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HHS Small Business Program Policy Manual

Chapter 2: Acquisition Planning and Market Research

Topics in this Chapter:

  1. Acquisition Planning
  2. At or Below the Micro-Purchase Threshold
  3. Above the Micro-Purchase Threshold--Below the Simplified Acquisition Threshold
  4. Above the Simplified Acquisition Threshold
  5. Bundling
  6. Market Research
  7. Parity Rule

This part sets forth policy and procedure about HHS’ acquisition planning process. It expands on key aspects of the Federal Acquisition Regulations (FAR) and the U.S. Health and Human Services Acquisition Regulations (HHSAR).


Partnership amongst acquisition team members is integral to the acquisition process. Members of the acquisition team should be empowered to make decisions within their area of responsibility (FAR Subpart 1.102). The acquisition team should include the Program Officials, the Acquisition Officials, and Small Business Specialists. Small business considerations shall be part of the acquisition planning process.

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In accordance with FAR Subpart 2.101, it is the policy of the HHS to use small businesses to the maximum extent practicable for micro-purchases.  Follow the procedures prescribed in FAR Subpart 13.2 for methods to conduct procurement at or below the micro-purchase threshold.

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In accordance with FAR Subpart 13.003, every open market acquisition of supplies or services that has an anticipated dollar value exceeding the micro-purchase threshold but not over the Simplified Acquisition Threshold is reserved exclusively for small business concerns. Foreign purchases and purchases from required sources of supply such as Federal Prison Industries, Committee for Purchase from People Who Are Blind or Severely Disabled, Federal Supply Schedules and Government Printing Office and related supplies are exempt from this requirement. See FAR Subpart 13.3 for procedures.

If the Contracting Officer or Contracting Officer Technical Representative (hereafter referred to as CO) determines that there is not a reasonable expectation that quotations will be received from two or more responsible small business firms, the CO must include documentation to support the findings.  It is HHS’ policy to require the CO to obtain the Small Business Specialist (SBS) and Small Business Administration (SBA) Procurement Center Representative (PCR) concurrence with the findings prior to completing the purchase on an unrestricted basis.  Refer to FAR Subpart 19.502.

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Sources Sought notice is the most preferable method of market research for all acquisitions. It is used to determine whether the acquisition may be set aside for small business (e.g. SB, SDB, HUBZone and SDVOSB). It is HHS’ policy to conduct market research every 12 months.

Small Business Set-Aside is the preferred acquisition strategy for actions which exceed the Simplified Acquisition threshold when there is two or more responsible small business concerns that offer the product or services and the award will be made at a fair market price (FAR Subparts 6.203 and 19.502-2). This is also referred to as “the Rule of Two.”

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FAR Subparts 2.101 and 19.2 describes bundling as the consolidation of two or more existing contract actions (e.g. multiple award contract, task or delivery order, single award) already performed or could be performed by a small business concern into one contract action.  The CO should consider the following at least 30 days prior to the release of the solicitation when considering bundling requirements:

  • Consult with the HHS SBS and SBA PCR.  If a SBA PCR is not assigned to the procuring activity, the SBA Office of Government Contracting Area Office serving the area in which the procuring activity is located;
  • Notify all incumbent small business concerns that may be affected of the Government's intention to bundle the requirement;
  • Notify any affected incumbent small business concerns of how the concerns may contact the appropriate SBA representative; and
  • Provide the OSDBU with a justification for substantial bundling (FAR Part 19.202-1(e)(1)(iii)) (refer to FAR Part 7.107 for bundling justification requirements).

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Market research ensures fair opportunity to the small business community and best value in price and performance to the government. In accordance with FAR Part 10, market research shall be conducted on all new acquisitions and follow-on contracts if not conducted in the past 12 months.

HHS supports the posting of Sources Sought notices soliciting responses from qualified small business concerns for at least 15 calendar days. The 15-day response period provides adequate time for small businesses to respond thereby demonstrating maximum practicable effort to perform adequate market research.  It is also helpful to the small business community when contracting activities post Pre-Solicitation notices when it intends to issue a Sole Source.

HHS also encourages small business to consider joint ventures with other firms to pursue contracts. COs are encouraged to include this statement in Sources Sought notices and to give credence to responses with this feature.

The following resources are helpful for conducting market research:

System for Award Management (SAM) (formerly Central Contractor Registration (CCR))This is the Government’s primary repository for contractor information (FAR Part 4) (
Small Business Specialist (SBS)Consult with the Small Business Specialist supporting your contracting activity.  The Small Business Specialists contact information is located on the Office of Small and Disadvantaged Business Utilization (OSDBU website www.HHS.GOV/smallbusiness/.
Small Business Technical Advisors (IHS Only)Applicable to the Indian Health Service (IHS) only-the Small Business Technical Advisor (SBTA) may maintain current lists of small, women-owned, HUBZone, veteran-owned, service-disabled veteran-owned, and disadvantaged concerns, NAICS codes, and supplies/services.
Sources Sought NoticeAllows sources to briefly address capabilities specific to a requirement-A Sources Sought notice should encourage small businesses to respond.
Request for Information (RFI)Seeks current advice and information from the vendor community and other sources.
Source lists/solicitation mailing listContains suppliers, size standards, NAICS codes, and supplies/services
HUBZone Gateway
Dynamic Small Business Search Site
Vetbiz (SDVOSB search engine)
Federal Procurement Date System-Next Generation (FPDS-NG)You may generate reports to identify small businesses currently performing under government contracts (
Government Contracting OfficialsMay provide information regarding possible sources.
Contract office filesThese files may contain historical data and a reasonable number of small business sources.
AdvertisementsIdentify the specific needs to draw the sources that will meet the government’s needs.
SynopsesA notice in FEDBizOpps may locate new and/or additional sources that meet the government’s needs
NIH Electronic Portals In CommerceNIH maintains an internal electronic vendor source library
Trade AssociationsMay provide new and/or additional sources
Outreach ActivitiesMeet small business owners and representatives at small business trade fairs and procurement conferences and industry days.

When soliciting small businesses, review the following recommendations to ensure sufficient market research:

  • Include statement requesting responses from qualified small businesses.
  • Include language encouraging small businesses to participate in teaming or joint venture arrangements.
  • Provide adequate time to receive responses.
  • Confirm with Program Officials that minimum or mandatory requirements are necessary as some requirements can be unnecessarily exhaustive.
  • Include a draft Statement of Work (SOW), Statement of Objective (SOO) or Performance Work Statement (PWS) to provide understanding of the complexity of the requirement.  Do not include limiting language (e.g., 20 years of experience or specific OPDIV or program experience).
  • Provide a page limitation for responses.  For example, limit all capable sources’ response to 3-5 pages.

Recommended timelines for Sources Sought Notice posting:

  • Below the Simplified Acquisition Threshold (SAT) – seven (7) calendar days
  • Over the SAT – 15 calendar days

The CO should consider what is reasonable regarding the posting time.  If necessary, increase the number of days to allow time to address the complexity of a requirement. 

In addition, consider the following when reviewing the responses to Source Sought Notices:

  • Review the recommendations to ensure accurate market research analysis.
  • Review but do not evaluate capability statements.

Do not cross-compare capability statements from different businesses.

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In accordance with the Small Business Jobs and Credit Act of 2010 (H.R. 5297), 8(a) Program, Historically Underutilized Business Zone (HUBZone), woman owned (WOSB) and the service disabled veteran owned (SDVOSB) small businesses have equal standing.  The CO should make every effort to consult with the SBS when a full or partial small business set aside is considered. The CO should also take into consideration its Operating Division’s (OPDIV) current small business goal achievement for the fiscal year.

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Content created by Assist. Sec./Financial Resources - Small/Disadvantaged Business
Content last reviewed on July 25, 2014