Market Research: Opportunities to Improve Acquisition Outcomes

Market research is an integral part of the Federal Government’s acquisition process. Market research is intended to provide the Government with information about marketplace capabilities and costs, which can then be used to encourage competition and negotiate pricing.

The Government Accountability Office (GAO) recently reviewed market research guidance and policy and assessed how market research was conducted at selected agencies. The GAO report, Market Research: Better Documentation Needed to Inform Future Procurements at Selected Agencies, reviewed policy and selected procurements at the Department of Defense (DOD), Department of Homeland Security (DHS) and the Department of Transportation (DOT). In addition, the GAO reviewed market research policy outlined in the Federal Acquisition Regulation (FAR).

The FAR describes “policies and procedures for conducting market research to arrive at the most suitable approach to acquiring, distributing, and supporting supplies and services.” The FAR provides flexibility in the extent of market research conducted based upon variables of the procurement such as urgency, dollar value, complexity and agency experience with similar procurements.

The GAO study found that all reviewed contracts did include at least some form of market research, and, as would be expected, research on contracts valued at $10 million or more was much more extensive. However, the GAO noted that agencies did not take advantage of many available market research techniques for lower value contracts and may have missed competitive opportunities.

According to FAR Section 10, market research techniques may include the following:

  • Communicating with Government and industry individuals who are knowledgeable concerning market capabilities
  • Evaluating recent market research involving similar or identical requirements
  • Creating formal requests for information in relevant publications
  • Researching the Interagency Contract Directory available at https://www.contractdirectory.gov/contractdirectory/ or other Government and public databases
  • Communicating on-line among industry, acquisition personnel, and customers
  • Reviewing source lists for similar products or requirements
  • Reviewing product/service literature
  • Organizing presolicitation conferences or meetings to involve potential Offerors

The GAO report highlighted 4 components of market research that were not consistently documented, but could be used to provide information to future procurements and help those not involved in the research understand how information was collected and analyzed. Information the GAO recommended to be captured included:

  • Research methods
  • When research was conducted
  • Analysis of vendor capabilities
  • Conclusions

Upon review of agency guidance, it was found that only one agency required specific elements of market research to be documented for all procurements, including lower dollar value acquisitions. Given that FAR allows the use of relevant, recent market research as one of the techniques for conducting research,  more detailed information may allow for use of research information on future procurements. The FAR states:

“The contracting officer may use market research conducted within 18 months before the award of any task or delivery order if the information is still current, accurate, and relevant.”

In light of the billions of dollars spent on Government procurements each year, it is worthwhile to consider all market research techniques and weigh the size of the procurement against the resources required to conduct a specific type of research. Improving the usability of recently completed research may be a highly cost effective practice which is applicable to any size procurement.

To continue the discussion about market research best practices, contact us.

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