Yes. A small business that resells products can bid on a set-aside supply contract and win it, provided it meets the nonmanufacturer rule where the rule applies. That means it has no more than 500 employees, is primarily engaged in retail or wholesale trade and normally sells the item, takes ownership or possession of it consistent with industry practice, and offers the product of a US small business manufacturer unless a waiver applies. It must also hold the status the set-aside requires, such as SDVOSB or WOSB.
Where Reseller Bids Fail
Many small supply companies are resellers that hold little or no stock and source each line from manufacturers or distributors. Whether they can compete for set-asides is usually not in doubt. Bids are more often lost on a narrower question, which is whether the specific product they priced is one they are allowed to offer.
How It Works
Work through three checks on each solicitation.
| Check | Where to look | What it decides |
|---|---|---|
| Is the rule in the solicitation? | Look for FAR 52.219-33 among the clauses | Whether the product condition applies to your offer |
| Is there an exception or waiver? | 13 CFR 121.406(c) exempts small business set-asides between $15,000 and $350,000; the solicitation may state a waiver; the SBA keeps class waivers | Whether a large manufacturer's product can be offered |
| Is each product eligible? | The supplier quote: manufacturer, CAGE code, part number, country of manufacture, manufacturer size | Which suppliers you can quote from, line by line |
The exception in 121.406(c) is written for small business set-asides and does not name SDVOSB, HUBZone, WOSB or 8(a) set-asides, and secondary sources disagree about how it applies to them. Treat the rule as applying whenever FAR 52.219-33 is in the solicitation, and ask the contracting officer when it is unclear.
The ownership-or-possession condition matters for resellers that ship directly from a supplier. How it applies to a particular delivery arrangement is a question for counsel or the contracting officer.
This answer describes the rules as written and is not legal advice. The sourcing side is covered in the nonmanufacturer rule from the sourcing side.
FAQ
Can a reseller offer a large manufacturer's product on a set-aside?
Only if the rule does not apply to that solicitation or a waiver covers the product. Otherwise the end item must come from a US small business manufacturer.
Does the reseller's NAICS size standard apply?
For a nonmanufacturer on a supply contract, the size limit is 500 employees under 13 CFR 121.406(b), and the manufacturer must be small under the solicitation's NAICS size standard.
Can a reseller bid on DIBBS set-asides?
Yes, subject to the same rule and to DLA's approved-source restrictions, which limit many parts to named manufacturers and their authorized distributors.
People also search for: