Market Research (FAR Part 10) is conducted to determine the availability of commercial products and services and to identify and evaluate market practices. It’s a continuous process of finding viable sources of goods and services to meet government requirements and is mandated for all acquisition programs. It’s conducted by key members of a program’s Integrated Product Team (IPT) with the goal of pulling together the necessary market information to be analyzed so an informed decision can be achieved on how to satisfy a need. The results of market research and future plans for market research are included in a program’s Acquisition Strategy.

Definition – “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.” (FAR 2.1)

Federal Acquisition Regulations (FAR) for Market Research

FAR Part 8 “Required Sources of Supplies and Services”: provides a list of potential sources in priority order that Program Managers/IPTs must go thru to conduct market research.
FAR Part 10 “Market Research”: prescribes policies and procedures for conducting market research to arrive at the most suitable approach to acquiring, distributing, and supporting supplies and services.

Market Research is Intended to Determine and Help: [1,3]

Determine if sources capable of satisfying the agency’s requirements exist
Determine the extent to which commercial items or non-developmental items could be used to meet agency requirements.
Determine the practices of firms engaged in producing, distributing, and supporting commercial items, such as type of contract, terms for warranties, buyer financing, maintenance and packaging, and marking
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
Ensure maximum practicable use of recovered materials (see Subpart 23.4) and promote energy conservation and efficiency
Determine whether bundling is necessary and justified

Sources of Market Research Information

FAR Part 8 “Required Sources of Supplies and Services” provides 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 (COTS) solution or one which would require little modification to adapt, using various other means possible. These would include but not be limited to: [1]

Internet searches
Past history
Published price-lists
Published Request for Information (RFI)
Product literature
Manufacturer catalogs
Conferences w/industry
General Service Administration (GSA)
Other Agencies
Trade Shows
Yellow pages

Most Common Market Research Methods

There are a variety of market research methods that can be utilized and the majority are listed above. However, the four that are most used are:

Request for Information (RFI): A Request for Information (RFI) is a standard business process whose purpose is to collect written information about the capabilities of various suppliers. It is often used in market research as a solicitation sent to a broad base of potential suppliers for the purpose of conditioning supplier’s minds, developing strategy, building a database, for an upcoming contract competition.
Industry Days: An event held by a Department of Defense (DoD) Program Management Office (PMO) to present the plans for a current or future procurement to representatives from industry.
Industry Engagement: Having an ongoing industry engagement will allow for an understanding of the capabilities of industry.
Request for Quotation (RFQ): A method of soliciting offers from suppliers for customer’s requirements for suppliers or services that fit within the dollar amount for supplies or services

Market Research Regulations

STATUTORY. A stand-alone, Regulatory requirement at Materiel Development Decision (MDD). [1]

STATUTORY updates (as part of the ACQUISITION STRATEGY) are required at Milestone A and the Development RFP Release Point; not required thereafter. Conducted to reduce the duplication of existing technologies and products, and to understand potential materiel solutions, technology maturity, and potential sources, to assure maximum participation of small business concerns, and possible strategies to acquire them. For programs responding to urgent needs, included in the Course of Action Approach at the Development Milestone. [1]

5 Steps of the Market Research Process

The five (5) steps in the marketing research process are: [1]

Step 1 – Locating and Defining Issues or Problems

This step focuses on uncovering the nature and boundaries of a situation or question-related to marketing strategy or implementation. In defining the issues or problems, the researcher should take into account the purpose of the study, the relevant background information, what information is needed, and how it will be used in decision making.

Step 2 – Designing the Market Research Project

This step is focused on creating a research plan or overall approach on how you are going to solve the issue or problem identified. A research plan or approach is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the required information, and its purpose is to design a study that will test the hypotheses of interest, determine possible answers to the research questions, and provide the information needed for decision making.

The research design involves the following steps: [2]

Secondary data analysis
Qualitative research
Methods of collecting quantitative data (survey, observation, and experimentation)
Definition of the information needed
Measurement and scaling procedures
Questionnaire design
Sampling process and sample size
Plan of data analysis

Step 3 – Collecting Data

This step revolved around obtaining the information that you will need to solve the issue or problem identified. Data collection involves a field force or staff that operates either in the field, as in the case of personal interviewing (in-home, mall intercept, or computer-assisted personal interviewing), from an office by telephone (telephone or computer-assisted telephone interviewing), or through the mail (traditional mail and mail panel surveys with recruited households).

Step 4 – Interpreting Market Research Data

Interpreting research data: This step is focused on examining the data and coming up with a conclusion that solves the problem.

Step 5 – Report Market Research Findings

The final step is to report the research findings to those who need the data to make decisions. The findings should be presented in a comprehensible format so that they can be readily used in the decision-making process. In addition, an oral presentation should be made to management using tables, figures, and graphs to enhance clarity and impact.

Defense Acquisition Guide (DAG) “Market Research”

FAR Part 10 requires the Acquisition Strategy to include the results of completed market research and plans for future market research. (See also the JCIDS Manual ). Market research information provided in the Acquisition Strategy should be sufficient to satisfy the requirements of 10 USC 2366b.

For the Milestone B certification, compliance with 10 USC 2377, 15 USC 644, WSARA Sec 202, other statute & Defense Federal Acquisition Regulations Supplement (DFARS) determines the outcome of the market strategy certification element. Market research should yield an understanding of potential material solutions, their technology maturity, and potential sources, and should suggest strategies for acquiring them.

Market research is a primary means of determining the availability and suitability of commercial items and the extent to which the interfaces for these items have broad market acceptance, standards-organization support, and stability. In addition, market research is important in seeking small business capabilities. Thorough market research needs to be performed to determine whether or not small businesses are capable of satisfying the requirements.

Market research supports the acquisition planning and decision process, supplying technical and business information about commercial technology and industrial capabilities to arrive at the most suitable approach to acquiring, distributing, and supporting supplies and services. Market research, tailored to program needs should continue throughout the acquisition process and during post-production support.

Market Research Report Format

Background Information
Product/Service Description
Performance Requirements
Available Sources (vendors)
Product/Service Data
Environmental Impact Considerations & Cert Requirements
Commercial Opportunities
Prevalent Business Practices
Technology Trends & Technology Insertion
Small Business Opportunities
Market and Pricing Issues, Terms & Conditions
Other Considerations
Government’s Presence/ Leverage in the Market
Market Analysis, Conclusions, and Recommendations
Market Research Techniques Used/Functional Involvement

AcqNotes Tutorial

AcqLinks and References:

Updated: 4/2/2024

Rank: G80.9

Acquisition Process