CONDUCTING MARKET RESEARCH
- What is market research, and why is it important? How are market data classified?
- How does the COR perform market research?
- COORDINATING FUNDING INFORMATION
- How does the COR coordinate funding information with the contracting office before solicitation to determine if funds are available for the government to enter into a contract?
What is market research, and why is it important? How are market data classified?
The COR needs to perform market research for all procurements to identify what products or services may be available to satisfy the government's needs and to obtain a greater understanding of the marketplace before he or she makes procurement-related decisions. The program office has overall responsibility for conducting market research that is focused on the technical aspects of the procurement. Usually the COR, assisted by other program personnel as necessary, needs to gather data early in the process, giving consideration to:
Data related to the competitive nature of the requirement.
For purposes of market research, historical data may include relevant acquisition histories and agency-wide past performance file data. In collecting historical data, the COR may find and include information on:
Current suppliers of the required products or services
Previous procurement strategies, acquisition plans, and lead times
Problems and issues in the award and administration of previous contracts
A contractor's past performance, including:
- Quality of products or services provided
- Timeliness of performance
- Cost control
- Past performance of key personnel.
Industry data or trends will affect how a requirements document or performance schedule may be developed for the procurement. The COR needs to gather and document data on the following industry developments and trends when compiling the work package:
The existence of new or upgraded products and services
The existence of products and services capable of being modified to meet government needs
Trends in technology, price, supply, and demand
Practices of commercial firms, including information on terms, conditions, the availability of buyer financing, maintenance of contract deliverables, and warranties
Production and delivery lead times
The availability of other qualified sources that can provide or offer:
- Commercial items
- Commercial practices that can be modified to fit the government's requirements
- Commercial items that can be modified to meet the government's needs (i.e., a nondevelopmental item; see Key Terms earlier in this chapter for further information)
- Better warranty, buyer financing, or discount terms
- Laws and regulations unique to the government's requirement
- Possible industry-wide provisions for distribution and support capabilities of local suppliers
- Information not generally available to the public.
How does the COR perform market research?
To collect market data, the COR may:
Contact commercial experts
Use other recent market research information
Consult the government-wide point of entry (GPE), fedbizopps .gov
Query databases or conduct on-line communication
Obtain source lists from other agencies or associations
Review company catalogs and product literature
Hold presolicitation conferences.
COORDINATING FUNDING INFORMATION
How does the COR coordinate funding information with the contracting office before solicitation to determine if funds are available for the government to enter into a contract?
The COR should coordinate funding information between the fiscal officer in the program office and the CO. These coordination duties include responding to any questions or providing missing or deficient information as required until the CO is satisfied that all issues related to contract funding have been resolved. The CO must be certain that adequate funding exists prior to awarding the contract. Specifically, these duties might include obtaining the independent government cost estimate (IGCE; see Question 72) from the project officer (or program manager); getting funding documents from the program fiscal officer, including applicable accounting and appropriation data; and forwarding all this information to the CO.
The program fiscal officer must commit (or reserve) funds in an amount determined by the IGCE (included in the work package) to ensure that adequate funds are available later when the CO obligates (or spends) the funds by signing the contract at the time of award. The COR may, of course, be required to coordinate adjustments in the funding if the original IGCE and the final award amount differ.
The COR should follow these steps to ensure that the funding process is properly executed:
1. Identify the type of funding to be provided and select the matching contract clause:
Multi-year (funding expires at the end of number of years specified, e.g., 5 years)
Annual (funding expires at the end of the year in which funds are appropriated)
No-year (generally used to refer to funds that have no expiration date specified).
2. Determine the date by which funds must be obligated; that is, determine when the funds will expire and if funds will be available prior to contract award.
3. Prior to initiating the procurement action, determine if the amount of funds provided is sufficient, based on the independent government cost estimate and the anticipated award amount.