27924 Federal Register / Vol. 60, No. 102 / Friday, May 26, 1995 / Proposed Rules

9A list of Animal Import Centers and APHIS

offices that accept credit cards may be obtained

from the Animal and Plant Health Inspection

Service, Veterinary Services, National Center for

Import and Export, 4700 River Road Unit 38,

Riverdale, MD 20737–1231.

(6) Approving or inspecting an

embryo or semen collection center or

the animals in it; and

(7) Other export or embarkation

services not specified elsewhere in this

part.

* * * * *

(c) If a service must be conducted on

a Sunday or holiday or at any other time

outside the normal tour of duty of the

employee, then the premium user fee

rate, in lieu of the user fee listed in

paragraph (b) of this section, must be

paid for each employee required to

perform each service:

(1) $65.00 per hour for weekdays and

holidays; and

(2) $74.00 per hour for Sundays.

19. Section 130.50 would be amended

as follows:

a. In paragraph (b)(1), by

redesignating footnote 8 as footnote 9

and revising it to read as set forth below.

b. In paragraph (b)(2), at the end of the

sentence, by adding ‘‘drawn on a U.S.

bank in U.S. dollars and made payable

to the U.S. Department of Agriculture or

USDA’’.

c. In paragraph (b)(3), immediately

before the word ‘‘or’’, by adding ‘‘drawn

on a U.S. bank in U.S. dollars and made

payable to the U.S. Department of

Agriculture or USDA’’.

d. By revising paragraph (b)(4) to read

as set forth below. § 130.50 Payment of

user fees.

* * * * *

(b) * * *

(4) Credit cards (VISA [Insert

trademark symbol] or MasterCard [Insert

trademark symbol]) if payment is made

at an Animal Import Center or an APHIS

office that is equipped to process credit

cards.9

* * * * *

Done in Washington, DC, this 22nd day of

May 1995.

Terry L. Medley,

Acting Administrator, Animal and Plant

Health Inspection Service.

[FR Doc. 95–12999 Filed 5–25–95; 8:45 am]

BILLING CODE 3410–34–P

SMALL BUSINESS ADMINISTRATION

13 CFR Part 121

Small Business Size Regulations; NonManufacturer Rule

AGENCY: Small Business Administration.

ACTION: Proposed rule.

SUMMARY: The Small Business

Administration (SBA) proposes to

amend its size regulations to require

that small business non-manufacturers

provide the product of a small business

manufacturer on small business setaside contracts or section 8(a) contracts,

regardless of the dollar value of the

contract. Under certain conditions, a

waiver of this requirement may be

granted by the SBA.

DATES: Comments must be submitted on

or before July 25, 1995.

ADDRESSES: Send comments to: Gene

VanArsdale, Acting Assistant

Administrator for Procurement Policy

and Liaison, U.S. Small Business

Administration, 409 Third Street, SW,

Mail Code 6252, Washington, DC 20416.

FOR FURTHER INFORMATION CONTACT:

Gary M. Jackson, Assistant

Administrator for Size Standards, (202)

205–6618.

SUPPLEMENTARY INFORMATION: In order to

qualify as small for purposes of a small

business set aside or section 8(a)

procurement of manufactured or

processed products, the Small Business

Act (15 U.S.C. 637(a)(17)) and SBA’s

implementing size regulations (13 CFR

121.906 and 121.1106) require nonmanufacturers to provide the product of

a domestic small business manufacturer.

An offeror which is not the

manufacturer (1) must itself be a small

business concern, and (2) must also

supply a product manufactured by a

domestic small business concern. This

requirement is commonly referred to as

SBA’s ‘‘non-manufacturer rule.’’

Compliance with the non-manufacturer

rule has been a long-standing regulatory

requirement for the small business setaside and 8(a) programs, and a part of

the Small Business Act since 1988.

Pursuant to the Act, the nonmanufacturer rule may be waived by the

SBA if SBA determines that no small

business manufacturer can reasonably

be expected to offer a project meeting

the specifications required by the

solicitation, or if SBA determines that

no small business manufacturer is

available to participate in the Federal

market. Under the SBA’s existing size

regulations, the non-manufacturer rule

has not been extended to supply

contracts processed under ‘‘Small

Purchase Procedures.’’

Recent legislation, however, has

rescinded the Small Purchase

Procedures. Thus, the exemption to the

non-manufacturer rule for procurements

processed under those procedures no

longer exists. This action was part of the

Federal Acquisition Streamlining Act of

1994 (FASA) that was signed into law

on October 13, 1994. Among its many

changes, FASA requires that simplified

acquisition procedures be developed for

contracts between $2,500 and $100,000,

and that all contracts between $2,500

and $100,000 be reserved exclusively

for small concerns unless the

contracting officer is unable to obtain

offers from at least two small business

concerns that are competitive in price

and quality.

The SBA is proposing to apply the

nonmanufacturer rule to supply

contracts that are reserved for small

business (i.e., set aside for small

business or reserved for the 8(a)

program) regardless of the dollar value

of the contract. This policy, adopted,

would consistently apply the nonmanufacturer rule to small business setaside and 8(a) contracts for supplies

issued under all procurement methods,

including those processed under the

new Simplified Acquisition Procedures.

The SBA believes that this rule would

further the overall purpose of the FASA,

which is to simplify Federal

procurement procedures. Applying

different rules according to dollar value

of contracts would further complicate

the procurement process. The impact of

this proposed rule would effectively be

limited to those procurements ranging

in value between $2,500 and $25,000

that were previously exempt from the

non-manufacturer rule as procurements

processed under Small Purchases

Procedures. (Note: Procurements of

$2,500 and below will be processed

under new micro-purchase procedures

and will not be reserved for small

business competition. Thus, the

proposed rule would not apply.)

The SBA does not believe an

exception to the non-manufacturer rule

based on the dollar value of contract is

needed. Public Law 100–656 amended

the Small Business Act by statutorily

requiring the non-manufacturer rule. As

indicated above, the legislation also

included a provision granting SBA the

authority to waive the nonmanufacturer

rule when (1) there is no small business

manufacturer for that particular class of

products in the federal market (class

waiver); or when (2) there is no small

business manufacturer which can meet

the specifications of a particular

contract (individual waiver). The waiver

provision addresses those situations

where the application of the

nonmanufacturer rule is inappropriate

due to the absence of small business

manufacturers in the Federal market. By

way of illustration, examples of waivers

to the non-manufacturer rule are

described by the two following cases.

1. Example of class waiver. There are

no small business manufacturers of

four-wheel drive utility trucks.
Federal Register / Vol. 60, No. 102 / Friday, May 26, 1995 / Proposed Rules 27925

Therefore, the SBA has issued a waiver

to the nonmanufacturer rule for this

class of product. Because there is no

small business manufacturer in the

Federal market, a small business offeror

may provide a product of a large

business manufacturer of four-wheel

drive trucks on contracts set aside for

small businesses.

2. Example of an individual waiver.

There are occasional instances when the

government requires a brand-name

product. For example, a government

office may need to purchase computers

which are compatible with computers

already used in that office. If there is no

compatible unit manufactured by a

small business concern in the Federal

market, the SBA may grant an

individual waiver at the request of the

contracting officer so that a small

business offeror may provide a product

manufactured by a large business for

that particular procurement even though

set aside for small businesses.

The SBA believes that the

implementation of the nonmanufacturer rule contained in this

proposed rule is the application which

will best assist small business, minimize

complexity for procurement, and most

clearly comply with the congressional

purposes of the Small Business Act.

This proposed rule would ensure that,

on procurements reserved for small

business, a substantial value of the

contract is performed by a small

business. Absent the non-manufacturer

rule, a small business non-manufacturer

can obtain a small business contract

and, in turn, provide a product

produced by a large business

manufacturer. In that case, the benefits

to small business of such an award are

limited to the mark-up of the small

business non-manufacturer or dealer.

On the other hand, when a small

business provides the product, directly

or through a dealer, most of the value

of the contract is realized by a small

business. This fosters increased

employment and growth for small

business manufacturers in the economy.

The SBA notes that the Federal

government’s implementation of

electronic commerce will make it easier

for small business manufacturers to

enter into the government procurement

arena. Through electronic commerce,

they will be able to identify Federal

contracting opportunities and become

potential sources for Federal agencies

and small business dealers. Requiring

small business products on all set-aside

and 8(a) contracts will help such

manufacturers do a larger amount of

business in the federal procurement

arena.

Alternative Approaches

The SBA considered two alternatives

with regard to application of the nonmanufacturer rule to small business setaside or 8(a) contracts that will be

processed under the Simplified

Acquisition Procedures:

(1) A rule that would not apply the

non-manufacturer rule to small business

set-aside and 8(a) contracts of $100,000

or less, and

(2) A rule that would not apply the

non-manufacturer rule to small business

set-aside and 8(a) contracts of $25,000

or less.

Each of these approaches has

advantages and disadvantages which are

discussed below.

The first alternative, which would not

apply the non-manufacturer rule to

supply contracts on ‘‘Simplified

Acquisition Procedures’’ until the

simplified acquisition threshold of

$100,000, would expand the number of

contracts in which a small business

non-manufacturer or dealer could

supply the product of any domestic

manufacturer large or small. Existing

rules exempt from the non-manufacturer

rule only those contracts which are

$25,000 or less in value, and which are

processed under ‘‘Small Purchases

Procedures.’’ Under the first alternative,

small business set-aside and 8(a)

contracts of between $25,000 and

$100,000, would no longer be subject to

the nonmanufacturer rule.

This approach would appear to be

consistent with a major purpose of the

FASA, which is to simplify the formal

procurement process. It would simplify

procurement procedures on relatively

low dollar value contracts and would

facilitate the evaluation and award of

these contracts (since the small business

status of a subcontractor to a small

offeror would no longer be relevant).

The SBA is concerned, however, that

this alternative might have an adverse

impact on small business

manufacturers. Without the nonmanufacturer rule, large manufacturers

could simply supply their products to

the government indirectly (through

small business offerors that won the

contract). Small manufacturers would

then, in effect, be competing with large

manufacturers on a large number of

contracts ostensibly reserved for small

business. Based on contract award data

between fiscal years 1989 and 1993, the

SBA estimates that over $500 million

has been awarded annually to small

manufacturers on small business setaside and 8(a), contracts ranging in size

between $25,000 and $100,000. A

failure to apply the non-manufacturer

rule to these contracts would cause a

shift in contract revenues from small

manufacturers to large manufacturers

that is likely to be well into the multimillion dollar range. As a consequence,

SBA elected not to propose this

approach.

The second alternative is to not apply

the non-manufacturer rule to small

business set-aside and 8(a) contracts of

$25,000 or less—the level of the former

Small Business Purchase threshold.

However, under this approach, all other

small business set-aside and 8(a)

contracts, including those processed

under the new Simplified Acquisition

Procedures, would be subject to the

non-manufacturer rule (unless an

administrative waiver were issued for

the class of product or for specific

procurement). This alternative would,

in effect, maintain the current

application of the non-manufacturer

rule to small business set-aside

procurements notwithstanding

enactment of FASA.

Under this approach, small business

manufacturers would not be subject to

new competition from large business (as

could occur under the first alternative

approach) and small business offerors

would continue to have contract

opportunities below $25,000 exempt

from the rule so they could supply the

product of a large manufacturer. In

addition, a new procurement

requirement would not be added to

smaller-sized procurements of up to

$100,000 at a time when the Federal

government is attempting to streamline

all procurement procedures.

The disadvantage of this approach is

that it would add unnecessary

complexity to the new Simplified

Acquisition Procedures. A contracting

officer would have different

requirements to follow depending upon

whether the value of a contract

exceeded $25,000 or not. This would

undercut the overall purpose of FASA,

which is to simplify the procurement

process.

The SBA believes a uniform approach

with regard to the application of the

non-manufacturer rule to small business

set-aside contracts is more in-line with

the spirit of the procurement reform

legislation. In this regard, it believes the

proposed rule provides the best level of

assistance to small businesses,

especially for small business

manufacturers.

The SBA welcomes public comments

on the proposed rule, and will continue

its evaluation of all of the alternative

approaches to application of the nonmanufacturer rule. Comments on any

alternative to the proposal, including

those discussed above, should present

the reasons why it is preferable to the
27926 Federal Register / Vol. 60, No. 102 / Friday, May 26, 1995 / Proposed Rules

proposal, and should address the

following concerns: (1) The interaction

between SBA programs and the

procurement process, including the

various statutory authorities impacting

this process; (2) the effect on small

business participation; and (3) the

prospects for significant new entrants

into the Federal procurement market.

Compliance With Executive Orders

12866, 12778 and 12612, the Regulatory

Flexibility Act (5 U.S.C. 601, et seq.),

and the Paperwork Reduction Act (44

U.S.C. Chap. 35)

The SBA believes that this proposed

rule, if finalized, would have a

significant impact on a substantial

number of small entities within the

meaning of the Regulatory Flexibility

Act, 5 U.S.C. 601, et seq. In addition,

this rule constitutes a significant rule for

the purpose of Executive Order 12866.

A regulatory flexibility analysis follows:

(1) Description of Entities to Which This

Rule Applies

With eleven million small purchase

contract actions during FY 1993, the

SBA estimates that tens of thousands of

small manufacturers active in Federal

contracting potentially could be

impacted by this rule. In addition,

thousands of non-manufacturers or

dealers providing manufactured

products under small purchase

procedures could be impacted by this

rule since their product mix and small

business status could be affected.

(2) Description of Potential Benefits of

This Rule

A decision to apply the nonmanufacturer rule to supply contracts in

the $2,500 to $25,000 range of contract

size would have an estimated impact on

small business participation in excess of

$100 million. During FY 1993, $7.9

billion was awarded to small business

concerns under small purchase

procedures. Although available data

would not permit the SBA to determine

the extent to which Federal agencies

utilize small business nonmanufacturers to satisfy contracts

awarded as small purchases, or to

identify which contracts are in the

$2,500 to $25,000 range affected by this

rule, the magnitude of the $7.9 billion

figure suggests that a decision to apply

the non-manufacturer rule waiver to

small business procurements in this

dollar range would likely have an

annual small business impact exceeding

$100 million.

(3) Description of the Potential Costs of

This Rule

The SBA believes the procurement

costs to the Federal government would

be minimal. All set-aside and 8(a)

contracts are expected to be awarded at

no more than fair-market value. If

reasonable pricing does not exist, the

procuring agency should issue an

unrestricted solicitation. There should

be no significant increased costs to the

government.

(4) Description of the Potential Net

Benefits of the Rule

If the proposed rule is adopted, the

SBA estimates that tens of thousands of

small manufacturers would provide the

products that formerly have been

provided by large manufacturers. At a

minimal cost to the government, small

business participation in the Federal

market would likely be increased. The

direct impact would be entirely

concentrated in the area of Federal

procurement.

(5) Legal Basis for This Rule

The legal basis for this rule is sections

3(a), 5(a), 8(a), and 15(a) of the Small

Business Act, 15 U.S.C. 632(a),

634(b)(6), 637(a) and 644(a).

(6) Federal Rules

There are no Federal rules which

duplicate, overlap or conflict with this

proposed rule. The SBA has been given

exclusive statutory jurisdiction in

establishing size standards.

(7) Significant Alternatives to This Rule

In compliance with the Regulatory

Flexibility Act, the SBA has examined

alternatives to the proposed application

of the non-manufacturer rule. These are

discussed in the supplementary

information. The public is invited to

comment on the proposed rule and

alternative approaches to assist the SBA

in developing a final rule.

For purpose of the Paperwork

Reduction Act, 44 U.S.C. Ch. 35, SBA

certifies that this rule contains no new

reporting or recordkeeping

requirements.

For purposes of Executive Order

12612, SBA certifies that this rule does

not have any federalism implications

warranting the preparation of a

Federalism Assessment.

For the reasons set forth above, Title

13, Code of Federal Regulations (CFR),

is amended as set forth below.

PART 121—[AMENDED]

1. The authority citation for 13 CFR

Part 121 continues to read as follows:

Authority: 15 U.S.C. 632(a), 634(b)(6),

637(a), 644(c); and Pub. L. 102–486, 106 Stat.

2776, 3133.

§ 121.906 [Amended]

2. Section 121.906(d) is removed.

Dated: April 19, 1995.

Philip Lader,

Administrator.

[FR Doc. 95–12646 Filed 5–25–95; 8:45 am]

BILLING CODE 8025–01-M

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 95–SW–06–AD]

Airworthiness Directives; Robinson

Helicopter Company Model R22 Series

Helicopters

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: This document proposes the

supersedure of an existing airworthiness

directive (AD), applicable to Robinson

Helicopter Company Model R22 series

helicopters, that currently requires an

inspection and repetitive visual checks

for slippage of the tail rotor (T/R) drive

and replacement of the T/R gearbox, if

necessary. This action would require

disassembly of the T/R gearbox to verify

the installation of the input and output

shaft keys (keys) between the input and

output pinions and their respective

shafts. This proposal is prompted by

two incidents in which the key was not

installed between the output shaft and

the output pinion during assembly of

the T/R gearbox at Robinson Helicopter

Company. The actions specified by the

proposed AD are intended to prevent

slippage of the T/R drive, loss of

directional control, and subsequent loss

of control of the helicopter.

DATES: Comments must be received by

July 25, 1995.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), Office of the

Assistant Chief Counsel, Attention:

Rules Docket No. 95–SW–06–AD, 2601

Meacham Blvd., Room 663, Fort Worth,

Texas 76137. Comments may be

inspected at this location between 9:00

a.m. and 3:00 p.m., Monday through

Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Ms.

Elizabeth Bumann, Aerospace Engineer,

FAA, Los Angeles Aircraft Certification

Office, 3960 Paramount Blvd.,