SPMYM2-24-Q-0440 NMR indiv waiver approval.pdf

All SBA programs and services are extended to the public on a nondiscriminatory basis. 1

Office of Government Contracting and Business Development | 409 3rd Street SW | Washington DC 20416

February 7, 2024

Via Email: Shawn.F.Fernandez@dla.mil

Mr. Shawn Fernandez DLA Maritime Puget Sound Bldg. 7000, 7000 Finback Circle Silverdale, WA 98315

RE: NMR Individual Waiver Request

Dear Mr. Fernandez, On January 27, 2024, the Defense Logistics Agency (DLA) Maritime Puget Sound submitted a request to the U.S. Small Business Administration (SBA) for an individual waiver of the Nonmanufacturer Rule (NMR) for the purchase of two 400Hz Motor-Generators in NEMA 3R, weather-resistant enclosures. The generators are manufactured by Kato Engineering, Inc., North Mankato, Minnesota, a large business. Kato no longer manufactures or supplies the all-weather enclosures, but the complete generator and enclosure packages are available from authorized Kato small business resellers. The applicable North American Industry Classification System code for this procurement is 335312, Motor and Generator Manufacturing, and the estimated value of this procurement is $508,024.

The waiver of the NMR on an individual procurement is provided for in section 8(a)(17) of the Small Business Act, 15 U.S.C. § 637(a)(17), and section 121.406(b)(5) of title 13 of the Code of Federal Regulations, 13 C.F.R. § 121.406(b)(5). At a minimum, an individual NMR waiver request must include the specific item to be waived, why the specific item is required, the proposed solicitation number, the NAICS code, the dollar amount of the procurement, a brief statement of the procurement history, and a Statement of Work (for contracts expected to exceed $500,000). 13 C.F.R. § 121.1204(b)(1).

In addition, the contracting officer must provide a determination that no small business manufacturer can reasonably be expected to offer the product(s) required under the solicitation.

This determination must be supported by a narrative of market research and supporting documentation. 13 C.F.R. § 121.1204(b)(1)(iii).

mailto:Shawn.F.Fernandez@dla.mil

All SBA programs and services are extended to the public on a nondiscriminatory basis. 2

According to your submission, DLA Maritime Puget Sound plans to procure 2 KATO motor generators that will have a weather resistant, skid-mounted, outdoor enclosure, mounted control panel and input/output camlocks added. DLA has identified the Kato generator as the only product that will meet its needs. DLA has also located several small businesses that can provide the required generator systems as resellers or distributors.

As the DLA has demonstrated no small business can meet the specifications of the contract as a manufacturer, an individual waiver is appropriate in this instance. This waiver specifically applies to KATO motor generators that will have a weather resistant, skid-mounted, outdoor enclosure, mounted control panel and input/output camlocks added. This individual waiver applies to this one-time award only and does not apply to modifications to the scope of the contract or other procurement actions. Modifications determined by the contracting officer to be within the scope of the contract will require an additional waiver. 13 C.F.R. § 121.1203(b).

This individual waiver is good for the duration of the contract provided that it does not exceed five years. At the end of the fifth year, whether the contract is in the base period or an option period, the agency must submit and receive a new waiver before entering into the contract’s sixth year.

This waiver must be published with the solicitation so that potential offerors are aware of the waiver and the specific product(s) covered. 13 C.F.R. § 121.1206. The effect of this waiver is to allow an otherwise qualified small business to supply the product of an other-than-small manufacturer or processor on this intended small business set-aside contract. However, it must be emphasized that this waiver of the NMR does not waive other legal requirements applicable to Government procurements, such as the Buy American Act and the Trade Agreements Act.

This individual waiver must be used within one year of issuance. If that time period expires, the agency may request a waiver extension by contacting nmrwaivers@sba.gov. Please inform SBA of the date you enter a contract using the waiver, the contract number, the actual dollar value of the contract, the awardee and their size status. Should you have any questions or require any additional information, please contact Randall Miller at (907) 229-6939 or Randall.miller@sba.gov.

Sincerely, For Francine Morris Director Office of Government Contracting

Cc: Tricia Wintersteen mailto:nmrwaivers@sba.gov