# DLAD PGI PART 10 – MARKET RESEARCH

- DLAD PGI PART 10 – MARKET RESEARCH

- PGI 10.002-90 Procedures

DLAD PGI PART 10 – MARKET RESEARCH

(Revised August 13, 2012 through PROCLTR 2012-46)

PGI 10.002-90 Procedures

(a) General.

(1) Market research to develop or enhance competition is normally conducted by contracting personnel, small business specialists, and local competition advocates, often with assistance from the local market research office, which supports the entire scope of local market research and analysis needs. Otherwise, assistance for specified market research may be requested from the DLA Office of Operations Research and Resource Analysis (DORRA), which has responsibility for providing such support.

(2) "Market research" in accordance with FAR Part 10, DFARS Part 210, and in this section includes, but is not limited to, joint efforts by:

(i) Technical personnel to accomplish research and analysis in connection with developing specifications and purchase descriptions, as well as to determine the availability of commercial products to meet the Government's functional requirements;

(ii) Supply personnel to identify techniques or actions to assure or enhance supply availability and the timing and quantities for economic purchases; and

(iii) Contracting, small business, and competition advocate personnel to research and develop sources (see also 6.3, 7.1, 12.1, 15.2, and 25.1).

(b) Considerations for performing market research.

(1) Buying activities may consider issues such as problems with customer wait time and/or pricing, dollar value, volume, and whether the required item or service is commercially available in structuring their approach to market research.

(2) To gain familiarity and knowledge of the most current capabilities of the domestic marketplace, buying activities shall conduct market research on an ongoing basis and to the extent practicable, to identify potential domestic sources for acquisitions to which DFARS 225.7002-2 and/or FAR 25.104, apply.

(3) Items which are designated as export controlled will be included and identified in the market research approach, since this impacts the eligibility of potential vendors to have access to technical data.

(c) Small business set-asides.

(1) Market research in support of a bundling analysis is not required for procurements below the simplified acquisition threshold (SAT) unless it is determined that the procurement is not suitable for award to small business. Market research may, however, be required to make this determination.

(2) If market research is required, the market research requirement can generally be satisfied by:

(i) Identifying two or three small businesses that recently provided the item or service; or

(ii) If only one or no small business responded, contacting the small businesses who previously provided the item(s) to determine the reason for lack of response to the request for quotations.

(3) To determine whether there are two or more small businesses capable of performing the requirement, utilize the central contractor registration (CCR). Contracting officers who relied on SBA’s PRO-Net as the authoritative source for vendors certified in SBA's 8(a) business development program, HUBZone empowerment contracting program and small disadvantaged business program will now access this information through CCR.

(i) To conduct market research and confirm eligibility for SBA's procurement preference programs, go to the CCR web site at http://www.ccr.gov/ and use the "dynamic small business search" for options and information.

(ii) If this search fails to yield any small business sources, an analysis may need to be performed to determine whether the requirement is bundled or consolidated.

(4) For bundled acquisitions, the procuring activity must notify each affected small business concern pursuant to FAR 10.001(c)(2). This notification must be accomplished by separate written notification to each affected small business, that is, each small business that received an award the last time any portion of the now-combined requirement was procured, including procurements occurring during the planning for the current solicitation.

(d) Market research to determine a potential bundled or consolidated contract.

Market research must be performed before the contracting officer may proceed with an acquisition strategy that could lead to a bundled or consolidated contract. Market research must be conducted to determine whether the aggregation constitutes a bundled or consolidated procurement and, if it does, whether the consolidation of requirements is necessary and justified. See 7.107 and 7.170 for policy regarding bundling and consolidation.

(e) Commercial item determination.

(1) Market research must be used to determine whether an item or service meets the commercial item definition in FAR 2.101.

(i) Contracting offices shall include complete and adequate documentation of the market research and rationale supporting the commercial item determination within the contract file.

(ii) Market research may also be used in determining whether a customary commercial practice exists and whether a solicitation requirement is consistent with customary commercial practice.

(2) Market research for determining commerciality on a group basis.

(i) Buying activities should determine commerciality on a group basis whenever it is impractical to conduct individual reviews, such as when a large number of items or services will be included on a solicitation.

(ii) Buying activities should conduct commerciality reviews on a group basis when possible to accelerate the pace at which items and services can be identified as commercial.

(iii) Buying activities should ensure that the results of market research efforts are entered into the material master classification or contracting technical data file, when utilized by the buying activity.

(iv) When possible, buying activities should identify logical groupings of items or services that can reasonably be presumed to be commercial or non-commercial and that can be identified in an automated system. Buying activities can then code those entire groups of items or services in the system without conducting an individual technical review. Groupings of items that could logically be presumed to be commercial are:

(A) Items or services that use industry standards;

(B) Items described by commercial item descriptions;

(C) Items with acquisition method suffix code (AMSC) “Z,” which includes commercial, non-developmental, and off-the-shelf items; and

(D) Federal stock classes (FSCs) that can reasonably be presumed to be commercial in their entirety.

(v) The contracting officer is responsible for making the final determination of commerciality and customary commercial practice for the item or service being acquired.

(f) Sampling in market research.

(1) Acquiring large populations of items on a single contract makes it impracticable to conduct a review of the results of market research for each individual item. As an alternative, buying activities can identify a sample of items that is representative of the requirement and only conduct market research and a review for each of the items in the sample.

(2) The sample size must be sufficient to achieve a 90% confidence level with a 10% error rate; consider using a statistical program such as EZ-Quant to compile the sample.

(g) Long term contract market research. For market research requirements related to establishing and maintaining long term contracts (LTCs), see 11.302.

(h) Market research and analysis involves acquiring information from various sources relevant and applicable to the procurement; examples of market research methods are listed in the following table.

Table 1. Market research methods.

- When conditions permit, publish a “sources sought” synopsis in the FedBizOpps. The time allotted for the synopsis shall be sufficient for potential sources to respond and the contracting officer to conduct follow-up actions. - Consider sponsoring a “domestic sourcing” conference, which will bring together customers, suppliers, industry groups/trade associations, and agency personnel to address the issues that are influencing the domestic nonavailability and explore ways to resolve these challenges. A special effort shall be made to ensure small businesses participate in such conferences. - Consider contacting other sources such as industry and trade associations and researching sources such as business and financial periodicals, trade publications, statistical and financial service reports such as Dun and Bradstreet or the Thomas Register, for information which includes: - Trends in technology, materials utilization, and industry practice including manufacturing processes, economic order quantities, production lead times, and channels of distribution; - Economic and price trends and conditions, market statistics and indicators, and major policies or seasonal considerations affecting supply, past demand analysis, future demand projections, and outlook for major product categories; - Compatibility with economic production runs, economic buys, industry capacity, and industry interest; - Industry marketing, commercial contracting, contract financing, and pricing practices; - Potential impact of the acquisition(s) on domestic and international markets; and - Impediments to effective competition.

(i) DOD guidance for performing market research is listed in Table 2.

Table 2. DOD market research guides.

Defense Standardization Program document SD-5, Market Research, http://dsp.dla.mil/ or https://assist.daps.dla.mil/quicksearch/basic_profile.cfm?ident_number=106786 Defense Acquisition University, continuous learning module CLC004,“Market Research,” http://www.dau.mil/clc/default.aspx Office of the Secretary of Defense for Acquisition, Technology and Logistics (Acquisition Initiatives), Commercial Item handbook, http://www.acq.osd.mil/dpap/Docs/cihandbooks.pdf Armed Services Pricing Manual, Volume II, Chapter 12, https://acc.dau.mil/CommunityBrowser.aspx?id=406579&lang=en-US