Conducting Market Research Teresa Anthony Rex Elliott November 23, 2004

Conducting Market Conducting Market ResearchResearch

Teresa AnthonyTeresa Anthony Rex Elliott Rex Elliott

November 23, 2004 November 23, 2004

Presentation OverviewPresentation Overview

IntroductionWhat is Market Research?Elements of Market Research (FAR Part 10.001)RecommendationsConclusionHelpful WebsitesQ&A

Definitions – FAR 2.101

Market Research – Collecting & analyzing information about capabilities within the market to satisfy agency needs.

Non-developmental Item – Previously developed supply item (or developed item not yet in use) used exclusively for government purposes and requiring only minor commercial-type modification to meet the requirement.

Definitions – FAR 2.101 Commercial Item:

– Item of a type customarily used for non-governmental purposes and currently available to the general public.

– Evolving item will be available to satisfying delivery requirements.

– Modified item would be available.– Commercial item combination/package

available to the public.– Services in support of commercial items– Other services of a type based on established

catalog or market prices for specific tasks.– A Commercial Item retains its identify

What is Market Research? Tool to determine what is available one the

market to meet a specific need and the terms & conditions customarily used in the commercial market for the item or service being procured.

Federal Acquisition Streamlining Act of 1994 (FASA) prescribes market research as a critical component in describing the agency needs, developing an overall acquisition strategy, & identifying the terms, conditions, & practices appropriate for the items being acquired.

Market Research cont’d

FAR Part 10.001 requires: Before developing new requirements

documents. Before soliciting offers above the Simplified

Acquisition Threshold (SAT) ($100k) & Before soliciting offers below the SAT when

adequate information is not available.FAR Part 10 aids Option exercises & Sole Source Contract

Action

Purpose of Market Research Determine if NASA’s need can be met by a

commercial item, a modified commercial item, or item used exclusively for Governmental purposes.

Market Research should also consider customary practices regarding modifying items for customers, warranties & licenses, buyer financing, etc.

Can help obtain best price/best value for the government. (Options)

Identify successful acquisition strategies

Why Perform Market Research?

It’s the law (FASA of 1994) Buy commercial/NDI to satisfy agency needs Require primes and subs to incorporate

commercial items in systems State requirements in terms that encourage

suppliers to offer commercial items Remove impediments to the acquisition of

commercial items. And it’s smart

Failure to Perform Market Research

Can result in: Sub-optimum descriptions of

requirements Protests of sole source or limited

competition acquisitions. GAO could order re-competition and

payment of bid and proposal costs. Contract Administration Problems The government could miss out on the

newest & best technology or services.

How much market research is enough?

The extent of market research will vary, depending on such factors as complexity, urgency, estimated dollar value, & past experience.

Who performs the market research?

Joint technical & procurement collaboration

SBA specialist & resource analyst also provide some feedback.

Techniques for accomplishing market research

Contact knowledgeable people within Government and industry.

Review recent market research for similar items. Publish formal requests for information (RFI). Query Government and commercial databases. Obtain source lists for similar items from other

organizations. Commercial catalogs and other products

literature. Conduct interchange meetings or presolicitation

conferences with potential vendors. Internet

Why Should Industry Help Government Do Market Research

Helps Government avoid mistakes Helps industry understand Government

requirements better Allows communication with Government

before formal acquisition rules apply (marketing opportunity)

Results

If one commercial item or source is found, procurement proceeds in accordance with FAR Part 12 – Acquisition of Commercial Items

If commercial item is not found, requirement should be reviewed to see if it can be restated to permit commercial item.

If FAR Part 12 is not used, the synopsis should include the numbered note of FAR 5.207 (f) (4) that the Government will not be using Part 12.

Documentation – FAR 10.002(e)

Agencies should document the results of the research in a manner appropriate to the size and complexity of the acquisition.

The documentation should summarize the activities taken by the responsible parties.

No particular format required – Matter of judgment based on urgency, complexity, $ value, existing knowledge and logical organization.

A market research report template can be found in the Virtual Procurement Office (VPO). (optional)

Topics in Market Research Documentation

Summary of acquisition background Identification of market research team Description of agency’s needs Desired or required schedule for the delivery of

the end items. Explanation of the list of potential suppliers Summary of industry sources Customary commercial terms, provisions, and

conditions Price ranges The Market Research (including summary of

available commercial or nondevelopmental items.)

Recommendations

Start early Involve users Communicate Market research is ongoing Tailor the investigation Refine as you proceed Document, document, document! More training

Helpful Web Sites

http://www.arnet.gov/References/fssciate.html-An anthology of commercial terms & conditions, featuring info from a number of America’s largest companies.

http://procurement.nasa.gov/cgi-bin/cci/first.cgi - Consolidated Contracting Initiative (CCI)

http://bls.gov/ppiover.htm - Producer Price Index from the Bureau of Labor Statistics

http://fpdc.gov/fpdc/fpdc_home.htm - Federal Procurement Data Center

www.gsaadvantage.gov – GSA

Helpful Sites

www.thomasregister.com – Industrial Suppliers Company Guide

www.imart.org – Search engine for sources (Aircraft, Chemicals, Computers & Electronics, Office Equipment, etc.)

http://www.stat-usa.gov – STAT-USA/Internet is a Government opportunities which replaced the Commerce Business Daily

http://www.napm.org – National Association of Purchasing Management

Conclusion Performing market research is a logical process

that, if planned, can provide the information you need to generate requirements & locate sources & information on alternative commercial products, services, & practices.

Conducting market research up front may take time and effort we may initially feel too busy to spend; however, the benefits down the road in terms of a smoother, faster buy with fewer performance problems makes it more than worthwhile.

Q & A