What is a market research report in federal contracting?
Federal agencies are required to conduct market research before issuing a solicitation, and the resulting market research report shapes how the procurement is structured — set-aside category, contract type, evaluation criteria, and even which vendors get invited to bid. Vendors can influence market research by responding to Sources Sought notices and RFIs.
FAR Part 10 requires federal agencies to conduct market research before initiating any acquisition. The purpose is to determine whether commercial items or non-developmental items can meet the need, identify small business capabilities, and understand market pricing and terms.
Market research report contents typically include: - Description of the government's requirement - Sources of information consulted (industry publications, previous market research, published prices, catalogs) - Companies contacted or that responded to Sources Sought notices - Assessment of whether commercial items are available to meet the need - Assessment of small business capability (used for set-aside decisions) - Assessment of appropriate contract type (fixed-price, cost-reimbursement, T&M) - Pricing information (published rates, catalog prices, historical prices) - Recommendation on how to structure the procurement
How vendors influence market research: - Respond to Sources Sought notices: these are FAR Part 10 market research tools. Even if you can't commit to bidding, responding tells the contracting officer your business exists and can perform the work. Sources Sought responses often shape whether the contract becomes a set-aside. - Respond to Requests for Information (RFI): similar to Sources Sought but often more detailed. RFI responses help shape technical requirements and evaluation criteria. - Participate in industry days: agencies often host industry-day events during market research where vendors present capabilities and ask questions about upcoming requirements. - Submit unsolicited capability statements: sending a two-page capability statement to a contracting officer's inbox before formal market research begins can put your business on their radar as a possible market research contact.
Why this matters for winning contracts: contracting officers who've heard from you during market research are far more likely to (1) structure the RFP in ways that fit your capabilities, (2) invite you to informal pre-proposal discussions, and (3) evaluate your eventual proposal favorably because they already know your background. Market research is the earliest and highest-leverage point of pursuit influence.
Common mistakes: - Only starting to pursue a contract after the RFP is released. By then, the requirement, contract type, evaluation criteria, and often the "informal favorite" are already established. Market research is the phase to influence, not the RFP response phase. - Treating Sources Sought as a bid request. Sources Sought is market research, not a solicitation. Don't submit pricing or full technical proposals in response. - Ignoring Sources Sought because "I'm not sure I can win." Even a losing response to Sources Sought builds relationship equity with the contracting officer and shapes the eventual RFP.