Market Research in Government Contracting

Market research in government contracting is the mandatory pre-solicitation process by which federal agencies gather data on available commercial solutions, industry capabilities, and pricing to inform their acquisition strategy and requirements documents.

What is Market Research in Government Contracting?

Under FAR Part 10, federal agencies are required to conduct market research before developing new requirements and before soliciting offers above the micro-purchase threshold. The goal is to determine whether commercial items or non-developmental items can satisfy the requirement, identify potential sources, and establish realistic price estimates.

Market research methods include:

• Sources sought notices: public postings on SAM.gov asking industry to identify their capabilities
• Requests for Information (RFI): structured questionnaires seeking technical or pricing information
• Industry days: government-hosted events where agencies brief industry on upcoming requirements
• One-on-one meetings: individual sessions between the agency and potential offerors (within procurement integrity rules)
• Market surveys: review of catalogs, websites, GSA schedules, and published price lists
• Database reviews: analysis of USAspending.gov data, FPDS, and GSA pricing databases
• Contact with other agencies: learning from agencies that have procured similar items

The results of market research must be documented and retained in the contract file. Market research findings directly inform the acquisition strategy, including the decision whether to set aside the procurement for small businesses and which contract vehicle to use.

Why Market Research matters for government contractors

Market research activities are among the highest-leverage opportunities for contractors to influence a procurement before the solicitation locks in requirements. A contractor who submits a detailed, well-reasoned RFI response showing deep technical understanding can shape the statement of work, evaluation criteria, and even the contract type. Agencies often incorporate specific language, requirements, or approaches they learned from strong RFI responses. Contractors who skip the RFI phase and wait for the RFP are competing on requirements they had no hand in shaping.

Example

The Department of Energy issues a sources sought notice for cloud migration services. A contractor responds with a detailed capability statement demonstrating their FedRAMP authorization, DoE-specific security experience, and a phased migration methodology. When the final RFP is released three months later, the statement of work reflects a phased approach and includes FedRAMP High as a minimum requirement, language that closely mirrors what the contractor proposed. The contractor's market research participation gave them a structural advantage entering the competition.

Frequently Asked Questions

Does responding to a sources sought or RFI hurt a contractor's chances?

No. Responding to a sources sought or RFI does not disqualify a contractor from later competing on the resulting solicitation. Market research participation is encouraged. The only restriction is that information shared during market research must stay within procurement integrity rules, agencies cannot give participating companies non-public solicitation information.

What happens if an agency skips market research?

Skipping required market research is a procurement deficiency that can be raised in a bid protest. Proper market research is particularly important for justifying a sole source award or determining whether small business set-asides are appropriate.

How is an RFI different from a sources sought?

Both are market research tools, but a sources sought notice is primarily asking "who can do this?" while an RFI is asking "what are your technical approaches and pricing?" Sources sought responses help the agency determine whether to set aside the procurement; RFI responses inform requirements development.

How long does the market research phase typically last?

Simple commercial purchases may involve just a few days of catalog review. Complex procurements may have an active market research phase lasting six to twelve months, with multiple RFIs and industry events before the solicitation is released.