Understanding the Nonmanufacturer Rule (NMR) and …€¦ · · 2017-10-07Understanding the...
Transcript of Understanding the Nonmanufacturer Rule (NMR) and …€¦ · · 2017-10-07Understanding the...
Understanding the Nonmanufacturer Rule (NMR) and
the NMR Waiver Process
First Wednesday Virtual Learning Series 2018
www.sba.gov
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Hosts
Jan Kaiser, Procurement Center Representative SBA Office of Government Contracting, Area IV, Chicago [email protected] (312) 353-7442
Deborah Crumity, Procurement Center Representative SBA Office of Government Contracting, Area IV, Rock Island Arsenal [email protected] (309) 782-5734
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Welcome to “SBA Virtual Learning 2018”
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1. Questions answered during the final 10 minutes.
2. Technical problems: Contact the moderator with a note or call AT&T
Connect Support at 1-888-796-6118.
3. Page numbers stated for those working off hard copies of the
program.
4. We cover the “SBA Quick Reference” as time allows.
5. For more SBA training visit the SBA Learning Center website https://www.sba.gov/tools/sba-learning-center/search/training
Procurement Technical Assistance Centers are a vital resource partner.
• APTAC posts past “First Wednesday” programing at this link:
http://www.aptac-us.org/for-contracting-officers-sba-webinar-library/
• Contracting officer resources: “How PTACs partner with federal
agencies”: http://www.aptac-us.org/federal-partners/
• Find your nearest Procurement Technical Assistance Center at
http://www.aptac-us.org
Association of Procurement Technical Assistance Centers (APTAC)
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The program schedule above is for information only and is subject to change.
FY 2018 Date Topic
1 October 4, 2017 Non-Manufacturer Rule
2 November 1, 2017 SBA Native American Programs - AI/ANC/NHO
3 December 6, 2017 SBA Programs You May Not Know About Natural Resources Assistance/Disaster Assistance
4 January 10, 2018 Historically Underutilized Business Zones
5 February 7, 2018 Certificate of Competency Program
6 March 7, 2018 Woman Owned Small Business
7 April 4, 2018 Size and Affiliation
8 May 2, 2018 Subcontracting Plans: Pre-Award
9 June 6, 2018 SDVOSB
10 July 11, 2018 SBA Legislative Update
11 August 1, 2018 Mentor/ Protégé Program
1st WEDNESDAY VIRTUAL LEARNING SERIES 2018 SCHEDULE
1:00 to 2:00 Central Time
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One Continuous Learning Point
Self-service: Using the PowerPoint that was sent with your invitation for this training event, fill in your name on the certificate slide and save. Download the certificate and print for your records. You submit your request for training credit IAW your agency policy, i.e. FAITAS.
Phoning in only: If you listen in groups and you want all attendees to be included on the future mailing list, send email addresses of participants in an excel document to [email protected].
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Understanding the
Nonmanufacturer Rule
(NMR) and the NMR
Waiver Process
Presented by:
Roman Ivey
U.S. Small Business Administration
Office of Government Contracting
Overview
• The Nonmanufacturer Rule (NMR)
• Applicability of the NMR
• Individual Waivers to the NMR
• Class Waivers to the NMR
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NMR Definition
The Nonmanufacturer Rule (NMR) allows an
otherwise responsible business concern to be
awarded a procurement contract for the
supply of a product – even though it is not the
manufacturer or processor of the product – as
long as it meets certain conditions
- Small Business Act section 8(a)(17)
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NMR Conditions
To qualify as a nonmanufacturer under the NMR, a firm:
• Cannot exceed 500 employees;
• Must be primarily engaged in retail or wholesale and
normally sells type of product being supplied;
• Must take ownership or possession of the item(s) in a
manner consistent with industry practice; and
• Must supply the end product of a small business
manufacturer or processor made in U.S. or obtain a
waiver to the NMR
13 CFR 121.406(b)(1)
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Manufacturer Defined
• The manufacturer of an item is the concern which
performs the primary activities in transforming
organic or inorganic substances, including the
assembly of parts and components, into the end
item being acquired
• Firms which only perform minimal operations on the
end item or firms which add substances, parts, or
components to the end item do not qualify as the
manufacturer of the item being acquired
13 C.F.R 121.406(b)(2)
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Kit Assemblers
• A small business that supplies a pre-assembled “kit” of supplies/goods meets the conditions of the NMR if:
• The small business providing the “kit” does not exceed 500 employees; and
• 50% of the total value of the “kit” is manufactured by US small businesses
13 CFR 121.406(c)
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Applicability of the NMR
The NMR applies to
• Small business set-asides
• Against a manufacturing or supply contract
• With a total estimated value greater than
$150,000
13 CFR 121.406(a), (d)
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Set-Aside Requirement
• The NMR does not apply unless and until
there is a small business set-aside
• Thus, the NMR
• Would apply to task orders within a “full and
open” overall contract
• Would not apply to an IDIQ where the intent is to
establish small business set-asides during the
life of the contract
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NMR Applicable NAICS Codes
The NMR only applies to manufacturing/supply
acquisitions with certain assigned NAICS codes:
• 31XXXX-33XXXX
• 511210 (software)
• 541519 footnote 18 (Information Technology
Value Added Reseller – ITVAR)
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Standard for Individual NMR Waivers
• SBA will grant an individual waiver to the NMR
after determining that “no small business
manufacturer or processor can reasonably be
expected to supply the product meeting the
specifications of the solicitation”
• 13 CFR 121.406(b)(5)(i)
• Individual waivers apply only to a single
solicitation (one-time waiver) and the specific
item(s) identified in the waiver request
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Procedure for Requesting an
Individual NMR Waiver
• The contracting officer must email the
request to the SBA Office of
Government Contracting at
• The request should include all the
elements noted on the following slide
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What to Submit – Individual NMR
Waiver Request Checklist
Request signed by the contracting officer
Solicitation number (or other ID)
Estimated total dollar amount of the contract
Assigned NAICS code(s) for the solicitation
Brief statement of the procurement history
For contracts over $500,000 need a Statement of Work (or equivalent)
A definitive statement of the item(s) to be waived and justification for why they are required
A narrative describing market research and supporting documentation
13 CFR 121.1204(b)(1)
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Definitive Statement of Item(s)
• SBA needs the items sought under the
solicitation to be described in terms of their
qualities and attributes
• This could include laymen’s terminology,
technical specifications, or any other identifying
characteristics
• SBA will generally not grant an individual NMR
waiver if the primary justification for the
narrowing of sources is a brand name
requirement
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“Brand Name Only” Procurements
• If the requesting agency has a legitimate
need for a particular brand name item, then
the contracting officer must provide a Limited
Sources Justification (LSJ) or equivalent
document
• The LSJ must include the reasoning for why
the brand name item is essential to the
procurement and it must comply with all
relevant FAR requirements
• FAR 6.302, 6.303, 8.405, etc.
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Market Research Considerations
Market Research is the most important part
of the individual waiver request
• SBA needs to see a narrative and documentation
that provides reasonable certainty that there are no
small business manufacturers that make and could
supply the items sought
• This requires the contracting officer to perform
extensive market research and provide a clear
description of that market research
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Market Research Considerations (cont.)
• Examples of market research tools:
• Sources Sought Notice (or RFI) that includes
language specifically seeking small business
manufacturers
• DSBS/SAM searches for potential small business
manufacturers (with follow up)
• Industry days and roundtable discussions (recent)
• Direct correspondence with small businesses
identified by OSBDU, past procurements, etc.
• General industry knowledge when based on
recent, thorough market research and assertion of
no change in the market*
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Market Research Considerations (cont.)
• In general, the Sources Sought Notice (RFI)
is the most effective market research tool
• It reaches the entire Federal procurement
community via FedBizOpps
• SBA requires that a Sources Sought (RFI):
• Include language specifically seeking small
business manufacturers;
• Define the item(s) in terms of salient
characteristics; and
• Be posted on FedBizOpps for 14 calendar days
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Multi-Item Procurements
• A contracting officer must provide separate
justification and market research for each
item to be covered by an NMR waiver
• However, an NMR waiver is not necessary
for every item manufactured by a large
business in a multi-item procurement
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Multi-Item Procurements (cont.)
There are two paths to compliance with the
NMR for multi-item procurements:
1) At least 50% of the total estimated contract value
manufactured by small business
• 13 CFR 121.406(e)(1), 125.6(a)(2)(ii)(A)
2) Over 50% of the total estimated contract value
manufactured by large business, obtain NMR
waivers so that 50% of the remaining total value
(items not covered by NMR waiver) is manufactured
by small business
• 13 CFR 125.6(a)(2)(ii)(B)
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Multi-Item Procurement Examples
• Example 1 – Total contract value of $1 million. $500k
manufactured by small business.
• Result: Complies with NMR. 50% of total contract value is
manufactured by small business (no waivers needed)
• Example 2 – Total contract value of $1 million. $200k
manufactured by small business. Contracting officer obtains NMR
waivers for $200k of remaining value.
• Result: Does not comply with NMR. Of the $800k not covered
by an NMR waiver, only 25% manufactured by small business
• Example 3 – Total contract value of $1 million. $300k
manufactured by small business. Contracting officer obtains NMR
waivers for $400k of remaining value.
• Result: Complies with NMR. Of the $600k not covered by an
NMR waiver, 50% manufactured by small business
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Standard for Class NMR Waivers
A class waiver is justified when no small
business manufacturers are
• available to participate
• in the federal market
• for a class of products
13 CFR 121.406(b)(5)(ii)
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“Class of Products”
• “Class of products” refers to an individual
subdivision within a NAICS Industry
Number
• For practical purposes, SBA uses a
combination of NAICS code, PSC, and an
item description to identify the “class of
products” for a class waiver to the NMR
• E.g. NAICS 333333, PSC 1234, Doohickeys
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“Available to Participate”
• “Available to participate” means that small
business contractors have performed, been
awarded, or submitted an offer on a federal
government contract/solicitation for the class
of products within last 24 months
• 13 CFR 121.1202(c)
• If just one small business manufacturer has
been awarded/submitted a bid for a
solicitation concerning the item in question
over the previous 2 years, the class waiver
request must be denied
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Procedures for Requesting and
Establishing a Class Waiver
• Any government agency (including the SBA),
business association, or interested party may
request a NMR waiver for a class of products
• The class waiver request must include
• A statement of the class of products to be waived
(NAICS code, PSC, description)
• Detailed information on efforts to identify domestic
small business manufacturers for the class of
products
13 CFR 121.1204(a)(1-3)
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Class Waiver Procedure (cont.)
• SBA will then conduct its own market research
to confirm whether any small business
manufacturers were awarded a contract on the
class of products within the prior 24 months
• If no small business manufacturers are found
initially, SBA will 1) Publish notices in FedBizOpps and the Federal Register
announcing intent to establish class waiver
2) Allow (at least) 15 day public comment period
3) Publish final notice of class waiver in the Federal
Register if no small business manufacturers are
identified after public comment period
13 CFR 121.1204(a)(4)
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Procedures for Reviewing and
Terminating Class Waivers
• A class waiver to the NMR has no time limitation
• SBA will periodically review existing class waivers to
determine if small business manufacturers have
become available in the federal market
• Other interested parties can also request review and
termination of a class waiver to the NMR
• Discovery of just one small business manufacturer
will trigger termination of the class waiver
• Notice in the Federal Register of intent to terminate class
waiver, public comment period, final FR notice
13 CFR § 121.1204(a)(7)
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Existing NMR Class Waivers
• Existing NMR class waivers can be found
at the following link:
• https://www.sba.gov/contracting/contracting-
officials/non-manufacturer-rule/class-waivers
• Make sure to keep track of class waiver
terminations and always check the list for
up-to-date effective class waivers before
issuing a small business set-aside
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How to Submit NMR Waiver
Requests
• Submit NMR waiver requests and attachments to the
NMR program email address at:
• For individual waivers, use the solicitation number (or
equivalent) and agency abbreviation in the subject line
• e.g. SBA SBA123-18-Q-0001 NMR Waiver Request
• For class waivers, use the NAICS code, PSC, and a
description of the product in the subject line
• e.g. NAICS 333333, PSC 1234, Widgets
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Nonmanufacturer Rule (NMR) Program
Roman Ivey
Office of Government Contracting
U.S. Small Business Administration
Washington, D.C.
(202) 401-1420
Questions??
SBA Size Regulations 13 CFR Part 121
HUBZone Regulations 13 CFR 126.616
SBA Certificate of Competency 13 CFR 125.5
Service-Disabled Veteran 13 CFR 125.15(b)
8(a) and SDB Regulations 13 CFR 124.513
Small Disadvantaged Business 13 CFR 124.1002(f)
WOSB Program 13 CFR 127
SBA Prime Contracting 13 CFR 125.2
SBA Subcontracting 13 CFR 125.3
Summary of CFR Regulations
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Types of SBA Contacts and Offices
A. SBA Government Contracting Area Offices
1. SBA Procurement Center Representatives (PCRs)
2. SBA Commercial Market Representatives (CMRs)
B. SBA District Offices
1. Business Opportunity Specialists (BOS)
C. SBA Regional Offices
D. SBA Headquarters
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SBA Government Contracting Areas at hyperlink:
https://www.sba.gov/content/pcr-directory
Six SBA Government Contracting Areas
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1. Size protests (with recertification) FAR 19.302
13 CFR 121.1001
13 CFR 121.1010
2. Locating nearest SBA staffer FAR 19.4
3. Certificate of Competency FAR 19.6
13 CFR 125.5
4. COC Limitations on Subcontracting Compliance
FAR 19.601
13 CFR 125.6(f)
5. Receiving copies subcontracting plans
FAR 19.705-6
A. SBA Quick Reference - SBA Area Offices
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FAR 19.402 Small Business Administration procurement center
representatives. (a)(1) The SBA may assign one or more
procurement center representatives to any contracting activity or
contract administration office to carry out SBA policies and
programs…
(2) If a SBA procurement center representative is not assigned to the
procuring activity or contract administration office, contact the SBA
Office of Government Contracting Area Office…..
(b) Upon their request and subject to applicable acquisition and
security regulations, contracting officers shall give SBA procurement
center representatives….access to all reasonably obtainable
contract….
B. SBA Quick Reference - SBA Procurement Center Representatives(PCRs)
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B. SBA Quick Reference SBA PCRs, cont.
1. SBA PCR coordination records FAR 19..501(b) 13 CFR 125.2 2. Small business set-aside appeals FAR 19.505 13 CFR 125.2(b)(7) 3. HUBZone set-aside appeals FAR 19.1305 FAR 19.1306 13 CFR 126.61 4. SDVOSB set-aside appeal FAR 19.1405 FAR 19.1406 13 CFR 125.22 5. Reporting bundling to SBA (MATOCs) FAR 19.202-1(e)(1) 13 CFR 125.2 6. SBA subcontracting plan reviews-copies FAR 19.705-5(3) 13 CFR 125.2(b)(6)(iii) FAR 19.705-6(c) 13 CFR 125.2(b)(6)(iii)(C) 7. SBA subcontracting program review FAR 19.707(4) 13 CFR 125.2(b)(6)(iii)(C) 8. Small business TFD FAR 49.402-3 (e)(4)) (Termination for default) 9. Surveillance review of agency contracting FAR 19.402(c)(5) 47
Small Business Coordination Forms Sent To SBA PCRs Agency Form Title
1 Commerce CD 570 Small Business Set-aside Review
2 Defense 2579 Small Business Coordination Record
3 Energy 4220.2 Small Business Review Form
4 GSA 2689 Small Business Analysis Record
5 HHS 653 Small Business Review Form
6 Homeland Security 700-22 Small Business Review Form
7 Interior 1886 Acquisition Screening and Review Form
8 Labor DL1-2004 Small Business Procurement Determination
9 NASA NF 1787 Small Business Review Sheet
10 State DS-1910 Small Business Clearance Form
11 Transportation 4250 Small Business Program Review Form
12 USDA AD-1205
Small Business Program – Procurement
Review
13 VA 2268
Procurement Request Review For Small
Business Programs and Contract Bundling 48
19.705-6 Postaward responsibilities of the contracting officer. …:
(a) Notifying the SBA of the award by sending a copy of the award document to
the Area Director, Office of Government Contracting, in the SBA area
office where the contract will be performed.
(c) Giving to the SBA procurement center representative….a copy of—
(1) Any subcontracting plan submitted in response to a sealed bid
solicitation; and
(2) The final negotiated subcontracting plan that was incorporated into a
negotiated contract or contract modification.
(d) Notifying the SBA procurement center representative…. of the opportunity to
review subcontracting plans in connection with contract modifications.
Document that you have provided SBA Area Directors with copies of subcontracting plans
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1. Prime contractor portfolio management 13 CFR 125.3
2. Reviews of subcontracting plan holders 13 CFR 125.3
3. Matchmaking 13 CFR 125.3
4. SBA SUB-Net link at: http://www.sba.gov/content/sub-net
5. SBA Subcontracting Opportunities Directory link at:
http://www.sba.gov/subcontracting-directory
6. “SBLO Handbook” link at: http://www.sba.gov/content/small-
business-liaison-officer-handbook
C. SBA Quick Reference - SBA Commercial Market Representatives (CMRs) link at: https://www.sba.gov/content/cmr-directory
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Link to district offices at: http://www.sba.gov/about-offices-list/3
D. SBA Quick Reference – SBA Regional and District Offices
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To locate SBA 8(a) business development servicing
office, check Dynamic Small Business Search at the link:
http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm and then
local resources at the link http://www.sba.gov/tools/local-
assistance/districtoffices
D. SBA Quick Reference - SBA District Offices, cont.
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1. HUBZone status protests FAR 19.306
13 CFR 126.801
2. NAICS code appeal FAR 19.30 3
13 CFR 121.1103
3. Non-manufacturer rule waivers FAR 19.102(f)(1)-(7)
13 CFR 121.1204
4. SDVOSB status protest FAR 19.307
13 CFR 125.23
5. WOSB Program status protest FAR 19.308/13 CFR 1275.600
E. SBA Quick Reference - SBA Headquarters
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The preferred and most expeditious method for asking questions and submitting waiver requests is by e-mail to [email protected].
NMR Program Office
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Find your PCR at https://www.sba.gov/content/pcr-directory