A market study (also known as market analysis, market assessment, market sounding, market research, etc.) is useful when defining requirements; preparing budgets; choosing procurement method; planning and scheduling the procurement of goods, services and works; evaluation of bids/proposal, and sometimes to justify contract amendments.
The extent of a market study is dependent on, and determined by, the degree of complexity and monetary value of the requirement.
A market study can be done using the internet and/or by soliciting information potential suppliers, consultants or service providers. It can be done in-house, or by hiring a specialized firm to carry-out the study.
The minimum expected results of a market study are: the identification, interest and availability of suppliers, contractor or services providers, their technical capability and financial capacity, and price trends.
It is very useful to develop a template for recording and filing the results of a market study, and for future use when procuring similar goods, services or works from similar market.
The following are useful sources of information on Market Study:
Template for Market Study Report, OECD Procurement Toolbox
Supply Market Analysis, courtesy of the Scottish Government