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If you had to distill the entire contracting function into one critical outcome, buying useful items at the best possible value wouldn’t be far off. Every activity a contracting professional does impacts the outcome they achieve, and some are more important than others. If you mail in the price estimate, you can make up for it during the evaluation. But if you skimp on market research, you put your acquisition in serious jeopardy of failing to deliver.

This means that at multiple points in your career, you’ll be tasked with developing a Market Research Report (MRR). Whether it’s part of your overall acquisition plan or a standalone report you deliver for a boss or peer, the MRR is a prerequisite to responsible government contracting. And depending on what you’re buying, it can be a bit of a chore. 

Fortunately, with a few tips and tricks, you can save time and energy that can be deployed on other actionable tasks. In this guide, we’ll show you how to complete your MRR as efficiently as possible. 

Here’s what we’ll cover: 

  • Overview of the common federal Market Research Report
  • A quick way to get the acquisition history
  • Identifying potential sources of supply
  • Conducting a comprehensive market analysis
  • Making a commercial item determination
  • Determining whether a set-aside is appropriate
  • Free tools to support your independent government cost estimate
  • Recommending your acquisition strategy
  • Showing your work with supporting documentation

Ready to produce your MRR with maximum efficiency and efficacy? Let’s get to it!

What’s in a Market Research Report?

A standard federal MRR needs to be completed in accordance with FAR Part 10 – Market Research, and Part 11 – Describing Agency Needs. It will also need to determine whether you can acquire your products from the commercial marketplace, so Part 12 – Acquisition of Commercial Items is one of the first regulatory checkpoints that come into play.

Depending on the estimated value of your contract (which we’ll get to shortly), your agency may have different requirements for what constitutes a viable MRR. Regardless of the value of the items to be acquired, Market Research should be conducted prior to every purchase you make, but there is no regulatory standard for what constitutes an appropriate level of market research. 

In general, and according to FAR Part 10, market research should be conducted “appropriate to the circumstances” so that requirements can be broadly competed with solicitations that do not contain unduly restrictive terms and conditions. This is one of what seems like 10,000 instances in federal acquisition where the answer to a simple question, “what constitutes appropriate?”, turns out to be “it depends.” Basically, it’s at the discretion of the contracting office and their business judgment (plus whatever internal policies, procedures, and guidance may be relevant).

Before you get started on your MRR, make sure you track down and familiarize yourself with your agency’s procedures and special requirements.

Describing the Acquisition History and Delivery

Whoever said “imitation is the sincerest form of flattery” must have spent time as an 1102, because contracting professionals love to save time by taking a prior contract (for the same or similar items), running a control+find function, and replacing dates and other identifying information with whatever substitutions are necessary to bring that template up to date. 

It’s a good play that can save you a lot of time, but it only works if you’re buying standard items. Any unique or non-standard requirement is going to require building from the ground up. But if you’re buying common wares and decide to source part or all of your solicitation from a prior contract, make sure you update the clauses and do give it a thorough read. Treating old contracts as history lessons and harvesting them for parts is a great hack, but get lazy and you’ll get stung with errant terms, conditions or requirements that have nothing to do with your present need.

Potential Sources of Supply

One of the great streamlining techniques of modern contracting is the use of existing sources of supply like GSA Schedules and multi-agency contracts, both of which fall into a broader category of Interagency Acquisition. The pros and cons of using an existing vehicle are a topic for another blog, but most MRR’s have a section for contracting professionals to identify any vehicles that may be used.

Prior to GovShop, our free platform for conducting government market research, you might have gone to multiple websites to find vehicle-holding vendors with relevant goods and services. But now we’ve made it easy by including a search across all GSA Schedules, major GWACs, and multi-agency IDIQs. A simple keyword search immediately returns a host of available contract vehicles deserving of your attention as you continue to develop your acquisition strategy.

MRR - GovShop Contract Vehicle search
Use GovShop’s convenient Contract Vehicles search feature and save time on your MRR!

Simplified Market Analysis

The market analysis section of an MRR typically requires the contracting professional to first check FAR Part 8 to determine if the items can be acquired from any of the mandatory sources listed in Section 8.002. These don’t always apply, but be a good professional and double check. Mandatory sources like National Institutes for the Blind and Federal Prison Industries provide an important vocational benefit that supports our national and economic well being.

In cases where no mandatory sources exist for your requirement, you’ll be faced with a cumbersome task: compiling a list of companies that may be capable of fulfilling your need, to include basic demographic data like socioeconomic status, ownership, and proof of registration with the government. Fortunately, you can save a lot of time and energy by creating this list in GovShop with our market-specific filters. They can help you get to a short list of qualified suppliers in no time at all.

GovShop also lets you create multiple lists based on the type of market research you’re performing, so you can have a dedicated list of favorite suppliers for every acquisition you’re supporting. As you compile this list (which does require creation of a free account), remember that you can use the “Firms Registered with Government” filter to remove any suppliers that aren’t already registered, if that’s your preference. Just keep in mind some emerging technology companies may not be registered today, but can easily get registered if you’re interested in their participation. 

Read More: How to Do Business With Emerging Technology Companies

Another input for the market analysis is a description of the techniques and methods you used to conduct the market research. GovShop has over 1 million supplier profiles, compiled from existing federal sources and public databases (including GSA Schedules) but also our own research team. Therefore, market research conducted on GovShop checks the box on several methods we commonly see listed in MRR templates, like Federal Supply Schedules, federal data sources, internet searches, and industry lists. 

Keep in mind there are other ways to conduct market research as well, so you may wish to expand your techniques to activities like pre-solicitation conferences or outreach to the Small Business Administration. Your local Procurement Technology Assistance Center is another resource that doesn’t always get the attention it deserves.

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Commercial Item Determination

If you don’t already know your items are non-commercial, there’s a pretty good chance you’re buying commercial items. But you still need to document why it qualifies as a commercial item based on which part of the FAR definition it checks off. If you aren’t sure, call a couple of vendors and ask them whether the items in question are sold, leased, or licensed to the public. If they are, you may confirm they are “Items of a type customarily available in the commercial marketplace.” 

Each GovShop supplier profile has contact information for the supplier, making it easy for you to call or email to get this question answered.

Determining Whether to Set-Aside

This is a major part of market research, with socioeconomic goals taking on more and more importance in federal contracting. Some agencies, like Department of Veterans Affairs, have a mandate to set-aside contracts for veteran-owned small businesses whenever two or more responsible firms are found during market research.

If you’re working on a major procurement, chances are you’ve already had a meeting with someone from your Office of Small and Disadvantaged Business Utilization (OSDBU). They are going to want to know how the market breaks down, and prior to GovShop, this usually meant releasing an RFI. While we don’t discourage the use of RFI’s in general, we do want to call out the economic and opportunity costs that suppliers bear when responding to them.

Do you really want to burden small businesses with the costs of responding to an RFI just to find out if there are two or more socioeconomic concerns for your set-aside determination? We hope your answer is no, but just in case it isn’t, we’ve got good news! GovShop’s Market Summary Report makes it really easy to determine socioeconomic demographics within a given market. 

GovShop Market Summary Report
With GovShop’s Search & Filter commands, you can create a Market Summary Report to support the findings of your market analysis.

Every Market Summary Report includes essential information like the ratio of small to other than small businesses, the breakdown of small businesses that also qualify as a socioeconomic business concern, ownership statistics, average annual revenue, and the types of suppliers (e.g., manufacturers, resellers, service providers, etc) that comprise your selection.

Save the vendor community (and yourself) time and effort by using this Summary Report in lieu of an RFI if you can help it. You can even email specific profiles to your colleagues in OSDBU using GovShop’s Supplier Profile Sharing feature!

The Independent Government Cost Estimate (IGCE)

Every solicitation needs one, and they are always easier said than created. As our friend Dave Zvenyach wrote in his blog post on pricing market research, determining anticipated costs is “one of the more inside-baseball parts of government contracting.” Fortunately, there are some useful tools you and your program can leverage to estimate a fair market price for your IGCE. 

  • The Contract-Awarded Labor Categories (CALC) tool is a user-friendly database where you can search awarded ceiling rates for labor categories on the GSA schedule
  • USA Spending, which gets its data from the Federal Procurement Data System, is useful for finding the total price of a contract award (you’ll have to do some digging to figure out what was purchased, perhaps by trying to find the Product Service Code or NAICS code in the FPDS record or using one of the techniques described in Dave’s aforementioned blog)
  • Looking at established list prices like GSA’s eLibrary or GSA Advantage, where you can find labor rates and product price-lists

Another good technique? Actually conducting pre-solicitation communications with vendors. It’s true! Tell them about what you’re buying, and they can help you understand the cost drivers, implications, and other levers that will impact the awarded price. What an amazing time to be alive.

Making Your Recommendation

This is your chance to really put on your trusted business advisor hat, as most MRRs conclude with a recommended acquisition strategy. Market availability is a big factor in determining the strategy. If there’s a lot of vendors in the market capable of submitting responsive proposals, your job just got easier. Instead of spending time priming the market to encourage proposal submissions, you can focus on designing your solicitation and crafting a rock-solid requirement.

If there doesn’t appear to be a big market, then you’ll be working the pre-solicitation communication lines on behalf of your customer so that when you do issue the solicitation, you’ll have confidence that quality proposals will be received. Ultimately, as we said at the beginning of this post, failing to conduct market research will just cause you pain and suffering down the road, as you won’t have a strong and informed foundation upon which to develop a viable acquisition strategy. 

Supporting Documentation

Just like when you were in school, you need to show your work to support the findings produced by your market research. As mentioned, GovShop’s Market Summary Report and Export feature are great resources to attach to your MRR, and you barely have to touch a keyboard to create them! 

We’ve got an entire YouTube playlist dedicated to helping you use GovShop. Take some time to explore these features and you’ll be banging out high quality MRRs that create optimal outcomes for your customers with minimal pain and suffering!

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