03-17

Procurement Information Circular


September 2, 2003

MARKET RESEARCH ANALYSIS IN SUPPORT OF OPTION EXERCISES AND SOLE SOURCE CONTRACT ACTIONS

 

PURPOSE:To provide guidance and emphasis on the effective application of FAR Part 10 Market Research requirements when making option exercise and sole source award decisions.

 

BACKGROUND:The FAR, under Part 7, Acquisition Planning, Section 6.303, Justifications, and Section 17.207, Exercise of options, recognizes the benefits and importance of diligent acquisition management in the planning, award, and performance phases of the program or project life cycle.Market research is a key element in making informed option exercise and sole source award (initial contracts, follow-on contracts and contract modifications) decisions.

 

Market research activities include--

†† (a) Market surveillance, which is an ongoing process that includes all the activities technical and acquisition personnel perform continuously to keep themselves abreast of technology and product developments in their areas of expertise; and

†† (b) Market investigation, which involves comprehensive research, conducted in response to a specific need for an item of supply or service.

 

Increased effectiveness of program/project management decisions is one of the major benefits to be realized through the application of diligent market research efforts.Information gained through market research ensures that vital information on current market capabilities, including viable sources, or alternate technical, acquisition or management approaches is made available to decision-makers at all levels including acquisition team members (contracting officers and the program/project management representatives).

 

GUIDANCE:Options awarded and priced along with the basic contract are expected to offer the most efficient approach to accomplishing program/project requirements throughout the performance period(s) of the contract.Technical, engineering or scientific advances identified as a result of market research activities may require reassessment of the program/project, and the available course offered by the existing option exercise.NASA continues its full commitment to exercising existing options where existing options represent the best programmatic decision (price and other factors considered) for the Agency and its customers.

 

In those instances where contracts are assumed to be sole source (whether initial awards, follow-on awards to initial sole source awards, or follow-on awards to competitively awarded contracts), prior to making an award NASA is required to publicly announce its intentions to award a sole source contract.These intentions are based upon NASAís knowledge of market conditions and capabilities at the time of the announcement.While the regulatory guidance for the conduct of market research (FAR Part 10) is primarily focused on determining whether a commercial item or service will satisfy the Governmentís requirement, it also is a means to validate assumptions concerning the planned sole source approach or gain additional knowledge about feasible alternatives.Should market analyses indicate the existence of feasible alternative sources offering better technical and/or business approaches to meet programmatic requirements, the alternative sources should be investigated before going forward with the sole source award.†† As for option exercises, if the market research analyses conclude that the requirements available under the option exercise no longer offer the best path to success (due to advances in technology, science or business applications), the better decision may be to not exercise the option and pursue an alternate programmatic solution.The expectation is that agency personnel will use their expertise to survey the market and capitalize on those opportunities to achieve programmatic excellence.

 

As a means of balancing safety needs and concerns with the responsibility to explore market capabilities, acquisition teams are advised to utilize the resources available through the Centerís Systems Management Office (SMO) or the Headquarters Independent Program Assessment Office (IPAO).These resources may be utilized to assist in analyzing market research results such as assessing capability statements submitted by interested sources.Independent assessments offered by these resources are particularly useful when the acquisition team is of the opinion that safety concerns preclude any opportunity to seek alternate sources and/or alternate approaches.

 

The NFS will be updated to reflect improvements in the option exercise and sole source award processes.A noted change will be that the determinations supporting option exercise decisions, like sole source justifications, will reflect the input and agreement of program/project management in making option exercise decisions.Procurement Officers, and Program/Project Managers should ensure that contracting officers and technical acquisition team representatives receive sufficient levels of training in developing and applying effective market research techniques.

 

EFFECTIVE DATE:This PIC is effective as dated and shall remain in effect until canceled or superseded.

 

HEADQUARTERS CONTACT:Eugene Johnson, Code HS, (202) 358-4703, e-mail: ejohnson@hq.nasa.gov.

 

 

James A. Balinskas

Director, Contract Management Division