Market Study in Public Procurement

When the word ‘procurement’ is mentioned, it is often in the context of the actual procurement process wherein two parties are doing an exchange. In this exchange, a party trades a contract or payment for actual product, service or work of another party. This context shows the two main players are actively participating – the business providing the service or product and the entity that needs it

Before the actual exchange occurs, there are some steps that have been taken by both parties. Prior to the actual procurement process, an entity that does procurement or receiving from available businesses will conduct a market study for its own protection and benefit.

A market study is known by many other names. It is also called, market analysis, market research, market assessment and other related names. As the name implies, it is a document that contains valuable information about a certain market or anything related to a market. Doing a market research is important because the information collected will be used for making decision in many areas like defining requirements, making budgets, picking the best procurement method, organizing and scheduling of the procurement process (applicable to goods, services and works).The document is also very informative when the organization does evaluation of proposals or bids. Sometimes the document is also used as a proof or justification why a business is chosen or why an existing contract has to be amended.

Another element that can be covered by a market study is risk assessment in choosing products or suppliers. Depending on the study’s purpose, the analysis can also carry some information about solutions to possible risks.

Information included in a market study would include market s...

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...ms of product and supplier. Information can include past and present tenders as well as names of businesses that provided the same or identical need before.

A collection of information regarding different suppliers can help in determining the best supplier or make a shortlist for a particular product or service. Retrieving information from a database is also easier rather than researching on a complete business profile. Information can also be easily updated and compared if need be.

Government procurement offices follow a standardized template for a market study for three important reasons: easy transfer and sharing of information, a good practice in market studies, and to serve as guide material in training.

Using these methods, getting information and making that market study is more streamlined compared to the traditional way of doing market research.