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Public procurement officials frequently purchase through indirect marketing and distribution channels, separating buyers from manufacturers. Normally to fulfill small business set-aside requirements, product manufacturers must also be a small business. When no small business manufacturers exist for a product, class waivers to the non-manufacturer rule (NMR) allow small business distributors and wholesalers to provide products that are not made by small businesses. This study models the effectiveness of class NMR waivers for increasing small business utilization. A time series panel found that NMR waivers increased small business utilization in industries characterized by low levels of firm concentration and price inflation.

Class waivers to the non-manufacturer rule: Effects on small business utilization in public procurement