Non-Manufacturer Rule and Small Business Set Asides

You may know that GSA allows for Small Business Set-Asides under the GSA Schedules program and that Government Procurement Officers are taking advantage and setting aside procurements. It’s a fantastic opportunity to reduce your competition further and help your client agency meet their subcontracting goals, however, one rule to be aware of if you are a dealer or reseller of products through the GSA schedules program is the Non-Manufacturer Rule (NMR) specifically for small business set aside orders valued over $25,000.

Typically for small business set aside contracts valued over $25,000, the small business is required to perform at least 50% of the work or the cost of manufacturing the products. As reseller/dealer, you do not manufacture the products, so you will not be performing 50% of the work and therefore would be ineligible for the set aside contracts. Fortunately, the NMR rule makes allowances for the reseller to supply the products if a waiver is obtained from the SBA.

The SBA can waive the NMR if there are no small business manufacturers available to supply the products needed to the government.

There are two type of NMR waivers

  1. Individual Waivers–  is solicitation specific and the Contracting Officer (CO) requests the waiver. With the waiver the CO will have to present information to the SBA on the products they are trying to procure and why there are no small businesses available to meet their product needs.
  2. Class Waiver– is a waiver for a specific subdivision or class of products within a NAICS or PSC. The NAICS or PSC will have to match the class of product descriptions. Here is the list of the current class waivers.  The process to obtain a waiver generally takes 45-60 days and it is important to note that waivers can only be given before the solicitation has been released.

A couple of additional notes about the NMR:

  • NMR only applies to orders above $25,000 set aside for small businesses. For orders below $25,000 a small business dealer/reseller can supply products from any domestic business
  • Additionally, for order over $25,000 that are not set aside for small businesses this rule does not apply- a small business can supply the product without having to get a waiver.
  • NMW are not granted for HUBZone procurements and non-manufacturer waivers

For more information from the SBA’s website or view GSA’s Interact Article.

If you have any additional information, feel free to reach out to Coley GCS at [email protected] or 210-402-6766.

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