Lisa Mascolo

Why not low-price, technically exceptional?

Government and contractors must demand affordable, but innovative solutions

 

When I hear "acceptable," I think adequate, good enough, not great but okay. Who among us would choose an acceptable surgeon? Fly on an acceptable plane? So I sort of cringe each time I read or hear about the low price/technically acceptable (LPTA) procurement evaluation criteria.

No one disagrees that the government - and, more importantly, the taxpayer - needs affordable solutions. We also need innovative solutions that enable service delivery and mission fulfillment, that stand the test of time, and that drive return on the investment. Should we, as taxpayers -- and, in this discussion, as service providers in this market -- invest in and provide solutions deemed acceptable?

Acceptable really is the antithesis of innovative. LPTA is a hold-the-nose response to the economic climate. It doesn't challenge government or the service provider community to do anything other than define, expect and deliver adequate work -- and we need and deserve a lot more than adequate.

Exceptional solutions and services don't just address today's needs in an OK manner; they position for the future, they conserve resources both fiscal and human, and they get to the right answer quickly. Why shouldn't we demand exceptional - of ourselves and our government?

Because we think it's too expensive? Mediocrity is what's expensive. If the goal is acceptable, where is the incentive to define and provide anything beyond that which works fairly well and might last a while?

For those of us who serve the federal government, we can and should clear a bar higher than acceptable. I don’t think any of us wants to claim bragging rights for mediocrity. Technology is our lifeblood; we are equipped to design and deliver technically exceptional services and solutions that also are appropriately priced, even low-priced.

Technically exceptional needn’t mean high price. Just because we’re used to paying a lot for unexceptional results doesn’t mean we can’t change the paradigm, especially when it comes to buying IT services and solutions.

Yes, we're in business to drive revenue and make a profit. And smart pricing certainly should reflect today’s economic realities and accompanying budget challenges.

If your solutions are smaller, smarter and faster, they also can be cheaper.

Smaller – The days of big plans, big systems, big delays and big overruns must be over. Smaller, more agile, incremental approaches are needed to most efficiently spend taxpayer dollars.

Smarter – Companies that embrace open source, modular, commercial off-the-shelf solutions and development frameworks drive forward-thinking solutions built to last.

Faster - Taking years to plan, design, build and test a system that might not work -- and might not meet requirements -- is a thing of the past. Technology evolves, requirements change and missions morph too rapidly for a years-long design, build and implementation.

Cheaper, however, doesn’t mean free. My friend Stan Soloway, of the Professional Services Council, spoke about the “low-price limbo” in his Oct. 1 column. While he understands the government’s imperative to seek the best deal in terms of price, he cautions against bids becoming so low that it becomes impossible for contractors to bid and for the government to procure anything innovative, worthwhile and sustainable.

If you’re developing, implementing and maintaining smaller, smarter, faster, cheaper services and solutions, you’ll be much better positioned to score well on price and high on tech. Then, both government and taxpayers benefit from real value: low price and far beyond “technically acceptable” solutions. We need industry and government focused on low price/technically exceptional.

 

Reader Comments

Tue, Oct 16, 2012 Jaime Gracia Washington, DC

The missing component here is the lack of leadership and accountability for successful outcomes. The government should not settle for mediocracy, and certainly industry providers do not set out to provide average services. However, the LPTA environment normally drives prices below the levels of what the innovative solutions demand. Because price reasonableness evaluations are poorly or rarely done, low price is king at the cost of performance, exacerbated with improper management, waste, and poor governance and oversight. Businesses can differentiate themselves by educating their customers on their innovative and affordable solutions, and pointing out that low price does not mean poor performance. Settling means waste, and lose-lose scenarios for the taxpayer. We have enough of that already.

Mon, Oct 15, 2012 J. Collins Maryland

For the Service Industry, both Lisa and Miguel are correct (IMHO). The government can still focus on the Exceptional through the LPTA process. This can happen without FAR adjustment by doing what Miguel said, prepare a detailed metric for what will be "Technically Acceptable." By setting the bar very high on the technical end, the government will filter out the "outside buyers" who will try to buy into the work by echoing requirements and offering an unreasonably low price (interjecting a high level of risk into the equation). By requiring the bidder to actually present their knowledge of the SOW and how certain solutions might be achieved, the government will get a true performer and the true performers will have the chance to bid a reasonable price knowing the very low-bidders will be filtered by the superior Technically Acceptable bar. It comes down to the comfort level of the government with the service they are getting and the effort it will require.

Sat, Oct 13, 2012 Miguel A Rivera

LPTA is not necessarily synonymous with adequate. Higher priced products are not always of higher utility. Fiscally responsible government employees are always seeking the equilibrium price the law of supply and demand can produce. The government challenge with LPTA is the authoring of technical requirements. Sales organizations can assist the government acquire the best value through education and good business practice. Education is achieved when government personnel are well versed on the problem they are attempting to solve and in turn the possible solutions (by way of requirements not products) to this problem. Good business practice is executed when the government does not preselect the solution based on biases and ignorance. The onus is then on a business to ensure that they improve their products and cost models to achieve the equilibrium price. We could argue about the inefficiencies of LPTA, the government, the FAR, and any other factors. However, let’s not judge a philosophy because of its abuse.

Fri, Oct 12, 2012

They have a description of this already - it is called best value in which the Government makes the determination of the trade-off in increased cost of solutions that exceed the minimum technically acceptable solution.

Fri, Oct 12, 2012 MarkG Alexandria, VA

Ms. Mascolo - a well written article. My own consulting experiences have been limited to supporting DoD but there are a number of decision-makers who seem to embrace this paradox: "I want to make a giant leap forward (BIG program) but take no risk." The "big leap" actually means big dollars which imparts to the program manager, big influence. It's the "low to no risk" element that doesn't fit: you can't take giant leaps and simultaneously reduce risk. In fact, risk rises the "bigger the step" you want to take. What is needed are incremental, risk managed steps . . . and I think your article says that well.

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