What Is the Nonmanufacturer Rule?
The nonmanufacturer rule lets a small reseller bid on a set-aside for manufactured goods if it supplies the product of a U.S. small business manufacturer.
Nonmanufacturer rule in plain English
It applies to small business set-asides for supplies. To qualify, a reseller must have no more than 500 employees (150 for IT value-added resellers), be primarily in retail or wholesale trade for that kind of item, take ownership or possession of the item in a way that fits industry practice, and supply a U.S.-made item from a small business manufacturer.
SBA can waive the small manufacturer requirement for one contract or a whole class of products when no small manufacturer is available. A waiver doesn't excuse the Buy American Act or the Trade Agreements Act.
The rule doesn't apply to contracts with service or construction NAICS codes. If you resell products, check it before you bid.
Related terms
- Limitations on subcontracting: The limitations on subcontracting rule caps how much of a set-aside contract a small business can pay other firms to perform. On services, the cap is 50%.
- Set-aside: A set-aside is a contract reserved for small businesses, or for one type of small business such as HUBZone or women-owned firms. Others can't bid.
- Small business size standard: A size standard is SBA's cutoff for counting as a small business in an industry. SBA sets one per NAICS code, in average annual receipts or employees.
- NAICS code: A NAICS code is a six-digit industry code, such as 561720 for janitorial services. Each solicitation generally carries one, and it sets the size standard.
Put it to work
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