Market Research
Also known as: Sources sought, RFI phase, industry engagement
Your role here: Respond to sources-sought notices and RFIs to prove a capable small-business market
At a Glance
- Phase
- 2 of 10 — informs the set-aside decision
- Who leads it
- The contracting officer and program office, sometimes with a small-business specialist
- What happens
- The agency surveys industry to identify sources, pricing, and commercial solutions
- You…
- Respond to Sources Sought / RFI notices — this is where you make yourself count
- Governing authority
- FAR Part 10 — Market Research
What It Is
Market research is the process the government uses under FAR Part 10 to collect and analyze information about the capabilities in the market to satisfy an agency need. FAR 10.001 requires agencies to conduct market research appropriate to the circumstances before developing new requirements, before soliciting offers above the simplified acquisition threshold, and to inform the small-business and commercial-item decisions. It ranges from reviewing prior contracts, catalogs, and databases (like the Dynamic Small Business Search) to actively engaging industry through sources-sought notices, requests for information, industry days, and one-on-one meetings. The results feed two decisions that matter enormously to a small business: whether a commercial solution exists (which pushes the buy toward FAR Part 12 procedures) and — through the responses received — whether there is a reasonable expectation that two or more capable small businesses (or SDVOSBs, WOSBs, HUBZone, or 8(a) firms) will compete at a fair market price, which is the trigger for a set-aside under the rule of two.
What Happens
- The agency reviews existing data — prior awards, market prices, the Dynamic Small Business Search, and commercial catalogs.
- A sources-sought notice or RFI is posted to SAM.gov asking capable firms to identify themselves and describe their solution.
- Industry days and one-on-one sessions may be held to refine the requirement.
- Responses are analyzed to determine whether a set-aside is warranted and whether commercial-item procedures apply.
- The findings are documented and become the justification for the set-aside (or full-and-open) decision.
Key Activities
| Activity | What It Means |
|---|---|
| Post the Sources Sought / RFI | The government's public request for capability information. Your response is counted toward the rule of two — a strong reply can help tip a requirement into a set-aside. |
| Analyze small-business capability | The CO weighs whether enough capable, responsible small businesses exist. This is the factual basis for the rule-of-two determination in the next phase. |
| Assess commercial solutions | If commercial products or services can meet the need, the buy is likely to use streamlined FAR Part 12 commercial procedures. |
| Document the findings | Market research results are documented and support the acquisition strategy — including the set-aside decision, NAICS code, and estimated price. |
What It Means for an SDVOSB
Market research is the single most important phase for a small business, because your response to a sources-sought notice or RFI is literally part of the evidence the contracting officer uses to decide whether to set the buy aside. When you reply, do not just say you are interested — prove capability: cite directly relevant contracts (agency, scope, dollar value), confirm your SDVOSB certification and the applicable NAICS code and size status, and address the specific requirement. Two or more strong SDVOSB responses can convert a would-be full-and-open buy into an SDVOSB set-aside under the rule of two. Ignoring these notices is how firms let set-aside opportunities disappear before they ever become solicitations.
What to Do in This Phase
- Respond to every sources-sought notice and RFI in your NAICS codes, even when no award is on the table yet.
- Prove relevant capability — cite specific, similar contracts with agency, scope, and dollar value, not boilerplate.
- State your SDVOSB certification, UEI, NAICS code, and small-business size status clearly so the CO can count you.
- Where a set-aside is plausible, encourage other capable SDVOSBs to respond too — the rule of two needs at least two.
Watch Out For
- Treating sources-sought notices as junk mail — non-response is how a set-aside opportunity quietly becomes full-and-open.
- Vague responses that assert interest without demonstrating capability, which the CO cannot count toward the rule of two.
- Assuming market research is a commitment to buy — it is not a solicitation, and responding does not obligate either side.
Run the Numbers
Frequently Asked
What is the rule of two and how does market research support it?
The rule of two is the requirement that a contracting officer set an acquisition aside for small business (or a socioeconomic program like SDVOSB) when there is a reasonable expectation that offers will be received from at least two responsible small businesses of that type and that award will be made at a fair market price. Market research is how the CO builds that reasonable expectation: responses to sources-sought notices and RFIs, plus database and prior-award analysis, provide the evidence that two or more capable firms exist. That is why responding thoroughly to a sources-sought notice is one of the highest-leverage things an SDVOSB can do.
Do I have to respond to a sources-sought notice to bid later?
No — responding to a sources-sought notice or RFI is voluntary, and not responding does not bar you from bidding on the eventual solicitation. But it is strongly in your interest to respond. Your reply helps the agency decide whether to set the buy aside for SDVOSBs, gets your firm on the radar, and can shape the requirement in ways that fit your capabilities. Skipping the notice means giving up your voice in the set-aside decision while a competitor who does respond helps steer it.
Primary Sources
- FAR 10.001 — Policy (market research)
- FAR 10.002 — Procedures
- FAR 19.203 — Relationship among small business programs
Plain-English reference, not legal advice. The phases of a federal acquisition are tailored to each buy, and the FAR is amended from time to time — always read the actual solicitation and confirm the applicable procedures with the contracting officer, and consult qualified counsel for your specific situation before relying on this.
Change log (1)
- LaunchedPublished the federal acquisition lifecycle phases reference covering the ten phases a federal contract moves through — acquisition planning (FAR Subpart 7.1), market research (FAR Part 10), requirements definition (FAR Part 11 / 37.6), the set-aside decision and the rule of two (FAR Subpart 19.5 / 19.1405 / 19.1406), the synopsis and solicitation (FAR Part 5 / Parts 12–15), proposal preparation and submission (FAR 15.208), evaluation and source selection (FAR Subpart 15.3), award and debriefing (FAR Subpart 15.5 / Part 33), contract administration (FAR Part 42), and contract closeout (FAR Subpart 4.8) — each with an at-a-glance quick-facts card, a what-happens list, a key-activities table, an SDVOSB-specific angle, a what-to-do checklist, watch-outs, FAQPage, Article, Dataset, and BreadcrumbList structured data, primary-source FAR citations, and cross-links into the glossary, how-to guides, FAQ, solicitation types, source-selection methods, roles, forms, clauses, protest forums, and the set-aside eligibility, size-standard, win-probability, price-to-win, limitations-on-subcontracting, and subcontracting-goal calculators.