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How Do Government Agencies Perform Market Research? Blog Feature
Leslie Crowley

By: Leslie Crowley on January 18th, 2022

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How Do Government Agencies Perform Market Research?

Government Business Development | Government | 5 Min Read

As you may be aware, government agencies cannot make decisions on a whim. There are several rules, regulations, precedents, and processes that are put in place, so each decision is made carefully and methodically. This is especially true for federal procurement. Whenever a government agency has the need for a particular product or service, they often conduct market research to make sure they are surveying all the possibilities and finding the one that works the best for them. This doesn’t always mean the cheapest or the fastest, but these can be factors in determining what the best value is.

It’s important for GSA contractors to understand what market research is and how it's performed because it often determines the scope of a government solicitation. Here’s what you need to know about how government agencies conduct market research.

What is Government Market Research?

Market research is the process of collecting, organizing, maintaining, analyzing, and presenting data that allows government agencies to achieve the best value when procuring products and services. To put it simply, market research helps agencies make informed decisions on which products and services will best suit their needs. Market research is more than just looking at the best value or price—it also includes gathering data on the market capabilities and business practices associated with them.

Why Do Government Agencies Conduct Market Research?

As we touched on before, market research is really useful for agencies to identify what their needs are and how they can be met in the most efficient way possible. To break it down, market research is performed for 4 main reasons:

  • Required by law
  • Good business practice
  • Defines necessary requirements and processes
  • Commercial optimization of goods and services

Of course, the main driving factor is that market research is required by law under certain circumstances. The Federal Acquisition Regulation (FAR) Part 10 requires government agencies to conduct market research under the following conditions:

  • Before developing new requirements documents for an acquisition.
  • Before soliciting offers for acquisitions with an estimated value above the Simplified Acquisition Threshold (SAT).
  • Before soliciting offers for acquisitions with an estimated value below the SAT when adequate information is not available, and the circumstances justify its cost.
  • Before soliciting offers for acquisitions that could lead to a bundled contract.
  • Before awarding a task or delivery order under an Indefinite Delivery/Indefinite Quantity (IDIQ) contract for other than a commercial product or service above the SAT.
  • To take advantage of commercially available market research methods in order to effectively identify the capabilities of small businesses and new contractors during disaster relief or against a recovery from cyber, nuclear, biological, chemical, or radiological attack.

The bottom line is market research is the key to leveraging commercial products and services to meet agency needs and solve their most complex problems.

How Do Government Agencies Perform Market Research?

Whenever a government agency decides they want to acquire a product or service, they start off by stating their needs and determining whether market research should be performed. If market research is necessary, then the agency will set out to determine if commercial items, commercial services, or non-developmental items are available to meet their requirements.

The extent of the market research can depend on factors like urgency, estimated dollar value, complexity, and past experience. Market research can take several different forms including reviewing results of recent market research to meet similar requirements, contacting knowledgeable individuals in the government and industry regarding market capabilities, reviewing catalogs published by manufacturers or distributors, and participating in interactive online communication among the industry, acquisition personnel, and customers. It also often comes in the form of a Request for Information (RFI) or a Sources Sought notice. These are important opportunities for contractors to get their foot in the door and inform agencies of their solutions and capabilities.

Types of Market Research

Not all market research looks the same. There are 2 main types of market research which we’ll go into below.

Strategic market research: conducted continuously throughout the acquisition process. It could start before acquisition begins and continue after it’s over. This type of research helps acquisition, engineering, project management, and other personnel stay informed on overall market developments and trends. This type often takes the form of a Sources Sought Notice. 

Tactical market research: conducted at specific points throughout the acquisition process. It’s designed to provide comprehensive information to answer specific questions about capabilities, products, or services available in the market. An agency’s requirements need to be frequently revisited and considered when performing tactical research. This type often takes the form of a Request for Information (RFI).

Who is Involved in the Process?

So by now you may understand why market research is performed and what goes into it, but who is actually involved in the process? A market research team looks different for each agency and acquisition, but there’s a general list of specialists that get called in at various points depending on the size, scope, and phase of the acquisition. Each member brings in experience from a different functional area and background. They include:

  • Technical – this person may be the program manager, the technical specialist or the project officer
  • Logistics specialist
  • Cost Analyst
  • Contracting Officer
  • Requirement Owner or End User
  • Test/Evaluation Specialist
  • Legal Counsel

What Does Market Research Mean for Government Contractors?

Both strategic and tactical market research are used to shape the acquisition process, meaning the information gathered from market research will ultimately affect:

  • Acquisition strategy
  • Requirements
  • Support and test plans
  • Product descriptions
  • Statement of work
  • Evaluation factors
  • Contract terms and conditions

The list above demonstrates that market research can significantly guide the direction of an acquisition. Contractors want to be cognizant of these factors, and also keep their eyes out for opportunities to be a part of market research. These will often come in the form of Requests for Information (RFI) and Sources Sought Notices (SSN) as mentioned above. Getting involved in the acquisition process in its early stages can be crucial for winning an award. Bids are often unofficially won before the final Request for Proposal (RFP) is released, and you’ll want to make sure the government agency in question knows who you are before it gets to this step.

Getting Ahead of Market Research

Early communication is key—it can provide government agencies with the opportunity to learn about your solutions and how they might be useful for achieving the desired outcomes and meeting all the performance requirements. If you want to learn more about government solicitations, you can check out our blogs on “How to Find Federal Opportunities and Capture Government Business,” and “Everything You Need to Know About a Government Solicitation.” If you have more general questions about government contracting such as getting a GSA Schedule or managing your GSA Schedule, please reach out to one of our experienced consultants.

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About Leslie Crowley

Leslie Crowley is a Lead Account Manager for Winvale’s Public Sector department where she manages partner accounts under Winvale’s GSA MAS Large Category F contract. Leslie has vast experience building new business, securing customer loyalty, and forging strong relationships with external business partners.