The Federal market has policies and processes for non-manufacturers to participate in purchasing pathways as the prime vendor listed on a contract. Requirements of non-manufactures vary between contract vehicles, including the Department of Veteran Affairs (VA) Federal Supply Schedule (FSS) program, the Defense Logistics Agency (DLA) Distribution and Pricing Agreements (DAPA) and Electronic Cataloging (ECAT) programs, and the General Services Administration (GSA) Multiple Award Schedule (MAS) program.
Non-manufacturers serve a vital role within each of these programs by expanding the Government’s access to new and innovated products, the manufacturer’s product utilization into the Federal market, and the non-manufacturer’s reach into a large (potentially, untapped) market.
Manufacturers both produce a product as well as sell that product directly to the Government. Non-manufacturers partner with manufacturers and then hold their own contract to sell the product to the Government through the purchasing platform. It is important to be aware non-manufacturers can also be described as resellers, dealers, suppliers, and (sometimes) distributors. The interchangeable use of these words can be confusing and the context in which each term is used is critical. For example, the VA FSS formal and contractual terms for its two types of vendors are manufacturers and resellers.
Non-manufacturers are subject to the same contract terms as manufacturers, including the use of established Prime Vendor Programs for distribution; however, each purchasing pathway program has differing requirements to qualify the acceptability of non-manufacturers. The VA, for example, prefers to issue FSS contracts to resellers who have more than a 2-year history of experience selling the same product in the commercial marketplace and have had “significant sales” of that product. While the definition of significant sales can vary based on the product, the VA generally considers the following when determining if its resources should be allocated to a reseller’s proposal including both the number count and dollar value of existing commercial contracts as well as the percentage of total sales between the commercial marketplace and other Government entities. If a reseller has “insignificant sales” to commercial customers, then the reseller should expect the manufacturer will be involved in the proposal award process because additional disclosures and documentation will be required.
When evaluating the proposal, the Government will consider if and how the proposed product meets the Trade Agreements Act (TAA) requirements for product origin. This review is particularly important for non-manufacturers, who must obtain accurate information from the manufacturer. The Government will also evaluate the acceptability of any restrictions or limitations placed on the non-manufacturer by the manufacturer.
Successful non-manufacturers usually start with identifying a product that Federal agencies have difficulties procuring, due to either a lack of viable sources of supply or reoccurring issues with available supply already contracted. Then, the non-manufacturer finds a path to facilitating access all while offering a purchasing pathway that complies with Federal agency “preferences” and policies.
Proposals from all offeror types are submitted in the same manner under the same solicitation. The information in the proposals is essentially the same except a non-manufacturer must submit information from the product’s manufacturer. For example, the VA FSS requires a reseller include a letter of supply (LOS) from the product’s manufacturer. The LOS, essentially, confirms the reseller will have access and sufficient supply to the product it has proposed to the Government.
A non-manufacturer business model makes sense for entities who understand the complexities of government procurement and can smooth access barriers for manufacturers. The primary categories to consider when standing up as a non-manufacturer include:
