For purposes of small business goals under a subcontracting plan, my question relates to small vendors who are authorized retailers for larger businesses. We are relatively new to the "large prime" game and are still awaiting our first win as a big (cross our fingers it is soon)...we plan on allocating indirect costs and are attempting to get those numbers and vendor size classifications settled here early.

My question: We have come across an office supply/equipment store, a local small here in town (for our purposes, I will refer to it as ABC Equipment). ABC Equipment is an authorized retailer for FP mailing solutions, a large. We go to rent a postage meter from ABC and the agreement comes back with the FP letter head and template.

Can we consider this transaction as business with a small? Is it who we buy from or who we contract with? At first blush and without any support, I feel as though this transaction would further the government's end of promoting small businesses by growing ABC Equipment....but hopefully you can see the dilemma. Anyone have any guidance?

As always, I humbly thank you for your help and patience!

Nebraska.

I'm not clear on what your situation is. Are you saying you issue a subcontract to FP? If so, how are you buying from ABC?

We are dealing with ABC...they are the authorized dealer of FP's products. Just trying to figure out if there is any way we can claim the money spent as to a small because ABC (the dealer) is small.....although it is a FP product, and using an FP agreement.

If ABC is a bonafide small business then you can consider them a small business for your subcontracting plan. ABCs DUNS number/CAGE code should reflect that they are a small business if they have a DUNS number/CAGE code. Since you are talking about a subcontractor and not a prime contractor, there will probably be no significant concerns such as size protests unless your company is a small business and your status is protested. Since you are a large business, that would not be a concern.

This answer is based on my experience with contracts like the NASA SEWP contract where small businesses provide products manufactured by large corporations and the Goverment still considers the source as a small business.

Who will the check be made out to?

I have looked through the SBA regulations and can find nothing that would make the non-manufacturer rule applicable to subcontractors. Therefore, I agree with DW that if you subcontract with ABC that would be acceptable.

Nebraska,

See FAR 19.703. How did ABC represent itself to you?

I'd say yes, they are considered small. The Government buys things from "dealers" or "authorized re-sellers" all the time and the transaction is considered awarded to a small business as long as they are considered a small business.

CS123,

Yes and this is done wrong all the time too. The reseller has to use the products of small manufacturers to qualify as small business unless the CO gets a non-manufacturer waiver from SBA first. Many Junior contract specialists do not understand this and many experienced personnel don't either. With that said, SBA should put out blanket waivers for a lot of things that everyone knows must come from large business through the small resellers. That would solve many of the mistakes and save everyone a lot of work.