Small Business Size Standards; Termination of Waiver of the Nonmanufacturer Rule

SMALL BUSINESS ADMINISTRATION

13 CFR Part 121

Small Business Size Standards; Termination of Waiver of the

Nonmanufacturer Rule

AGENCY: Small Business Administration.

ACTION: Termination of waivers of the Nonmanufacturer Rule for two

classes of metal products and the retention of waivers for five classes

of metal products.

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SUMMARY: The first purpose of this document is to announce that the

Small Business Administration (SBA) is terminating the waiver of the

Nonmanufacturer Rule for: (1) Bars and rods, high nickel alloy,

aluminum, nickel-copper, nickel-copper-aluminum, copper, copper-nickel,

aluminum-bronze, and naval brass; and (2) Structural shapes, angles,

channels, tees and zees, aluminum and high nickel alloy. The decision

to terminate these waivers of the Nonmanufacturer Rule is based on

evidence provided to the SBA that there is a small business which

manufactures items within these classes of products. This small

business is available to provide items within each class to the Federal

government. Terminating these waivers will require recipients of

contracts set aside for small or 8(a) businesses to provide the

products of domestic small business manufacturers or processors where

these classes of products are required.

The second purpose of this document is to announce that SBA is

retaining class waivers for: (1) Bars and rods, high nickel alloy; (2)

plate sheet, strip and foil, stainless steel and high nickel alloy; (3)

wire, nonelectrical, high nickel alloy; (4) plate, sheet and strip,

nickel-copper, nickel-copper-aluminum, copper-nickel, and copper; and

(5) sheet and plate aluminum products. The effect of retaining these

class waivers is that small businesses which receive either small

business set-aside or SBA 8(a) Program contracts for these products

awards may provide the products of any domestic manufacturer or

processor.

EFFECTIVE DATE: July 27, 1994. The terminations effectuated by this

notice apply to all solicitations dated on or after October 25, 1994.

FOR FURTHER INFORMATION CONTACT:

James Parker, Procurement Analyst, phone (202) 205-6465.

SUPPLEMENTARY INFORMATION: Public Law 100-656, enacted on November 15,

1988, incorporated into the Small Business Act the previously existing

requirement that recipients of Federal contracts set aside for small

businesses or the SBA 8(a) Program must provide the products of small

business manufacturers or processors. The SBA regulations imposing this

requirement are found at 13 CFR 121.906(b) and 121.1106(b).

Section 210 of Public Law 101-574 further amended the Small

Business Act to allow for waivers for classes of products for which

there are no small business manufacturers or processors ``available to

participate in the Federal procurement market,'' 15 U.S.C.

637(a)(17)(B)(iv)(II).

Decision to terminate two class waivers:

1. SBA announced its decision to grant a class waiver for bars and

rods, high nickel alloy, aluminum, nickel-copper, nickel-copper-

aluminum, copper, copper-nickel, aluminum-bronze, and naval brass in

the Federal Register on May 15, 1991, 56 FR 22306. Recently, the

Defense Logistics Agency's (DLA) Defense Industrial Supply Center

(DISC) brought to SBA's attention the existence of a small business

manufacturer for items within this class of products. Based on this

information, a notice of the Agency's intent to terminate this waiver

and waivers for six other classes of products was published in the

Federal Register on January 10, 1994, 59 FR 1360. The notice allowed

thirty days for a comment period.

The comments received from the small businesses and DLA were

similar to each other. They agreed that a small business exists which

manufactures items in this class of products. However, they believed

they may not be able to supply all of their potential procurement

requirements with items manufactured by the small business.

According to the SBA's published regulations, 58 FR 48954 (1993),

``(u)pon receipt by the SBA of evidence that a small business

manufacturer or processor exists in the Federal market for a waived

class of products, the waiver shall be terminated by the Associate

Administrator for (Government Contracting).'' Based on this regulation,

the SBA is required to terminate the class waiver for this class of

products.

Therefore, the waiver previously granted for bars and rods, high

nickel alloy, aluminum, nickel-copper, nickel-copper-aluminum, copper,

copper-nickel, aluminum-bronze, and naval brass (Product and Service

Code (PSC) 9530, Standard Industrial Classification Code (SIC) 3356) is

terminated, effective ninety days from the date of this notice. Small

business set-aside or SBA 8(a) Program contracts for this class of

products may rely on this waiver where the solicitation is dated before

the ninetieth day after the date of the Federal Register publication of

this termination.

2. SBA announced its decision to grant the waiver for structural

shapes, angles, channels, tees and zees, aluminum and high nickel alloy

in the Federal Register on May 15, 1991, 56 FR 22306. The DISC brought

to SBA's attention the existence of a small business manufacturer for

items within this class of products. Based on this information, a

notice of the Agency's intent to terminate this waiver was published in

the Federal Register on January 10, 1994, 59 FR 1360. The notice

allowed thirty days for a comment period.

The comments received from the small businesses and DLA were

similar to each other. They agreed that a small business exists which

manufactures items in this class of products. However, they believed

they may not be able to supply all of their potential procurement

requirements with items manufactured by the small business.

According to the SBA's published regulations, 58 FR 48954 (1993),

``(u)pon receipt by the SBA of evidence that a small business

manufacturer or processor exists in the Federal market for a waived

class of products, the waiver shall be terminated by the Associate

Administrator for (Government Contracting).'' Based on this regulation,

the SBA is required to terminate the class waiver for this class of

products.

Therefore, the waiver previously granted for structural shapes,

angles, channels, tees and zees, aluminum and high nickel alloy (PSC

9540, SIC 3354) is terminated, effective ninety days from the date of

this notice. Small business set-aside or SBA 8(a) Program contracts for

this class of products may rely on this waiver where the solicitation

is dated before the ninetieth day after the date of the Federal

Register publication of this termination.

Retention of five class waivers:

The second part of this announcement addresses the decision to

retain waivers for five classes of products which were proposed for

termination in the Federal Register on January 10, 1994, 59 FR 1360.

Those five classes are: (1) Bars and rods, high nickel alloy (PSC 9510,

SIC 3312); (2) Plate, sheet, strip and foil, stainless steel and high

nickel alloy (PSC 9515, SIC 3312); (3) Wire, nonelectrical, high nickel

alloy (PSC 9525, SIC 3356); (4) Plate, sheet and strip, nickel-copper,

nickel-copper-aluminum, copper-nickel, and copper (PSC 9535, SIC 3353);

and (5) Sheet and plate aluminum products (PSC 9535, SIC 3353).

The SBA originally announced its decision to grant class waivers of

the Nonmanufacturer Rule for these five classes of products in the

Federal Register on May 15, 1991, 56 FR 22306. While researching SBA's

Procurement Automated Source System (PASS) on a related issue, SBA

became aware of the possible existence of small business manufacturers

for items within each of these classes of products. After the Federal

Register announcement on January 10, 1994, of an intent to terminate

these classes of products, the SBA received comments from several small

businesses and DLA regarding this matter. All parties urged that SBA

not terminate waivers for these five classes of products on the basis

that doing so would adversely affect both the Federal procurement

process for these items and the existing suppliers for those products.

Also, we learned that the production capabilities of the small business

manufacturers of these products is severely limited in quantity and

product type. Based on these comments, the SBA will retain the class

waivers for these classes of products.

Dated: July 19, 1994.

Thomas A. Dumaresq,

Associate Administrator for Government Contracting.

[FR Doc. 94-18069 Filed 7-26-94; 8:45 am]

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