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At Public Spend Forum, we think market research, expertise, and analysis is a critical capability for public sector contracting professionals. And we aren’t alone. In a study on workforce competencies commissioned by The Volcker Alliance and supported by our Public Spend Forum research team, we found that only a very small proportion of the procurement workforce is considered to be doing market analysis and research well.

public procurement competencies

What makes this especially challenging is that “supply market analysis” is identified as a critical skill for the procurement function. So to address this gap and improve the quality of market research done within the public sector, we began developing tools and resources to help buyers find suppliers and to help suppliers be found by their ideal buyers.

market analysis critical skill

The result of this effort is Seven Steps to Better Government Market Research, which you can download below. In a series of blog posts, we’ll be examining each of the steps and providing some free tools and templates that you can use to improve your market and supplier research outcomes. Here are the seven steps:

  1. Understand what you are buying, and why you are buying it
  2. Ask the right questions
  3. Use a mix of research resources
  4. Identify the right keywords and commodity codes for your research
  5. Identify the supply base and contractors
  6. Consider available contract vehicles
  7. Engage suppliers throughout the process

Let’s start this series with step 1, understand why and what you are buying.

government contractorsStep 1 – Understand what you are buying

This may seem obvious, but there are more nuances to consider before you jump straight into market research. First and foremost, consider what it is you are buying. Is it an item or service that is commonly purchased, not just within the government but by private industry as well? If the answer to that question is yes, you are buying commercial items.

Commercial items may be easier to find through common search platforms like Google, but be aware that not every commercial seller is capable of doing business with the government. So you may find great companies and products in your initial research, but it is important to know before you dig too deep whether that company is able to compete for government contracts.

Once you find companies of interest, you can determine whether they are valid government contractors by looking up their unique identifier in the Data Universal Numbering System (DUNS) and then search that DUNS number in Or, you can use a database like GovShop, which lists authorized government contractors, to screen out companies that won’t sell to you and your public sector agency in the first place. Each company profile in GovShop includes the supplier’s DUNS number, which is a requirement for government sales.

Finding these suppliers is a good predecessor to learning about what items or services you are procuring for your customer. Simply reading their websites, white papers and capability statements can help you learn what they do or provide, and this knowledge translates well into helping your customers write requirements documents that clearly explain desired business outcomes.

We created GovShop to help contracting professionals more easily find relevant suppliers. Our database, which is free to use and browser-based, allows you to search for high-quality contractors that focus on the government market. Whereas the primary channel for such a search was once commercial search engines like Google and Bing, there is now GovShop, which filters out companies that have no interest in the public sector marketplace.

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GovShop is free to use and requires no software download. You can begin using it right away for supplier profiles that will provide inputs to your market research, and each profile has the information you need to go deeper into product and service offerings. Whatever you and your customer ultimately decide to write into the requirements document is going to dictate the proposals and quotes you receive from your solicitation, so it’s important to get this right.

Focused supplier and market research is your buffer against requirements documents that enable contractors to put their best foot forward. Here are some research questions you’ll want to answer in this “what are you buying” phase because the information obtained will be crucial for your requirements and solicitation documents.

Research Question Why You Need to Know
Is my customer’s need something that could be satisfied by products or services that already exist in the commercial marketplace? Commercial items are easier to acquire, have more favorable terms and conditions for both parties, and many agencies provide flexibilities under certain commercial item spending thresholds that can streamline the procurement process.
With respect to the need, what are the functions it will perform, or the performance required by the system, or the essential physical characteristics of the item? Understand not just the components of the product or service, but how it will benefit the end users or beneficiaries. This is the best way to conduct research as a trusted business advisor, and can help you provide important context for your recommendations and questions during this planning phase.
Is my customer describing a brand name item or service, and if so are their other suppliers that offer equivalent items or services? As many of us can relate in our private lives, when we find brands that we like, we tend to buy them again. Whether its cars or large appliances, we do develop preferences for items with which we are familiar, and government customers are no different. But unlike in our private lives, we cannot show brand loyalty to a specific vendor without proper justification. If it seems like this is going to be an issue for your program customer, prepare for a long conversation on the pros and cons of brand name or equal procurement methods.
Are any of the services described inherently governmental functions? Hiring contractors is a great way to fortify a workforce or bring in specific talent to solve problems, but certain positions within government are labeled inherently governmental for a reason. Outsourcing these functions can prove quite difficult and often requires its own justification process, something you’ll want to consider as you put your timeline together.
Do any of the personnel roles require access to sensitive information? Hiring contractors into sensitive positions where they will have access to classified information or medical information about individuals means you’ll be needing to spend a lot of time and effort creating job descriptions that describe precisely what standards a contractor’s proposed resources must meet in order to be eligible for the position. Before you get too far ahead with your staffing plan, you should consider whether the resource you are describing even exists in the marketplace.
Does the customer envision having contract staff work on site? Some organizations have large office spaces with vacant cubicles and workspaces for contracted teams, but not every organization. If yours is short for space and your program customer wants their contract personnel on site, you’ll need to include coordination with facilities management to your list of planning activities.
How will the outcomes of the services be described? For services contracting, it’s very important these days to understand what will be delivered in exchange for the time spent working. If your contract type will be labor hour, you’ll need to provide clear expectations to the contractor so they know how to spend their time, and then you’ll want to make sure the program is prepared to oversee that time to ensure work product is submitted and acceptable. For more performance-based service contracts, you’ll want to make sure the outcomes are clearly defined and that contractors have an understanding of what to deliver. Many times this can be discussed in the market research phase when you are speaking and engaging with suppliers.
What elements of the product or service can be considered cost drivers? Market research isn’t just about technical specifications and labor, it’s about understanding whether your customer’s ideal item is within the government estimate that results in the obligated budget amount. Many times, a customer’s requirement will include specifications that can increase (or decrease) costs, so you’ll want to have a general idea from your market research who these cost drivers will impact the acquisition.

Download our market research guide for a handy template that runs through the above questions, including why you should be asking them. If you use this document to guide your research, you’ll be ready to take full advantage of step #2, which we cover in our next blog on how to ask the right questions of our customers and stakeholders to fill in any gaps from our supplier and market research.

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