January 20, 2016
Nonmanufacturer Rule: Post-Proposal Substitutions Don’t Work
Source: Smallgovcon, Steven Koprince, January 5, 2016
The nonmanufacturer rule requires, among other things, that the prime contractor supply the end items of a small business manufacturer, or obtain a SBA waiver of that requirement. Compliance with the nonmanufacturer rule is determined as of the date of the final proposal–and a subsequent switch in manufacturers won’t be recognized by the SBA.
In a recent decision, the SBA Office of Hearings and Appeals held that the SBA had erred by evaluating a prospective prime contractor’s nonmanufacturer rule compliance because the small business end manufacturer in question had not provided a quotation to the prime until well after the prime’s proposal had been submitted.
OHA’s decision in Size Appeal of Sea Box, Inc., SBA No. SIZ-5699 (2015) involved an Army solicitation for twelve QuadCons (a type of metal container). The solicitation was issued as a small business set-aside under NAICS code 332312 (Fabricated Structural Metal Manufacturing). Bids were due on September 11, 2015.
After reviewing bids, the Army announced that Regent World, Inc. was the apparent successful offeror. An unsuccessful competitor, Sea Box Inc., then filed a timely SBA size protest. Sea Box alleged that RWI did not qualify for the contract because it would not manufacture the QuadCons itself and would not comply with the nonmanufacturer rule. Read More …
Noncompliance of the nonmanufacturer rule may invalidate contract. Contact your nearest PTAC for more details.
For help with Government Contracting: contact your nearest Procurement Technical Assistance Center (PTAC). Funded through Cooperative Agreements between the U.S. Department of Defense and state and local governments/institutions, PTACs provide free and low-cost assistance in virtually all areas of government contracting.