Acquisition of Services

Each page in this pathway presents a wealth of curated knowledge from acquisition policies, guides, templates, training, reports, websites, case studies, and other resources. It also provides a framework for functional experts and practitioners across DoD to contribute to the collective knowledge base. This site aggregates official DoD policies, guides, references, and more.

DoD and Service policy is indicated by a BLUE vertical line.

Directly quoted material is preceeded with a link to the Reference Source.

Reference Source: Guidance from OUSD(A&S)
Based on DAU Service Acquisition Mall, Step 3, Jan 2020

The ultimate goal of market research is to help the acquisition team become informed consumers. To understand the cost drivers in providing the service, research what leverage the team may discover in the marketplace that could affect both the requirement and the business strategy. In short it helps the acquisition team optimize a strategy for meeting their requirement. Since market research should address both business and technical considerations of a requirement, it requires the active participation of all acquisition team members as appropriate.  Market research should be done before:

• Developing new requirements documents;
• Soliciting any offers over the simplified acquisition threshold (SAT);
• Soliciting offers under the SAT when adequate information is not available and cost to conduct the research is justified; and
• Soliciting offers for acquisitions that could lead to a bundled contract ( DFARS 210.001 ).

It is not unusual for the technical staff to conduct market research about marketplace offerings while the contracting staff conducts market research that focuses on industry practices and pricing. However, a better approach to conducting market research is for the entire acquisition team to be a part of the effort. This enables the members of the team to share in the understanding and knowledge of the marketplace and develop a common understanding of what features, schedules, terms and conditions are key for their project’s success.

The team should consider such factors as urgency, estimated dollar value, complexity, and past experience as a guideline for determining the amount of time and resources to invest in the effort. Don’t invest more resources (e.g., lead time, available personnel, and money) than are warranted by the potential benefits. In addition, when acquiring services under the SAT, conduct market research when adequate information is not available and the circumstances justify the cost of such research

Reference Source: Guidance from OUSD(A&S)
Based on DAU Service Acquisition Mall, Step 3, Jan 2020

Acquisition histories may not give the whole picture needed for planning a specific acquisition, particularly if commercial practices or technologies to deliver the service are changing rapidly. There may be times when this information is not adequate, such as first time purchases, rapidly changing technology, change in market capability, and no known sources. In determining and identifying the scope and extent of additional research needed, you should follow these steps:

• Review information already in hand (including your personal knowledge of the market from prior requirements and the findings of recent research on like requirements);
• Identify information deficiencies;
• Select sources of additional information; and
• Plan the collection of additional market information (i.e. when and how) during the acquisition planning, pre-solicitation, solicitation, and evaluation phases.

Reference Source: Guidance from OUSD(A&S)
Based on DAU Service Acquisition Mall, Step 3, Jan 2020

The reason it’s critical to conduct market research as the entire acquisition team is it makes it easier when each member of the team knows what his/her responsibility is during this step.

Determine who will do what and by when.

As the team begins making calls or visiting with providers, having a standard interview guide may help provide accuracy and consistency.

Try not to ask questions that will provide a “yes” or “no” response.

The interview guide should ask what experience they have in providing this service.

Reference Source: Guidance from OUSD(A&S)
Based on DAU Service Acquisition Mall, Step 3, Jan 2020

While many are familiar with examining private-sector sources and solutions as part of market research, looking to the public-sector is not as common a practice. Yet it makes a great deal of sense on several levels. First, there is an increased interest in cross-agency cooperation and collaboration. Second, agencies with similar needs may be able to provide lessons learned and best practices. So it is important for the acquisition team to talk to their counterparts in other agencies. Taking the time to do so may help avert problems that could otherwise arise in the acquisition. Other resources include state and local governments that are experienced in procuring certain services that have not been procured by the Federal Government.

3.4.1 Customers

A wealth of information can be obtained from customers of prospective contractors regarding:

• How well a contractor performs;
• Depth of competition;
• The reliability and quality of the product or service;
• The price they may have paid; and
• Delivery terms and conditions, and incentive provisions.

3.4.2 Consider One-on-One Meetings with Industry

One-on-one meetings with industry leaders are not only permissible (ref FAR15.201 (c)(4)) they are highly encouraged. Note that when market research is conducted before a solicitation or PWS is drafted, the rules are different. FAR 15.201 (f) states that general information about agency mission needs and future requirements may be disclosed at any time. As long as the requirements have not (or should not have) been defined, disclosure of procurement-sensitive information is not an issue.

Focus your market research on commercial and industry best practices, performance metrics and measurements, innovative delivery methods for the required services, and incentive programs that providers have found particularly effective. This type of research can expand the range of potential solutions, change the very nature of the acquisition, establish the performance-based approach, and represent the agency’s first step on the way to implementing an effective and meaningful “incentivized” business relationship with a contractor.

3.4.3 Look for Existing Contracts

A thorough review of acquisition histories on current or prior contracts for the same/similar items helps determine the type of market information needed for a particular acquisition. FAR part 10 describes techniques for conducting market research. This includes querying the Government wide database of contracts and other procurement instruments intended for use by multiple agencies available at https://www.contractdirectory.gov/contractdirectory/ and other Government and commercial databases that provide information relevant to agency acquisitions.

Reference Source: Guidance from OUSD(A&S)
Based on DAU Service Acquisition Mall, Step 3, Jan 2020

With regard to the more traditional private-sector market research, it is important to be knowledgeable about commercial offerings, capabilities, and practices before structuring the acquisition in any detail. In today’s marketplace it’s vital to understand how private sector buyers structure their requirements and business deals when buying similar services. Whether it’s facility management, food services, or consulting support, major companies buy most of the same services we do. Unlike the public sector, the private sector must sustain their competitive advantage through efficiencies. The more we understand how and why industry buys the way they do, the better we can be at creating innovative requirements packages and business solutions that will improve performance and reduce costs.

Traditional ways to identify who can deliver the required services are to issue “sources sought” notices at FedBizOps.gov, conduct “Industry Days,” issue requests for information, and hold pre-solicitation conferences. Also, consider reviewing current FedBizOps solicitations. It’s also okay to pick up the phone and call private-sector company representatives. Contact with vendors and suppliers, for purposes of market research, is encouraged, FAR 15.201 (a) specifically promotes the exchange of information “among all interested parties, from the earliest identification of a requirement through receipt of proposals.”

Once the solicitation has been issued and the procurement is underway, the treatment of potential offerors must be fair and impartial and the standards of procurement integrity ( FAR 3.104 ) must be maintained. So, the real key is to begin market research early before the procurement action is underway.

Reference Source: Guidance from OUSD(A&S)
Based on DAU Service Acquisition Mall, Step 3, Jan 2020

Once the market research is completed, it’s now time to analyze the information and data accumulated. This also is a task for the entire acquisition team. Some of the things to consider as market research is analyzed are what are the opportunities for competition and/or small business considerations? Did your market research reveal any new emerging technologies?

Sometimes market research can reveal things such as market trends (supply/demand) which can provide leverage during negotiations. Once the market research is analyzed, it’s time to document your findings.

Reference Source: Guidance from OUSD(A&S)
Based on DAU Service Acquisition Mall, Step 3, Jan 2020

The market research report is the document prepared after all information has been compiled. It provides a summary of the market research team’s activities and should provide a logical basis for supporting your business strategy such as a commercial service acquisition, full and open competition or small business set aside.

FAR 10.002(e) encourages agencies to document the results of market research in a manner appropriate to the size and complexity of the acquisition.The amount of research should be commensurate with the size, complexity and criticality of the acquisition. You should always check with your local agency for any additional requirements that may not be listed.

Your market research report can help build the business case for change in how you approach your requirement and support your decisions on an acquisition approach. Remember, it is easier to compile all the information gathered during your market research into one document that will be included in the contract file