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Market Research

DAU GLOSSARY DEFINITION

A process for gathering data on product characteristics, suppliers' capabilities, and the business practices that surround them. Includes the analysis of that data to inform acquisition decisions. There are two types of market research, strategic market research and tactical market research.

Alternate Definition

As defined in the Federal Acquisition Regulation (FAR 2.101) means; collecting and analyzing information about capabilities within the market to satisfy agency needs. A more elaborated definition of the concept is that “Market research is a continuous process for gathering data on product characteristics, suppliers’ capabilities, and the business practices/trends that surround them -- plus the analysis of that data to make smart acquisition decisions.”

General Information

To understand the subject of market research we must begin within its definition of being described as a “continuous process for gathering data.” That process takes shape from both a strategic and a tactical vantage point. Strategic market research is that overarching process of market “surveillance” that will take place continuously throughout the entire acquisition lifecycle. From the early stages of the Materiel Solution Analysis Phase through to the final steps in the Operations and Support Phase; acquisition workforce members in all disciplines are engaged at varying degrees of market research to remain knowledgeable in market developments that may meet government requirements. The tactical side of market research is the market “investigation” layer of the process. Again this is ongoing throughout the acquisition lifecycle as well; however the difference is in its focus and scope. In the tactical market research environment, we may periodically find ourselves faced with a specific challenge that requires a focused effort to find a plausible, timely, and affordable solution. These are relatively short in duration; an investigative market research event that may take place at multiple times during any phase of the acquisition cycle but is focused on finding a state of the current solution that will work now.

Market research is mandated for every acquisition, as governed by FAR Part 10, and is intended to help:

  • Discover prevailing industry practices
  • Identify the availability (if any) of commercially available solutions
  • Identify customary industry terms, conditions, and warranties
  • Understand distribution and logistics capabilities
  • Uncover historical acquisition information
  • Ensure maximum competition
  • Reveal pricing information

Market research is conducted by all members of the acquisition team including contracting (business advisors), program managers, engineers, logisticians, legal staff, test and evaluation personnel, cost specialists, the customer, etc. Though each may focus attention toward specific aspects, their ultimate goal is to pull together the necessary information to be analyzed so an informed decision can be achieved. While it is necessary for every acquisition as stated earlier, the extent of research that may be required is dependent on five variables which are, the complexity of the acquisition, how urgent the need, the estimated dollar value, how readily information is available, and past experience with the product or service being acquired.

When it comes to satisfying the actual requirement, thereby “obtaining” the item or service, you must know where to find them… we refer to this as Sources. So what methods can we use to find our source? Are there any rules governing this aspect of market research? You can begin your quest to satisfy this wonderment in FAR Part 8, Required Sources of Supplies and Services. Here you will find that before you can proceed to the open market to obtain goods or services for the Federal Government, you must run through a list of potential sources in priority order. Once you’ve satisfied that requirement, you can expand your search, preferably for a commercial off-the-shelf solution or one which would require little modification to adapt, using various other means possible. These would include but not be limited to:

  • Internet searches
  • Past history
  • Published price lists
  • Published RFI
  • Product literature
  • Manufacturer catalogs
  • Conferences w/industry
  • Other Agencies/GSA
  • Trade Shows

The goal is to find what you need that will provide mission accomplishment without having to develop a solution from scratch.

As with any practiced profession, most successful outcomes are the results of a repeatable process that consistently helps us accomplish our goals efficiently and predictably. Market research encompasses a simple process to help lead us from the unknown to the known. It starts with being able to describe sufficiently the government’s needs to be able to conduct Market Research. This allows us to determine sources. Once there we can assess if those sources can provide a commercial item. If that’s not possible, see if a nondevelopmental item is available or if a mixture of commercial or nondevelopmental items can be incorporated into a component level solution.

In most occupations, they say “the job isn’t done til the paperwork’s complete!” Well, in contracting that axiom is especially true. There are a number of functions and tasks contracting professionals must engage in to exercise prudent use of taxpayer dollars and in many instances the trail of logic must be fully supported and documented for the official record to stand up to the possible scrutiny of public interest. Market research is one such task that the FAR both suggests and requires documentation. In FAR Part 10, it states “Agencies should document the results of market research in a manner appropriate to the size and complexity of the acquisition.” This would indicate there is some flexibility in documenting the situation. The documentation may take the form of a formal market research report detailing all aspects of your research or an informal report such as a short memo for record. Back in FAR Part 7 and DFARS 207 however, we must provide details of our sourcing and competition when it comes to writing our acquisition strategy. This is speaking directly to our audience concerning the market research we plan to conduct and ultimately that which we have accomplished.

In summary, market research is a process of finding viable sources of goods and services to meet government requirements that must be done for all acquisitions. It is a joint effort conducted by key members of the integrated product team which will bring forth many beneficial aspects if done thoroughly and requires some level of documentation to detail what steps were taken to find the best solution.

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