Nonmanufacturer Rule Class Waivers: SBA OHA Explains How They Work
Source: SMALLGOVCON, Article written by Steven Koprince, Published June 3, 2015
Under the nonmanufacturer rule, a class waiver applies to a procurement only if the NAICS code, Product Service Code and NAICS code descriptor match the item being procured.
Contrary to a common misconception, a nonmanufacturer rule class waiver is not authorized on the basis of the NAICS code alone. In a recent size appeal decision, the SBA Office of Hearings and Appeals concisely explained how nonmanufacturer rule class waivers work.
OHA’s decision in Size Appeal of All Around Access, LLC, SBA No. SIZ-5656 (2015) involved an Air Force RFQ for utility vehicles. The procurement was set aside for small businesses under NAICS code 336112 (Light Truck and Utility Vehicle Manufacturing) with a corresponding 1,000-employee size standard. The solicitation stated that the acquisition was being conducted under the FAR’s provisions for commercial items. No PSC was assigned to the RFQ.
After evaluating quotes, the Air Force awarded the contract to Dal Kawa Cycle Center, Inc. An unsuccessful competitor, All Around Access, LLC, filed a SBA size protest. All Around Access contended that DKCC would not manufacture the items being procured or comply with the nonmanufacturer rule.
With respect to the nonmanufacturer rule, DKCC alleged that DKCC would not provide the end item of a small business, or obtain a waiver of that requirement. DKCC noted that, although a class waiver was in effect for NAICS code 336112, the class waiver is under PSC 2310. In this case, however, the RFQ had no PSC, and was classified under a “miscellaneous” classification code. DKCC also argued that the product descriptor for the class waiver did not match the procurement’s NAICS descriptor, Light Truck and Utility Vehicle Manufacturing.
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.