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Office of Acquisition and Logistics (OAL)
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Veterans First Contracting Program, 38 U.S.C. 8127 & 8128 Implementation Policy and Procedures »
38 U.S.C. 8127 Implementation Frequently Asked Questions Category 4
Office of Acquisition and Logistics (OAL)
38 U.S.C. 8127 Implementation Frequently Asked Questions Category 4
Categories: 1. Supreme Court of the United States (SCOTUS) Decision affecting the Veterans First Contracting Program | 2. VA Rule of Two |
3. VA Form 2268 | 4. Market Research | 5. Fair & Reasonable—Reasonable Expectation that Award can be Made at a Fair & Reasonable Price that Offers Best Value to the United States | 6. Sole Source | 7. General Services Administration (GSA)/Federal Supply Schedules (FSS) | 8. Other
Market Research
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What if there are two sources in the VIP database; however, the scope of what effort these entities have provided in the past and what the VA needs with the current requirement are different?
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How will market research be conducted for those orders issued by Ordering Officers who are outside of the contracting offices (example: Med/Surg PV and PPV and Subsistence NAC/Logistics Delegated Ordering Officers)?
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If a large number of SDVOSB or VOSB entities are identified in the VIP database, i.e., sometimes hundreds, is the contracting officer required to evaluate each firm until two more SDVOSBs or VOSBs are determined to be capable?
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Is cascading authorized?
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Will a new Market Research Report format/template be issued that addresses the requirements to comply with the 38 U.S.C. 8127 VA Rule of Two?
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Can the market research document be based on prior knowledge there is reasonable doubt that two or more verified SDVOSBs or VOSBs are capable of performing the requirement?
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In the market research phase should pricing be requested to determine whether the SDVOSBs or VOSBs can provide the VA with a fair and reasonable price or is this being documented after the solicitation is issued and quotes/proposals are being evaluated?
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If a search using the VIP database has identified two or more SDVOSBs for the requirement NAICS code, should market research be stopped at this point and be set-aside?
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What if VIP search resulted in two or more SDVOSB, and the CO posted sources sought notice on FBO, however, no SDVOSB or VOSB responded, do we still proceed to set-aside to SDVOSB/VOSB based on initial result thru VIP search?
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During market research, what is the appropriate number of days to request a response to a SDVOSB/VOSB sources sought once posted?
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When developing market research, can you ask for SDVOSBs and VOSBs in the same RFI and then make the decision to set-aside?
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What if the North American Industry Classification System (NAICS) size status of a vendor in the Vendor Information Pages (VIP) database and System for Award Management (SAM) conflict?
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Is there a method to determining availability of capable SDVOSBs/VOSBs without posting an RFI for each acquisition?
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If a VIP verified SDVOSB is large under a NAICS applicable to a specific acquisition, yet that vendor was awarded a relevant GSA schedule while it was small, can I rely on the size from the base GSA contract award and call them a capable source, or would I now need to reference the vendor's SAM and not use it as an eligible SDVOSB vendor for the purposes of determining sources and establishing strategy?
Sources that are verified in the VIP database then need to be determined capable of performing the work for the specific requirement. Contractors are not limited to being capable only for work previously performed for the VA. In this case described in the question, additional market research is needed in order to determine whether the identified entities are capable. Market research is required to be documented such that it supports the decision regarding whether two or more verified and capable SDVOSBs or VOSBs are likely to provide a fair and reasonable price providing best value to the Government.
The market research is conducted prior to establishing the contract and at the BPA level. Ordering Officers placing noncompetitive orders within established terms and conditions of the contract or BPA are not required to conduct further market research.
Generally with so many VIP verified SDVOSBs/VOSBs the acquisition would be set-aside unless there is reason to believe that at least two of these entities are not capable (e.g., recent similar requirement set-aside and no acceptable responses from VIP verified firms received).
Yes, see Procurement Policy Memorandum 2018-04, Guidance and Procedures regarding use of Tiered Evaluations (Cascading) for use in solicitations set-aside in accordance with the VA Rule of Two, dated 2/8/2019.
See the VA Market Research Guide for guidance.
PPM 2016-05, dated July 25, 2016, page 6, states market research is to be comprehensively documented in the contract file. “Prior knowledge” may provide information that can be included in the market research documentation; however, it must be conclusive. Note that FAR 10.002(b)(1) 
states, “The contracting officer may use market research conducted within 18 months before the award of any task or delivery order if the information is still current, accurate, and relevant.” Per FAR 10.002(e) , the results of market research are to be documented in a manner appropriate to the size and complexity of the acquisition. If prior market research is applicable, as long as it appropriately documents the specific acquisition and was obtained with the last 18 months, it can be used.
Pricing should not be requested during the market research phase. A fair and reasonable price determination at the proposal stage is different than at the “VA Rule of Two” set-aside determination stage. Properly conducted market research should determine if you have “a reasonable expectation” that two or more small business concerns owned and controlled by Veterans will submit offers and that the award can be made at a fair and reasonable price that offers best value to the United States.
“Reasonable expectation” can be ascertained by determining whether verified entities have successfully performed in the past same or similar requirements, whether established catalog pricing is available, etc. FAR 10.002(b)(2) provides a list of techniques for conducting market research that can assist in this effort.
The VIP only identifies verified SDVOSBs/VOSBs. Market research must also adequately document whether there is a reasonable expectation that “two or more small business concerns owned and controlled by Veterans will submit offers and that the award can be made at a fair and reasonable price that offers best value to the United States.” Therefore, additional market research, in addition to using the VIP must be conducted and documented.
Market research is required to be documented such that it supports the decision regarding whether two or more verified and capable SDVOSBs or VOSBs are likely to provide a fair and reasonable price providing best value to the Government. For the scenario described above, the market research must document the due diligence conducted to ensure the VIP verified entities are not interested in the requirement before a determination to not set-aside can be made.
The appropriate amount of time for responses to posted sources sought notices is at the contracting officer’s discretion. It is important that a sources sought notice provide clarity regarding the requirement, includes adequate time for responses, and does not require burdensome responses from interested parties.
Yes, you may ask for SDVOSBs and VOSBs in the same RFI. However, if the result of the market research is that there are two or more SDVOSBs the requirement must be set-aside for SDVOSBs.
The VIP NAICS codes are useful for purposes of market research. However, the official representation of business size is in SAM not VIP. To consider a VIP verified SDVOSB/VOSB under a particular NAICS code, contracting officers are to verify that the otherwise eligible firm has represented that it meets the size standard applicable to the NAICS code used for the specific acquisition via SAM or representation in the acquisition regardless of whether the NAICS is listed in the entity’s VIP profile. If the size conflict, the contractor must clarify and represent their current status for the particular procurement.
There are a number of ways capability can be determined, e.g., conducting industry days, reviewing websites, determining whether verified entities have successfully performed in the past same or similar requirements, etc. FAR 10.002(b)(2) provides a list of techniques for conducting market research that can assist in this effort.
The contracting officer must verify both VIP status and small business status of the firms at the order level. The official representation of business size is in SAM not VIP. To consider a VIP verified SDVOSB/VOSB under a particular NAICS code, contracting officers are to verify that the otherwise eligible firm has represented that it meets the size standard applicable to the NAICS code used for the specific acquisition via SAM or its representation in the acquisition regardless of whether the NAICS is listed in the entity’s VIP profile.