Knowledge Center · Product Sourcing
Can You Sell Products to the Federal Government Without Manufacturing Them?
Yes—but the right to resell a product and the ability to satisfy a particular federal solicitation are separate checks.
You do not necessarily need a factory to sell products to the federal government. A distributor or reseller can supply another company’s products, provided the acquisition permits the arrangement and the seller meets the applicable eligibility, sourcing, and performance requirements.
What value does the reseller provide?
In a workable resale arrangement, the prime contractor connects the requirement to a dependable supply chain. That can include obtaining authorized products, matching specifications, comparing quotes, arranging compliant delivery, and managing documentation and customer communication.
For example, a customer may need 20 printers delivered to two offices with particular accessories and warranty coverage. A reseller must verify the exact configuration, source, availability, delivery requirements, and price. Sending a supplier’s website link is not the same as accepting responsibility for the government order.
What is the nonmanufacturer rule?
The nonmanufacturer rule allows qualifying small businesses to provide manufactured products they did not make on certain small-business program acquisitions. Where it applies, the reseller generally must:
- Have no more than 500 employees, subject to the 150-employee IT value-added reseller exception under NAICS 541519.
- Normally sell the type of product through retail or wholesale trade.
- Take ownership or possession in a way consistent with industry practice.
- Supply the end product of a qualifying small-business manufacturer, processor, or producer made in the United States, unless the relevant requirement is waived.
The regulation includes additional details for particular products, kits, multiple-item acquisitions, and classifications. The procurement’s assigned classification matters; a seller cannot avoid the rule simply by choosing a wholesale label for itself. [1]
How does the award program affect a reseller?
Start by checking whether the solicitation is unrestricted, set aside for small businesses generally, or reserved for a specific small-business program. The applicable sourcing rules depend on the acquisition, not the reseller’s preferred business model.
For ordinary small-business set-asides, the simplified acquisition threshold affects whether the nonmanufacturer rule applies. The standard threshold is currently $350,000, but special circumstances can change it. [2] [3]
Do not carry that ordinary small-business set-aside exception over to awards under the 8(a) Business Development, HUBZone, Women-Owned Small Business (WOSB, including EDWOSB), or Service-Disabled Veteran-Owned Small Business (SDVOSB) programs. FAR 19.505 covers specified awards under those programs regardless of dollar value. For any covered product acquisition, review the applicable program, product requirements, and written waivers. A business certification alone does not establish that the offered product is eligible. [2]
Also avoid applying a manufacturing subcontracting percentage mechanically to a qualifying nonmanufacturer. The rules distinguish those situations. If a requirement combines supplies, services, installation, or kits, resolve the classification and applicable clauses before committing a price.
What does an SBA waiver change?
SBA can issue class waivers for particular product categories or individual waivers for a procurement. The contracting officer requests an individual waiver; a seller cannot declare one for itself. FAR calls for the solicitation to identify the applicable waiver. A brand-name requirement is not evidence that a waiver exists. [2]
A waiver of the domestic-small-manufacturer requirement does not erase other nonmanufacturer qualifications or separate obligations such as Buy American, Trade Agreements, or other product-origin restrictions. Verify the precise waiver and the remaining solicitation requirements. [1]
Our practical approach is to retain the written waiver reference with the pursuit file and map it to the actual product being offered. When its applicability is unclear, ask the contracting officer through the stated question process.
Can the supplier ship directly to the government?
Direct shipping can be part of a supply arrangement, but it is not a shortcut around ownership or possession, traceability, or contract performance. The nonmanufacturer regulation does not impose a blanket warehouse requirement. Your actual arrangement still needs to satisfy the applicable rule and the delivery terms. [1]
Separately confirm any manufacturer or distributor restrictions. A general account approval may not establish authorization for a particular brand, federal sales channel, warranty, or online marketplace. Ask for the product-specific evidence the solicitation requires. Do not claim an authorized relationship merely because a product appears in a catalog.
Read the FOB shipping guide and payment-timing guide together. A compliant product, an achievable delivery date, and sufficient working capital all need to fit the same order.