Market sounding is a technique used to assess the reaction of the market to the proposed procurement activity and approach. It should be undertaken in conjunction with supply market analysis and brings early collective perspectives from suppliers. Market sounding is undertaken through direct communication with potential suppliers, whereas supply market analysis uses primary documentation and secondary sources to gain information. Market sounding should not be used as a substitute for supply market analysis.
Market sounding should lead to an understanding of the attitude, thoughts and likely response by the market as a whole to the proposed procurement activity, through discussions with multiple individual suppliers. It can make the procurement process more specific, accurate and efficient, as well as shorter.
Market sounding does not include elements of supplier selection or offer evaluation, nor does it create commitments of any kind on the part of the agency or agencies managing the project, or the suppliers involved. Market sounding can be particularly useful when:
- Doubt exists over the existence, capacity, capability, competitiveness or maturity of a market
- The project outcome sought or the procurement specifications are complex or innovative
- There is uncertainty over the level of supplier interest
- There is a need to manage market expectations.
A key aspect of market sounding is that it can assist procurement officers translate desired outcomes into a high-level statement of business requirement that is well aligned with the market, which makes it much more likely that the desired outcome will be achieved.