Sole Source Justification Aggregated Retail Point of sale (FE).pdf

DEPARTMENT OF COMMERCE

SOLE SOURCE JUSTIFICATION

1. Requiring Activity: U.S. Census Bureau, Economic Indicator Division Contracting Activity: U.S. Census Bureau, Acquisition Division

2. Nature or description of the action:

This justification and approval sets forth the facts and approval for the award of a sole source contract to Nielsen Consumer LLC (NielsenIQ) to obtain real-time point-of-sale grocery and pharmacy sector data about individual retailers. The objective of this procurement is to improve the quality of Census Bureau retail data products while also reducing the burden to respondents.

3. Description of the supplies or services required to meet the agency's needs:

The United States Census Bureau (USCB) produces several data products for the retail economy. The Economic Census is conducted every five years and captures the most comprehensive store and product category level information of any Census survey instruments.

The Census collects data for each company at the store or location level. The results of the Economic Census are also the core of the sampling frame that many Census Economic Surveys are built upon. The Census Annual Retail Trade Survey is conducted every year and captures data at the company level and collects national sales, inventories, e-commerce, and expense data for sampled retailers. The Census Advanced Monthly Retail Trade Survey and the Census Monthly Retail Trade Survey are subsamples of the Annual Survey and produce timely retail estimates. The information collected in these surveys has a much more limited scope with focus on the national sales figure for both brick and mortar and e-commerce retailers. The Monthly State Retail Sales (MSRS) report provides modeled estimates of state-level retail sales on a monthly basis.

The retail economy is a dynamic one that is garnering great attention as it evolves to meet consumer’s changing needs and to adapt to emerging technologies. As a result, there is an increased interest in the Census Bureau’s retail data products. At the same time, however, response rates for Census surveys are declining due to respondent burden and increased protection of non-public company records. The 2022-2026 Department of Commerce Strategic Plan makes a commitment to reducing the burden of responding to surveys and leveraging non-traditional data sources.

The objective of this procurement is to continue to produce high quality official statistics while making use of a third-party data source that is collecting data that is comparable to what retailers would be providing on Census Bureau data collection instruments. In order to make use of third-party data that is comparable to data that would be collected via traditional data collection instruments for retail surveys and the Economic Census, the USCB needs a consistent store-level and detailed product category-level data source that covers a wide variety of retailers across geographies, size, and kind of retail business. For special projects including the MSRS, the USCB seeks to acquire aggregated point-of-sale and/or scanner commercial data sets for the retail industry that provide total brick-and-mortar and e-commerce sales by geography and by product category, as identified by the USCB, for curated groupings of retailers (i.e., from the dataset, the ability to tabulate total sales of Product X for grouping of store Y for in Geography Z should exist) on a weekly and/or monthly basis.

This specific requirement is for real-time point-of-sale grocery and pharmacy sector data about individual retailers at the detailed product category-level by NAICS (North American Industry Classification System) and NAPCS (North American Product Classification System). An Example of curated product data includes: Data set of product level detail by aggregated zip code data for all retailers (Store Level Database); Categories: Chicken Eggs, Cows Milk, RTE Cereal, Soft Drinks; Report Type: Item/UPC level report, by Value, Units, and Avg Unit Price as specified by the Census Bureau in groupings. Data should be provided from 2022-current, broken out by month.

All data requests must meet the requirements for quality, releasability, and disclosure. The USCB requires that third-party data source provides no information that would allow for the identification of individual purchasers or transactions.

4. Statutory Authority:

The statutory authority permitting other than full and open competition is Federal Acquisition Regulation (FAR) 13.5 in accordance with 41 U.S.C.1901 and in accordance with CAM

1306.70 Department of Commerce Competition Requirements

5. Demonstration that the proposed contractor's unique qualifications or the nature of the acquisition requires use of the authority cited:

In order to make use of third-party data that is comparable to data that would be collected via traditional data collection instruments for retail surveys and the Economic Census, the Census Bureau needs a consistent store-level and product-level data source that covers a wide variety of retailers across geographies, size, and kind of retail business. The Monthly Retail Trade Survey needs this data delivered within four weeks of month’s end. The product-level data must have detailed characteristics allowing it to be mapped to the NAICS in order to be used for Economic Census product estimates. Additionally, in order to allow for precise matching against the Economic Census database, the data source must be able to provide the retailer-assigned store number for each store location. The e-commerce retail channel is currently an important and evolving piece of the retail sector and the data source must provide brick and mortar and e-commerce breakouts for each retailer. In order to perform critical quality checks of the data against Census Bureau data, historical data for the retailers must be available.

NielsenIQ has proven to be the only company that offers the required detailed data for the grocery and pharmacy sectors that is customizable to meet the needs of the USCB within their existing dataset. Additionally, Nielsen IQ is the only company that can currently provide the required technically detailed categories and hierarchies that can be mapped to the NAICS for products that are critical for the creation of the Economic Directorate Programs.. For these reasons, NielsenIQ has proven to be the only organization that can provide the grocery and pharmacy data at the timing required (within 4-weeks of month end) by the Economic Indicator Programs.

http://uscode.house.gov/browse.xhtml;jsessionid=114A3287C7B3359E597506A31FC855B3

6. The Contracting Officer will determine cost to the Government fair and reasonable prior to award of the Order.

As required for the purchase under this Sole Source Justification, the Census Acquisition Division will issue a request for proposal to NielsenIQ. Prior to award, the Contracting Officer shall determine the anticipated cost to the Government will be fair and reasonable through a variety of methods, including comparison with prices of similar services in a related industry, and previous contracts. It is anticipated that the total price of the 4-year contract will not exceed $8,800,000.00.

7. A description of the market research conducted and the results, or a statement of the reason market research was not conducted:

Consistent with FAR Part 10, market research has been conducted for this procurement.

The 2022-2026 Department of Commerce Strategic Plan makes a commitment to reducing the burden of responding to surveys and leveraging non-traditional data sources. Over the past 10 years and in commitment to the Department’s Strategic Plan, the Economic Directorate has worked extensively with several retail third party data vendors to review, test, and purchase alternative data. To date, the Economic Directorate has used pilot programs to review the quality and required timeliness of the data for the Principal Federal Economic Indicators.

In some instances, the pilot programs moved forward into full contracts and integration of the third party data into the USCB’s Economic Programs. The Economic Directorate has done comprehensive market research of companies throughout the sector and data availability over the years. Those companies include IRI, ESRI, Accenture, FISERV, NielsenIQ, Circana (previously NPD) and Palantir.

The Economic Indicator Programs are continually involved with the market research industry.

Some of the ways that these Programs are constantly engaged with this market research industry include trade associations (International Council of Shopping Centers and National Federation of Retailers), trade shows (Retails Big Show, Shop Talk, and Grocery Expo), as data users, as data providers, and ongoing research projects to further expand upon the quality and timeliness of data that Census surveys provide. Part of the responsibilities in manager’s performance plans requires looking at outside sources for where information might be available. Therefore, the market research is an ever evolving and ongoing effort of the Program.

The trade shows and feedback from data users often provide the program with alternate sources of information that are further explored at that time. Since this data buy is supplemental to the data the USCB already collects, the program representatives are intimately engaged with this kind of data and research and have ample marketplace awareness as new or emerging non-traditional data sources enter the field.

The current requirement from the Economic Directorate is to expand Census use of alternative data to complete data gaps in pharmacy and grocery at the product, geographic and industry levels. For this specific requirement, it is critical that the vendor has the detailed level of data at the store and product level that aligns with NAICS and NAPCS. In addition, it needs to be available on the retail calendar and at a timing that is critical for the Economic Indicator Program.

A sources sought notice was published on SAM.gov and received no responses. Also, based on the Program’s ongoing marketplace analysis of data providers for the retail sector, the Market Research Team found that NielsenIQ is the only company that offers the very detailed data for the grocery and pharmacy sectors. The data from NielsenIQ at the store level can be customized to meet the needs of the USCB within their existing dataset. NielsenIQ can also provide the very detailed categories and hierarchies for products that are critical for the creation of the Economic Directorate Programs. Finally, NielsenIQ is the only organization that can provide the grocery and pharmacy data at the timing required by the Economic Indicator Programs.

Based on the above market research activities, the Census Bureau has concluded that only the NielsenIQ offers the required retailer transaction data to satisfy the requirements.

8. Any other facts supporting the use of other than full and open competition:

In accordance to 13 U.S.C § 6 - Census Organic Act - Information from Other Federal Departments and Agencies; Acquisition of Reports from Other Governmental and Private Sources, the Census Bureau has the authority to acquire the retail data directly from a source that has the data rather than incurring the expense of recreating or duplicating the information for the efficient and economical conduct of the census and survey provided for in this title.

9. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition:

No other sources expressed interest in this acquisition.

10. A statement of delivery requirements:

The attached Performance Work Statement (PWS) fully documents the details of this requirement. A PWS suitable for full and open competition has not been developed because the Census Bureau is aware of the required data which is not available in the marketplace. The data source must be acquired from NielsenIQ, as they have the unique ability to provide data-sets in the required timeframe specific to the Census Bureau’s requirement.

11. Future Competitive Plans:

The Census Bureau requires a data set containing individual retailer data on a weekly and monthly basis by store location, e-commerce vs brick-and-mortar differentiation, and product category. At this time, this data source that the Census Bureau requires is not available elsewhere.

However, the Census Bureau’s mission is to serve as the nation’s leading provider of quality data about its people and economy, and that includes exploring all available supplemental data options in the private sector as well. The Economic Indicator Programs are continually involved and engaged with the market research industry through trade associations (i.e., International Council of Shopping Centers and National Federation of Retailers), trade shows (i.e., Retails Big Show, Shop Talk, and Grocery Expo), as data users, as data providers, and through ongoing research projects to further expand upon the quality and timeliness of data that Census surveys provide. The trade shows and feedback from data users often provides these Programs with alternate sources of information that can be further explored as a different means of procuring such data. The Census Bureau will continue to research new sources of data as they enter the market to improve the quality of the data and the efficiencies of getting the data out in a timely manner through competitive acquisition procedures.

APPROVAL PAGE

SOLE SOURCE JUSTIFICATION

I certify that the data and information forming the basis for this justification are accurate and complete to the best of my knowledge and belief.

Stephanie Studds Date Technical/Program/Project Manager

As Contracting Officer, I hereby certify that the justification is accurate and complete to the best of my knowledge and belief.

Long Nguyen Date Contracting Officer

Based on the above justification, I hereby approve accomplishment of this acquisition by means of sole source procedures in accordance with FAR 13.5.

Leslie A. Andrecs Date Operating Unit Competition Advocate U.S. Census Bureau

Contracting Activity: U.S. Census Bureau, Acquisition Division