Chapter 7 MARKET RESEARCH
Conducting market research, as addressed in FAR Part 10, is required by law. While the FAR addresses both the goals of market research and, to some extent, the manner in which it can be conducted, it does not specify the amount of time and money that can or should be spent on market research. Instead, the FAR leaves this to the business judgment of agency officials, based on the size, scope, criticality, and complexity of the acquisition. For example, it might be overkill to spend $200,000 on market research for a relatively straightforward acquisition of modest value, but an expenditure of that size may not be enough for a specific complex, multimillion-dollar acquisition.
REQUIREMENTS AND GOALS
Market research is required whenever
• A new requirements document is being generated
• Offers are to be solicited for acquisitions with an estimated value in excess of the simplified acquisition threshold
• Offers are to be solicited for acquisitions of a lesser value when circumstances justify the cost of market research
• Offers are to be solicited for acquisitions that could lead to a bundled contract—a contract for combined requirements that had previously been procured separately.
One of the major goals of market research is to determine if commercial items, modified commercial items, or nondevelopmental items (NDI) are available to meet government needs either totally or at component levels. Other goals are to identify industry practices in the commercial marketplace (when applicable), to ensure maximum use of recovered materials and promote energy conservation and efficiency, to determine whether bundling (combining requirements) would be appropriate, and to assess the availability of technology that meets applicable accessibility standards issued by the Architectural and Transportation Barriers Compliance Board.
THE SMART BUYER CONCEPT
Clearly, market research is intended to make the government a “smart buyer” through identifying what is actually available to meet government needs before the agency attempts to buy it. Identifying commercial items and NDIs can help the government avoid the expense of reinventing the wheel.
Market research efforts should also include consideration of socioeconomic issues, the availability of competition, and possible cost/quality/performance tradeoffs when finalizing government requirements.
MARKET RESEARCH TECHNIQUES
FAR 10.002 identifies the following techniques for conducting market research:
• Contacting knowledgeable individuals in government or industry
• Reviewing the results of previous market research for the same or similar requirements
• Publishing formal requests for information in technical, scientific, or business publications
• Querying governmentwide databases to identify procurement instruments intended for use by multiple agencies (such as many task order contracts maintained by the General Services Administration)
• Participating in interactive online communications with industry, acquisition personnel, and customers
• Obtaining source lists for similar requirements from government or industry sources
• Reviewing product literature, either printed or online
• Conducting interchange meetings or holding presolicitation conferences to involve potential offerors early in the acquisition process.
Manager Alert
Since FAR Part 10 indicates that market research should be conducted on “an ongoing basis,” and since this guidance clearly applies to both the program and contracting communities, program personnel should work closely with the contracting officer to avoid inadvertently releasing protected procurement information whenever a solicitation has been issued or is about to be issued.
DOCUMENTATION OF MARKET RESEARCH
FAR 10.002(e) requires that agencies document the results of market research in an appropriate manner. Agency regulations may require or suggest a particular format.