Overview
FAR Part 10 prescribes the policies and procedures for conducting market research to determine the most effective method for acquiring, distributing, and supporting supplies and services. Its primary objective is to ensure the government meets its needs through the most efficient means possible, with a strong statutory preference for commercial products, commercial services, and nondevelopmental items.
Key Rules
- Mandatory Timing: Market research must be conducted before developing new requirements, before soliciting offers for acquisitions exceeding the Simplified Acquisition Threshold (SAT), and before awarding certain task or delivery orders under IDIQ contracts.
- Commercial Preference: Agencies must use the results of market research to determine if commercial products or services are available, can be modified, or if the government's requirements can be adjusted to allow for a commercial solution.
- The "18-Month Rule": Contracting officers may use market research conducted within 18 months before the award of a task or delivery order, provided the information remains current, accurate, and relevant.
- Small Business & Bundling: Market research must be used to identify small business capabilities and to justify "bundling" or "consolidation" of requirements. If bundling is contemplated, the agency must consult with the Small Business Administration (SBA).
- Information Minimums: When engaging with industry, agencies are instructed to request only the minimum information necessary to avoid placing an undue burden on potential sources.
- Part 12 Applicability: If market research reveals that a commercial product or service can meet the government's needs, the contracting officer must use the procedures found in FAR Part 12 (Acquisition of Commercial Products and Commercial Services).
Responsibilities
- Agencies/Program Offices: Responsible for identifying legitimate needs, evaluating trade-offs, and stating requirements in terms that allow for effective market research. They must also document research results in a manner appropriate to the size and complexity of the acquisition.
- Contracting Officers (COs): Responsible for determining the extent of market research needed (based on complexity and value), deciding whether to use FAR Part 12 procedures, and notifying industry if Part 12 will not be used.
- Prime Contractors: Required to perform market research when a contract exceeds $7.5 million (for other than commercial products or services) to facilitate the acquisition of commercial items by subcontractors.
- SBA Procurement Center Representatives (PCRs): Must be consulted by the agency if the acquisition involves consolidation or bundling of requirements.
Practical Implications
- Requirement Refinement: Market research is not just a "check-the-box" activity; if research shows that no commercial products meet the current specs, the agency is legally encouraged to reevaluate and potentially restate its requirements to allow for commercial competition.
- Set-Aside Decisions: Market research serves as the evidentiary basis for "Rule of Two" determinations. If research shows two or more capable small businesses, the acquisition is typically set aside, significantly impacting the competitive landscape.
- Industry Engagement: For contractors, this part of the FAR authorizes and encourages "Industry Days," RFIs, and one-on-one meetings. Early engagement during the market research phase is the most effective time for a vendor to influence the government's technical requirements and acquisition strategy.
- Documentation Burden: For high-dollar or complex acquisitions, the government must produce a formal Market Research Report. Inadequate documentation here is a common vulnerability in pre-award protests regarding set-aside decisions or sole-source justifications.