Bob Lohfeld

OPINION

5 questions to derail an LPTA procurement

What you ask might guide an agency away from a low-price contract

Recently, while teaching a capture management class, a capture manager asked me what he could do when the contracting officer for a pending IT services bid said he wanted to use lowest price technically acceptable evaluation criteria versus the traditional best-value tradeoff approach.

The capture manager and the government program manager wanted to avoid an price shootout, but the contracting shop wouldn’t agree.

When confronted with this situation, here are five questions a capture manager should answer to help the technical client steer clear of LPTA requirements.

1. Does the use of LPTA violate government guidance?

Does your client know that the Defense Department has a policy statement providing guidance on when to use LPTA evaluation criteria instead of the best-value approach that trades off cost and non-cost factors. Appendix A of the DOD’s Source Selection Procedure (3/4/11) contains the policy and states that “LPTA may be used in situations where the government would not realize any value from a proposal exceeding the government’s minimum technical or performance requirements, often for acquisitions of commercial or non-complex services or supplies which are clearly defined and expected to be low risk.”

If your services are complex or if poor performance could expose the agency to unacceptable risk, then using the LPTA evaluation criteria would be inappropriate.

FAR 15.101-2 (a) provides a similar statement for LPTA bids, “The lowest price technically acceptable source selection process is appropriate when best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price.”

When using LPTA, the government must accept that there is no benefit from an offeror exceeding a contract requirement rather than just barely meeting it. Consequently, the only judgment an evaluator can render is that the offer meets the minimum requirements or it doesn’t. This means the government must accept a marginally capable bidder and grant that bidder the same standing as the best, most innovative firms in the industry. This is often an unacceptable position when the government strives to achieve service or technical excellence.

2. Can you define technical acceptability?

DOD provides additional guidance in its Better Buying Power 2.0 Memorandum to the Defense Acquisition Workforce (11/13/12). This guidance states, “Industry has expressed concerns about the use of Lowest Price, Technically Acceptable (LPTA) selection criteria that essentially defaults to the lowest price bidder, independent of quality. Where LPTA is used, the Department needs to define [technically acceptable] appropriately to ensure adequate quality.”

The procurement office should defer to the technical team for guidance on what constitutes technical acceptability. For procurements involving software development, systems integration, systems engineering, solution architecture, etc., it is hard enough to define the work let alone the criteria for technical acceptability. If the government cannot specify what constitutes technical acceptability in the RFP, then the procurement should not use LPTA selection criteria.

3. Is past performance important?

If past performance is important to the buyer, then LPTA may not be an acceptable evaluation criterion. The guidance from DOD states that, “In the case of an offeror without a record of relevant past performance or for whom information on past performance is not available or so sparse that no meaningful past performance rating can be reasonably assigned, the offeror may not be evaluated favorably or unfavorably on past performance (see FAR 15.305 (a)(2)(iv)). Therefore, the offeror shall be determined to have unknown past performance. In the context of acceptability/unacceptability, “unknown” shall be considered “acceptable.”

In accordance with the FAR, “If the contracting officer documents the file pursuant to 15.304(c)(3)(iii), past performance need not be an evaluation factor in lowest price technically acceptable source selections.”

Guidance from the FAR and DOD allows bidders with no relevant past performance to be treated as though they have the same past performance as the most experienced firms in the industry. If you believe past performance is a predictor of future results, then you may want to steer clear of LPTA evaluation criteria.

4. Is there public opposition to the use of LPTA?

Can you cite articles from the trade press that support your position that LPTA is inappropriate for most IT services procurements? If you Google Lowest Price Technically Acceptable, you can find 50 articles that discuss why LPTA should not be used for services bids. If this were my procurement, I would do the search and then send copies of relevant articles to the government technical team and their procurement office. Perhaps the power of the press can turn some folks away from using LPTA inappropriately.

5. Is there a record of failed contract performance?

Can you find evidence of similar service contracts awarded using LPTA evaluation criteria where the contract was either terminated for poor performance or substantially modified to grant price relief to the lowest priced offer? There is much speculation that the inappropriate use of LPTA criteria will ultimately result in contracts with unacceptable performance. If you can document some of these instances, it will strengthen your argument to avoid the LPTA approach.

If you have other strategies to help your customers steer clear of LPTA evaluation criteria and you want to share them, or if you can cite LPTA contracts that have failed, please add your comments below and our publisher will post your valuable guidance so that we can have an open dialog on the misuse of LPTA evaluation criteria.

 

Reader Comments

Wed, Mar 19, 2014

As a former Contracting Officer with 0ver 30 years of experience and now providing SME services for DoD activities, I am faced with a mindset from the contracting personnel that issue these types of contracts that they face an "uphill battle" convincing the "customer" that while LPTA might sound like an expedient way of soliciting for services, it ultimately becomes a nightmare to manage. More Specifically, when the RFP treats offerors with no experience in the same category with very experienced offeror's they are doing both the activity and the "customer" a Disservice Government as pointed out, by another comment such as the Enginneering firms supporting the C4ISR Community. Relying on a firm with NO experience on such critical and strategic level of technical support level of support is counter productive. Lowest Price is not always the best determinor of quality and not in the best interest of the DoD or the Taxpayer

Fri, Dec 20, 2013 John Q Contracts KO's desk

Government procurement officials face an uphill battle at times because they are often the lone party squaring off against the requiring activity and the Contractors that they have developed a rapport with and are unwilling to part with. If often seems that only when the relationship sours and the KO is needed to interpret and/or enforce the terms of the Contract are they sought out. Otherwise it is "let me spend my money with whom I want and don't interfere." KO's have a duty to ignore that sentiment and represent ALL taxpayers in negotiating the best deal for the taxpayer be that LPTA or Trade Off. LPTA's can't be painted with a broad negative brush nor can they be the square peg we try to shove into a round requirement. A Low Priced vendor who is deemed technically acceptable because he meets the minimum qualifications is not necessarily "minimally qualified." If you want more qualified vendors coming out of your LPTA the bar needs to be set high in the Evaluation Criteria. "Minimum qualifications" does NOT mean unqualified. If set right those qualifications will find the right vendor.

Thu, Jan 3, 2013

Very nice and educational article thanks for posting. I may not say this correctly and I hope others in this business are able to understand what I am trying to say but there is a human element to all of this on the Govt side of the effort. Seldom, if ever, are they required to present why they choose LPTA for this and PPT for that or T&M for another and then selected/awarded the work to whom they did other than a simple award "they beat your price" letter. I see a tremendous amount of "gray" area where the question...."how did this happen" never gets answered. The Govt never explains their silliness but I say in more and more instances they only award, based on LPTA, and then hope the awardee can perform....if performance is less than desired, the contract is usually ammended or changed to fit the current circumstances be it performance issues, personnel numbers/issues, level of experience issues and we are never the wiser. We have all been victims of "new" companies with little or no experience, no PP and they can Google a tech write up..... and win on price hoping to get your incumbents. Something is tragically flawed in that approach and I sincerely believe the tech folks input for performing the work is a distant second to the price. It can be a sound business poractice on paper...not so much in reality.

Fri, Dec 21, 2012

Helpful article that will assist in shaping the future discussions within our customer community. I am a small business owner providing high tech engineering services in C4ISR community. I too attended the recent CECOM APBI and was shocked at the posture of acquisition leadership that is summarized as: T&M is evil, incumbency is worthless at best and more likely a liability, and low cost is equivalent to Best Value. LPTA is rapidly becoming a "don't-bother" for businesses like mine and will result in a bottom-feeder mentality that delivers exactly what it promises - low bidder quality and performance. Within the engineering services community I believe that these acquisition policies are likely to undo nearly 20 yrs of progress towards realizing tactical IT superiority. In the end it is always the same - you do indeed get what you pay for.

Fri, Dec 21, 2012

"Is there public opposition to the use of LPTA?" What is lacking in the discussion of LPTA versus "trade-off analysis (remember, it's all part of the "best-value continuum") is a cogent analysis of the amount of money the Government has spent for the "high-priced spread" when it wasn't necessary. This just can not continue in the light of severe budget constraints, and reason needs to prevail. "There is much speculation that the inappropriate use of LPTA criteria will ultimately result in contracts with unacceptable performance. If you can document some of these instances, it will strengthen your argument to avoid the LPTA approach." The antithesis to this argument is that there also should be a review of successive instances for the same services where, under "trade-off analysis", award was made to the low-priced offeror and performance was acceptable, satisfactory and met the Government's needs. In such instances, one can argue that LPTA should be considered heavily in an effort to minimize the expensive use of evaluation resources unnecessarily. There are two sides to the LPTA issue and the author, and many other advocates of "best value", suffer from a bias. In an elementary sense, it's no different than the many purchasing decisions we make in our personal life; sometimes, we go low-cost and other times we're willing to pay a premium, but most of us can't afford to pay a premium all the time when it's not needed - the Government is no different.

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