Law360, New York (March 4, 2015, 10:17 AM EST) -- Commercial software manufacturers and certain federal resellers could find their federal business significantly impacted by an SBA Proposed Rule published recently at 79 Fed. Reg. 77955, December 29, 2014. If adopted without changes, the Rule will incentivize the government to buy commercial item software through small business set asides under NAICS Code 511210, which is currently limited to vendors under a size standard of $38.5M Average Annual Receipts over the prior three years. To do this, the SBA will be granting individual waivers of what is known as the "non-manufacturer rule" for certain software that meets the regulatory definitions. The waiver means that an eligible small business may resell software manufactured by a large business under the non-manufacturer exception to the general rule on limitation of subcontracting. While proposed for revision, the general rule currently requires a small business prime contractor on a set aside contract to self-perform 50 percent of the manufacturing costs, excluding materials costs. The pending revision will change the subcontracting formula from a cost-based calculation to one based on the amount paid to the prime contractor and similarly situated entities....