SBA Final Rule Brings Significant Changes For HUBZone Contract Purchases:
Final Rule effective June 30, 2016 eliminates the requirement that the
manufacturer also be a SBA HUBZone Certified company. Now these same SBA
Certified HUBZone companies may supply offers on goods via contract
purchase at or below $25,000 in total value. The new rule also allows
the supply any manufacturers goods, as long as the product acquired is
manufacturer or produced in the United States.
The Non-Manufacturer rule allows a small business to offer a product
that it did not manufacture under a small business set-aside if SBA has
offered a waiver. The NMR is an exception to the standard requirement
that the contractor must perform at least 50 percent of the cost of
manufacturing products (not including the cost of material) on a supply
contract. In other words, it allows a contractor that is not the
manufacturer to supply products that come from a small business
manufacturer located in the United States.
· The NMR applies to
firms that receive contracts above $25,000 under the 8(a) program or on a
small business set-aside (including set-aside orders against GSA
Schedule contracts). It is also important to note that if the value of
the order is below $25,000, a small non-manufacturer (including a
HubZone) can supply the product of any domestic business. The SBA
amended its regulations through a Final Rule published on October 2,
2013, implementing the Small Business Jobs Act of 2010. This rule
changed 13 CFR §121.406(d) to include orders placed against multiple award
contracts. FAR Case 2014-002, entitled: Set-Asides Under Multiple Award
Contracts, will implement these changes into the FAR.
· The NMR
only applies under a set-aside order. If the ordering activity does not
restrict the order to small business (or any of the sub-categories) the
NMR does not apply even when an award is made to a small business.
However, the ordering activity will receive small business credit when
awarding to a small business, just as they would for a small business
A small business non-manufacturer is an
organization with less than 500 employees; primarily engaged in the
supply of products and goods as a retail, wholesale or distribution.
Will supply the end product of a U.S. manufacturer or processor, unless a
waiver to the non-manufacturer is in place.
See Final Rule for all details.