Market Research Obligations: Looking Beyond FAR Part 10 Revisions

Jun 5, 2025Michelle Bovy

By Marcos Gonzalez | May 29, 2025
GovSpring Legal Access website

Have questions about navigating these significant FAR changes? Feel free to get in touch for additional information. Contact the managing partner at marcos@govspringlegal.com or at (202) 609-7501, and follow GovSpring Legal on LinkedIn.

As we have written about previously, the FAR rewrite (“FAR 2.0” or “Revolutionary FAR overhaul”) is underway, and the federal procurement landscape is currently undergoing significant transformation. On April 15, 2025, the Trump administration issued Executive Order 14275, “Restoring Common Sense to Federal Procurement,” directing a comprehensive rewrite of the Federal Acquisition Regulation (FAR). The stated goal is to reduce unnecessary regulatory complexities. The Office of Federal Procurement Policy (OFPP) has been tasked to lead this rewrite in coordination with members of the FAR Council. A key directive of this initiative is to emphasize the statutory basis of the regulations and to relocate non-statutory material to “buying guides.” This change intends for material in buying guides to function similarly to informal agency guidance—offering direction to procurement personnel without being legally binding on the parties. Collectively, these updated guides and the revised FAR will be known as the “Strategic Acquisition Guidance.”^[1]

As part of this broader effort, the OFPP and the FAR Council recently released model deviation text for FAR Part 10, which specifically addresses Market Research. Several commentators have provided an outline of the changes and omissions, but I thought it was important to note that rules governing market research extend well beyond FAR Part 10 into the following parts of the FAR:

Competitive requirements (Part 6)
Procurement planning (Part 7)
Required Sources of Supplies/Services (Part 8)
Determining agency needs (Part 9)
Commercial Products and Services (Part 12)
Types of Contracts (Part 16), and
Small Business Programs (Part 19)

It is worth reviewing how market research appears in these sections of the FAR, since omissions from the new regulations may give rise to the belief that some statutorily required provisions mandating market research have been omitted from the updated model deviation. In fact, Part 10 largely repeats more specific guidance for market research throughout the FAR.

Market Research: A Foundational Element Extending Beyond FAR Part 10

Market research principles and requirements are not confined to FAR Part 10. Instead, they are deeply embedded across numerous other sections of the FAR. Therefore, a comprehensive understanding of market research obligations necessitates familiarity with the policies that the obligations in Part 10 are intended to advance, particularly as other parts of the FAR undergo substantial overhaul. The rewrite’s emphasis on statutory roots is particularly relevant here, as many market research requirements throughout the FAR originate from statute and are critical for compliant and effective agency procurement.

The Integral Role of Market Research in Procurement Planning: Defining Needs, Ensuring Competition, and Meeting Commercial Preferences

Market research plays an integral role in several procurement contexts, and is of key importance for an agency’s statutory compliance and strategic acquisition planning. Effective procurement begins with thorough planning, where market research plays a foundational statutory role. Statutory requirements for procurement planning, outlined in 41 U.S.C. § 3306 (“Planning and Solicitation Requirements”), mandate market research for several key activities:

Advance Procurement Planning and Market Research: Executive agencies are required to conduct market research to prepare for the procurement of property or services. This research is aimed at achieving full and open competition and ensuring that specifications align with the nature of the property or services to be acquired.[2]
Development of Specifications: Agencies must develop specifications based on market research to permit full and open competition, with restrictive provisions included only when necessary to meet agency needs or as authorized by law.[3]
Types of Specifications: The nature of specifications—whether stated in terms of function, performance, or design requirements—should be determined based on agency needs and the market available to satisfy those needs, as identified through market research.[4]

The FAR incorporates the requirement that agencies determine their needs based on the use of market research.[5] This is relevant when challenging an agency’s purported need at the pre-award stage. For example, if an agency does not conduct adequate market research to define its requirements in terms of functions to be performed, performance required, or essential physical characteristics, it may be vulnerable to a bid protest.[6]

Consolidation and Bundling of Requirements

Market research is also critical if an agency decides to consolidate or bundle contract requirements. The Small Business Act requires that agencies avoid unnecessary bundling of contract requirements (i.e., grouping procurements that could be conducted separately into one), as doing so creates barriers to small business participation.[7] As part of its procurement plan, an agency is required to conduct market research to justify a decision to consolidate two or more requirements. FAR 7.107-2 (Consolidation) and FAR 7.107-3 (Bundling) explicitly require that market research be conducted to meet this statutory obligation.

The previous provisions of FAR Part 10 addressed the requirement to conduct market research on acquisitions that could lead to consolidation or bundling, citing sections of the Small Business Act (15 U.S.C. 644(e)(2)(A) and 15 U.S.C. 657q). The new model deviation text for Part 10 appears to dispense entirely with these specific provisions, suggesting these topics may now be primarily addressed in FAR Part 7 or elsewhere.

Ensuring Competition: Justifying Exceptions and Source Selection

Market research is indispensable for upholding and implementing federal competition requirements. FAR Part 6 outlines competition requirements applicable to federal procurements, and FAR Part 8 addresses Required Sources of Supplies and Services; market research is fundamental to both. In the case of required sources, market research plays a key role in determining whether a mandatory source—agency inventories, Federal Prison Industries, or a small business, for example—is available for supplies.

Regarding the statutory requirement for full-and-open competition (10 U.S.C. § 3201 & 41 U.S.C. § 3301), the FAR has several exceptions that require justification through market research. The use of market research in this area accomplishes several objectives, including:

Determining whether full and open competition is feasible.[8]
For Blanket Purchase Agreements (BPAs), determining whether the use of brand name items is essential because other companies’ products cannot meet the agency’s needs.[9]
Providing justification for the use of BPAs that exceed the simplified acquisition threshold.[10]
Supporting the decision to purchase from Federal Prison Industries (FPI), which requires market research to determine if the FPI item is comparable to supplies available from the private sector that “best meet the Government’s needs in terms of price, quality, and time of delivery.”[11] If the FPI item is not comparable, competitive procedures or alternative purchasing requirements may be necessary.
For orders under Indefinite Delivery Indefinite Quantity (IDIQ) contracts, specifying a brand-name item requires market research to determine that “a particular brand-name, product, or feature is essential to the Government’s requirements, and that market research indicates other companies’ similar products, or products lacking the particular feature, do not meet, or cannot be modified to meet, the agency’s needs.”[12]

Commercial Items: Prioritizing Existing Market Solutions (FAR Part 12)

There is a significant statutory preference for the procurement of commercial items, a preference that has seen increased emphasis and is central to the FAR rewrite’s focus on statutory rules. This preference has its source in the Federal Acquisition Streamlining Act (FASA).[13] Market research is essential to implementing this preference, though requirements vary slightly between Department of Defense (DoD) and civilian agencies.

DoD Requirements (10 U.S.C. § 3453):

DoD agencies must conduct market research before developing new specifications, soliciting bids/proposals for contracts exceeding the simplified acquisition threshold (SAT), or awarding task/delivery orders above the SAT.[14] This research should identify commercial services, products, or nondevelopmental items that meet or could be modified to meet agency requirements.
Agencies should request only the minimum necessary information from potential sources for these determinations.[15]
Market research results must be documented appropriately based on the acquisition’s size and complexity.[16]
Prime contractors handling contracts over $5,000,000 for non-commercial products or services are also required to conduct market research, for instance, to identify if commercial or nondevelopmental items could meet agency requirements.[17]
The DoD must conduct market research to assess the reasonableness of prices for commercial products or services in bids or offers.[18]
The Secretary of Defense must provide mandatory training for personnel responsible for market research, covering comprehensive information, best practices, and standardization methodologies.[19].

Civilian Agency Requirements:
Statutory requirements for civilian agencies are substantially similar to 10 U.S.C. § 3453, with some exceptions. Prime contractors are not explicitly required by this statute to conduct market research for civilian agency contracts, in addition to the following variations:

There is no direct statutory counterpart for civilian agencies mandating market research for price reasonableness analysis of commercial items, nor is there a mandate for specific market research training for their procurement personnel akin to the DoD’s.
Civilian agencies must conduct market research appropriate to the circumstances: (A) before developing new specifications for a procurement; (B) before soliciting bids or proposals for a contract exceeding the SAT. Unlike DoD, the statute does not explicitly require this before awarding a task or delivery order over the SAT for civilian agencies.

FAR 12.101 requires civilian agencies to “[c]onduct market research to determine whether commercial products, commercial services, or nondevelopmental items are available that could meet the agency’s requirements.” This market research must describe the agency’s needs in “sufficient detail for potential offerors of commercial products or commercial services to know which commercial products or commercial services may be suitable.”[20] Failure to conduct adequate market research in this context can have significant consequences; for instance, if an agency fails to conduct adequate market research, its award decision can be overturned. A notable example occurred in 2018 when the Federal Circuit sided with Palantir in a challenge to the Army’s determination—based on its market research—that its needs could not be met by a commercial product.[21]

Requirements to utilize market research to determine if existing commercial products and services could meet a requirement appear in both old and new versions of FAR Part 10. More specific guidance on market research suitable for commercial items may be retained in FAR Part 12. These provisions include:

In some circumstances, a civilian agency may require contractors to demonstrate commercial market acceptance (as required by 41 U.S.C. § 3307), and the use of certain solicitation criteria must be supported by market research.[22]
When utilizing a time-and-materials or labor-hour contract to acquire a commercial service, the agency must issue a determination and findings (D&F) stating that no other contract type authorized under FAR Part 12 can satisfy the requirement; this D&F must include a description of the market research conducted.[23]
While commercial contracts should generally only include standard commercial terms from FAR 52.212-1 and 52.212-4, agencies may “tailor” certain provisions and clauses after conducting market research to determine that such tailoring is justified by “variations in commercial practices and the relative volume of the Government’s acquisitions in the specific market.”[24] If the tailoring is inconsistent with customary commercial practice, the agency must obtain a waiver.[25]

Small Business Set-Asides (FAR Part 19)

Market research also plays a critical role in an agency’s decision to set aside a procurement for small businesses. As a general rule, all procurements above the micro-purchase threshold and below the SAT must be set aside for small businesses “unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of fair market prices, quality, and delivery.”[26] To make this determination, the agency may use market research, among other tools.[27] If that research reveals that there are not two or more responsible small business contractors capable of satisfying the need, or if their proposals are uncompetitive in terms of fair market prices, quality, and delivery, then market research may support a determination that a total set-aside is not appropriate. The results of such market research will also form the basis of an agency’s decision to make a partial set-aside under FAR 19.502-3 or -4, either of which will require that market research show that a total set-aside is not appropriate.

Buy American Act: Verifying Domestic Availability (FAR Part 25)

Market research is also employed in determinations related to the Buy American Act. The FAR includes a list of items that are presumed not to be made in sufficient quantities domestically to qualify for a domestic preference. The use of foreign-made products can be justified if, for any given product, domestic sources “can only meet 50 percent or less of total U.S. Government and nongovernment demand.”[28] The FAR currently requires market research to confirm the non-existence of domestic suppliers for such determinations.
An update to the FAR[29], scheduled to go into effect in June 2025, increases the requirements for market research in the following ways:

Market Research Before Acquisition: FAR 25.103(b)(1)(ii) will mandate that before acquiring an article listed as nonavailable, the procuring agency must conduct market research appropriate to the circumstances, including actively seeking domestic sources.
Economic Analysis and Market Research for List Updates: Required economic analysis of relevant markets and available market research must be conducted before making changes to the list of nonavailable articles at FAR 25.104(a).[30]
Individual Waivers and Market Research: Agencies may use individualized waivers for articles removed from the nonavailable list. These waivers will require centralized management and public posting, which should encourage ongoing market research and engagement with industry.
Transparency and Sharing of Market Research: Centralized review and posting of waivers are intended to allow agencies and the Made in America Office (MIAO) to share market research information, identify domestic sources, and send clear demand signals to industry about the Federal Government’s interest in reducing reliance on foreign-made items.

This final rule is scheduled to go into effect on June 11, 2025, although the pending FAR rewrite of Part 25 may result in substantial changes to the use of market research in this context.

Specific Changes to FAR Part 10: The Model Deviation Text

Against this backdrop of widespread and diverse market research requirements found throughout the FAR, the recently released model deviation text for FAR Part 10 introduces specific refinements. According to the FAR Overhaul page’s “Change Summary,” these key changes include:

The FAR will no longer list specific market research considerations or techniques within Part 10 itself.
Compliance with the Competition in Contracting Act (CICA) may still independently mandate market research.
The changes aim to remove duplicate and discretionary guidance from Part 10.
The clause at FAR 52.210-1, Market Research, is still required in solicitations for noncommercial items expected to exceed $6 million.

The statutory requirements cited as underpinning these changes to FAR Part 10 are repeated in specific portions of the FAR relevant to them. In other words, the reform effort effectively de-duplicates specific provisions regarding market research that have their origin in more specific provisions of the FAR outlined above. Without knowledge of those provisions, it may appear that the reform effort has cut several statutory requirements.

Conclusion: A Holistic View of Market Research Obligations
The ongoing rewrite of FAR Part 10 aims to streamline specific aspects of market research guidance. However, the fundamental obligation to conduct thorough and appropriate market research remains a pervasive and critical element of federal procurement. This responsibility is woven throughout numerous FAR parts, reflecting deep statutory roots and supporting a wide array of procurement decisions—from initial planning and ensuring competition to promoting commercial item acquisition and supporting small business programs.
Therefore, procurement professionals and other stakeholders must look beyond the revisions to Part 10 to grasp the full spectrum of their market research responsibilities. A holistic understanding of these widespread requirements is essential for ensuring statutory compliance, making sound acquisition strategy decisions, and navigating the evolving regulatory landscape effectively, especially during this period of comprehensive FAR overhaul.

[1] Office of Mgmt. ? & Budget, Exec. ? Office of the President, Memorandum M-25-26, Overhauling the Federal Acquisition Regulation (May 2, 2025). ?
[2] 41 U.S.C. §3306(a)(1)(B)
[3] 41 U.S.C. §3306(a)(2)
[4] 41 U.S.C. §3306(a)(3)
[5] FAR 11.002(a)(1)
[6] FAR 11.002(a)(2)(A)
[7] 15 U.S.C. 644(e)(2)(A) and 15 U.S.C. 657q
[8] FAR 6.302-7(c)(8)
[9] FAR 8.405-6(c)(2)(vi)
[10] FAR 8.405-6(c)(2)(vi)
[11] FAR 8.602(a)(1)
[12] FAR 16.505(a)(4)(i)
[13] Federal Acquisition Streamlining Act of 1994, Pub. L. No. 103-355, 108 Stat. 3243
[14] 10 U.S.C. § 3453(c)(1)
[15] 10 U.S.C. § 3453(c)(3)
[16] 10 U.S.C. § 3453(c)(4)
[17] 10 U.S.C. § 3453(c)(5)
[18] 10 U.S.C. § 3453(d)
[19] 10 U.S.C. § 3453(e)
[20] FAR 12.202(b)
[21] Palantir USG, Inc. v. United States, 904 F.3d 980, 991 (Fed. Cir. 2018)
[22] FAR 11.103(c)
[23] FAR 12.207(b)(2)
[24] FAR 12.203(a)
[25] FAR 12.302(c)
[26] FAR 19.502-2(a)
[27] FAR 19.502-2
[28] FAR 25.103(b)(1)
[29] Office of Federal Procurement Policy, Department of Defense, General Services Administration, & National Aeronautics and Space Administration, Federal Acquisition Regulation: List of Domestically Nonavailable Articles, 48 C.F.R. § 25 (2025).
[30] Notably, this must be undertaken by the Director of the Office of Management and Budget (OMB), through the Administrator of the Office of Federal Procurement Policy, in consultation with the Secretary of Commerce and the Director of OMB’s Made in America Office (MIAO).