the Small
Business Act (Act) and SBA's implementing regulations generally require
that recipients of Federal supply contracts that are set aside for
small businesses, service-disabled veteran-owned small businesses,
women-owned 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. 15 U.S.C. 637(a)(17), 657s; 13 CFR
121.406(b). This requirement is commonly referred to as the
Nonmanufacturer Rule. 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. SBA defines ``class of products'' as an
individual subdivision within a NAICS code as established by the Office
of Management and Budget in the NAICS Manual. 13 CFR 121.1202(d). In
addition, SBA uses Product Service Codes (PSCs) to further identify
particular products within the NAICS code to which a waiver would
apply.
[[Page 20295]]
SBA may then identify a specific item within a PSC and NAICS code to
which a class waiver would apply. ``Available to participate'' in the
context of the Federal market means that contractors exist that have
been awarded or have performed a contract to supply a specific class of
products to the Federal Government within 24 months from the date of
the request for waiver, either directly or through a dealer, or that
have submitted an offer on a solicitation for that class of products
within that time frame. 13 CFR 121.1202(c).
On November 2, 2004, SBA granted a class waiver of the
Nonmanufacturer Rule for Miscellaneous Electrical Equipment and
Component Manufacturing, classified under NAICS code 335999 (All Other
Miscellaneous Electrical Equipment and Component Manufacturing), PSC
5999 (Miscellaneous Electrical and Electronic Components). 69 FR 61429.
On January 28, 2008, SBA granted a class waiver for Fluorescent Lamps,
Incandescent Lamps, etc., classified under NAICS code 335999, PSC 6240
(Electric Lamps). 73 FR 4940. The same day, SBA granted a class waiver
for Electric Lamp Starters and Lamp Holders, etc., classified under
NAICS code 335999, PSC 6250 (Ballasts, Lampholders, and Starters). 73
FR 4941. On March 21, 2008, SBA granted a class waiver for Indoor and
Outdoor Electric Lighting Fixtures, classified under NAICS code 335999,
PSC 6210 (Indoor and Outdoor Electrical Lighting Fixtures). 73 FR
15251.
In 2013, SBA received a request from a small business manufacturer
to rescind the class waiver of the Nonmanufacturer Rule for
Miscellaneous Electrical Equipment and Component Manufacturing
(classified under NAICS code 335999, PSC 5999). According to the
request, there was at least one small business manufacturer that had
conducted business with the Federal Government within the previous 24
months and provided at least one of the various supplies listed under
the class waiver applicable to Miscellaneous Electrical Equipment and
Component Manufacturing. SBA's independent research resulted in the
discovery of other small business manufacturers of various items listed
under the descriptors applicable to Miscellaneous Electrical Equipment
and Component Manufacturing.
On July 17, 2013, SBA published a notice in the Federal Register
stating that SBA intended to rescind the class waiver for NAICS code
335999. 78 FR 42817. The public comment period for this notice closed
on August 1, 2013. Soon after it closed, a small business manufacturer
requested that the public comment period be reopened to allow
submission of additional data. SBA reopened the comment period from
August 20, 2013 to September 19, 2013. 78 FR 51263. During the comment
periods, five respondents submitted eight comments.
Two commenters strongly supported rescinding the class waiver for
NAICS code 335999, PSC 5999. These commenters also stated that the
three other previously granted class waivers under NAICS code 335999
were misclassified and recommended that SBA reclassify them under
different NAICS codes. Another respondent, a small business
manufacturer of electrical equipment, fully supported the rescission of
the class waiver for NAICS code 335999, PSC 5999. A fourth commenter
opposed the rescission but insisted that SBA adopt the above revisions
and reclassifications of the class waivers under NAICS code 335999. A
fifth respondent, a small distributor of lighting, electrical and voice
and data products, opposed rescinding the waiver and commented that the
rescission of this waiver would negatively impact his business.
However, the commenter did not provide an explanation or evidence as to
how rescission of this wavier would negatively impact his business.
That same commenter also recommended that the class waivers for PSCs
6210, 6240, and 6250 be reclassified under different NAICS codes. A
small business distributor of electrical supplies supported the
rescission of the class waiver for NAICS code 335999, PSC 5999 on the
grounds that contracting officers are justifying their refusal to set
aside contracts for the procurement of miscellaneous electrical
equipment based on this wavier being in place. Another respondent, a
small business lighting products distributor, supported rescission of
all of the class waivers classified under NAICS code 335999. This
respondent commented that a class waiver should never have been granted
for PSC 5999 and that the waivers for PSCs 6210, 6240, and 6250 are
misclassified under NAICS code 335999, resulting in contracting
officials refusing to set aside these procurements for small business
and instead choosing to procure through unrestricted procedures. One
commenter's request was not relevant to the purpose of this class
waiver and therefore is not addressed here.
Based on the public comments received, SBA's analysis of data
submitted, and independent market research performed by SBA, it has
been determined that several small business manufacturers of
miscellaneous electrical equipment are currently available to
participate in the Federal marketplace. In addition, SBA's research
validated the commenters' assertions regarding the improper NAICS code
classification of the class waivers for PSCs 6210, 6240, and 6250.
Therefore, SBA has decided to take the following actions: (1) Rescind
the class waiver for Miscellaneous Electrical Equipment and Component
Manufacturing, classified under NAICS code 335999, PSC 5999 (see 69 FR
61429); (2) rescind the class waiver for Indoor and Outdoor Electric
Lighting Fixtures, classified under NAICS code 335999, PSC 6210 (see 73
FR 15251), and replace it by granting a class waiver for Indoor and
Outdoor Electrical Lighting Fixtures, under NAICS code 335122
(Commercial, Industrial, and Institutional Electric Lighting Fixture
Manufacturing), PSC 6210 (Indoor and Outdoor Electrical Lighting
Fixtures); (3) rescind the class waiver for Fluorescent Lamps,
Incandescent Lamps, etc., classified under NAICS code 335999, PSC 6240
(see 73 FR 4940) and replace it by granting a class waiver for Electric
Lamps, under NAICS code 335110 (Electric Lamp Bulb and Part
Manufacturing), PSC 6240 (Electric Lamps); and (4) rescind the class
waiver for Electric Lamp Starters and Lamp Holders, etc., classified
under NAICS code 335999, PSC 6250 (see 73 FR 4941) and replace it by
granting a class waiver for Ballasts, Lampholders, and Starters, under
NAICS code 335311 (Power, Distribution, and Specialty Transformer
Manufacturing), PSC 6250 (Ballasts, Lampholders, and Starters).
Dated: March 31, 2014.
Judith A. Roussel,
Director, Office of Government Contracting.
[FR Doc. 2014-08088 Filed 4-10-14; 8:45 am]
BILLING CODE 8025-01-P