Mike Parkinson

OPINION

How technical expertise can win a LPTA competition

It might be a mistake to focus just on price

Lowest price technically acceptable is a criterion used to select a solution provider from a list of competitors in a federally governed proposal competition.

Competitors that are graded “technically acceptable” (i.e., their proposal meets the capability requirements defined in the request for proposals make it to the final round. Between these finalists, price alone dictates which proposal wins.

Using LPTA as the criterion for a proposal proclaims that the RFP issuer sees no benefit from an offeror exceeding the requirements stated in the RFP. Excluding simple deliverables, LPTA is not a wise strategy for selecting most proposals. Devaluing quality and experience raises risk levels.

Unfortunately, our country’s current fiscal situation is increasing the number of RFPs reliant on LPTA to determine the winner. Working within the limitations of LPTA is the only option if we want to bid on the growing number of LPTA RFPs.

So, what can we do to increase our chances of winning LPTA RFPs?

Of course, pricing is key. I recommend a “price-to-win” strategy executed by an experienced professional who understands the client. The pricing specialist will build a price that can win based on current costs, past experience, the customer’s proposal award history, and other variables.

But price-to-win is not the best strategy to win an LPTA proposal. There is no other interpretation of “lowest price.” If a “technically acceptable” proposal from your competition is one dollar less than your price, then their proposal must win.

Additionally, if a proposal is priced too low, there is an increased risk of being found not technically acceptable or the offeror may lose money on the contract.

For this reason, price is not my main focus—and it shouldn’t be yours either.

LPTA was not intended for bids needing complex solutions yet some LPTA bids are far from simple. For a complex bid, it is impossible for the RFP to define every element that makes a solution “technically acceptable.” There is room for interpretation. By focusing on the parameters of the “technically acceptable”
(TA) portion of LPTA, we increase our chances of success.

Human evaluators are not robots. Quality will always be considered even in an LPTA environment. In an LPTA proposal, credibility becomes the qualitative and quantitative differentiator.

My goal is to win with proof points within the constructs of the LPTA evaluation system by answering the question: Why choose us and not our competition?

The secret to winning with TA is proof—proof that you can deliver at the price quoted and that a lower priced solution introduces too much risk and, therefore, is not technically acceptable.

Use this strategy to rise above competitors and prove your price is the best.

When proving that your solution is the right choice at the right price, I recommend the following two steps:

  • Prove that you will deliver the solution on the timeline at the price quoted.
  • Prove that a lower priced solution is too risky.

Prove You Will Deliver at the Price Quoted

I use three methods to prove that I will deliver the product or service on schedule and on budget.

A. Comparison

Through direct comparison, I show how I will execute my solution at the quoted price. For example, in a traditional staffing scenario there may be eight steps. By comparison, my staffing approach has four and delivers the staff required in the RFP. I explain (prove) how I will cut four steps to lower the price without
impacting the outcome.

B. Past Performance

Technically, past performance is not needed in an LPTA bid because the Federal Acquisition Regulation (FAR) states that “unknown” past performance shall be considered “acceptable.” However, I use past performance to illustrate proof of concept. If I say I can meet the requirements of the deliverable at a lower
price point, I want to prove this assertion or risk being found not technically acceptable.

C. Quantitative

I show data gathered during testing or past reviews to validate my solution. Numbers have teeth when establishing credibility because that which is measured typically improves and is repeatable. I will qualify my data with research notations when applicable.

Prove That a Lower Priced Solution Is Too Risky

Low price is often associated with high risk, because low price is synonymous with lower quality, increased likelihood of failure, lost efficiency, and a spectrum of negative outcomes.

I highlight these risks then point out critical elements found in my solution that mitigate these risks. If these features are missing or executed poorly, the proposal should be deemed not technically acceptable. (Think of these elements as critical success factors.)

The buyer is risk-averse. They do not want to buy a low-priced solution that doesn’t work. Throughout my proposal, I remind the evaluator of the dangers associated with a bad-buying decision. I empower them to eliminate questionable solution providers (my competitors) by highlighting elements required to render the (best) service at a low price. I point out the features needed to ensure a successful execution at that price.

Without these features, the risk of failure increases. This approach is subtle. You can be more implicit when acceptable.

I recommend using graphics to make it easy for evaluators to find, understand, remember, and grade information that is crucial to your proposal’s success.

Click here to view a graphic that explains how to present this to evaluators. Or if you prefer to download the graphic, click here.

An LPTA RFP is an opportunity to win on technically acceptable as long as you follow this strategy. Prove that you deliver a higher quality solution at a low price—when others cannot.

Reader Comments

Fri, Feb 8, 2013 Frank Matt Tucson, AZ

Mike you can say blah, blah, blah...about LPTA. Bottom live is the government is looking for how low can you go and worry about performance later!

Thu, Feb 7, 2013 Colleen Jolly Washington, DC

Of course it all goes back to knowing your customer -- understanding and applying what is going to work in your specific situation. If you don't know anything about your customer or their environment (budget constraints, changes, etc.) or don't have a relationship with them then simply pricing low also isn't going to help. As with anything, answer your customer's problems clearly with proof as Mike notes and then price appropriately (not to be high or low or to win, but what it should cost). You might not win them all but the ones you do you will serve more effectively and further develop that relationship with your customer.

Thu, Feb 7, 2013 Mike Parkinson Washington, DC

SPMayor, you on the money (pun intended)! Stop LPTA before it starts. Mark Withers, I agree. In the situations where there is no comparison, if you do have the lowest price, its still yours to lose if not found technically acceptable; therefore, make it easy (really easy) for the evaluators to find you technically acceptable by using some of the approaches in the article.

Thu, Feb 7, 2013 TASC Public Affairs Virginia

Mike - your article offers very practical insight to offerors. TASC conducted a study on the risks of the LPTA approach in the DOD world. To get a free copy of our white paper, email us at info@TASC.com or download it at http://www.tasc.com/media-center/white-papers/The-Challenge-of-Applying-the-LPTA-Process-to-the-Procurement-of-Complex-Services/.

Thu, Feb 7, 2013 Mike Parkinson Washington, DC

Thanks to all for sharing your insight and experiences. :) This strategy works for LPTAs. I've used it. However, as noted in the responses, it doesn't work for ALL LPTA RFPs. This strategy is also applicable to other types of RFPs. I received an email about this article and the sender saw this approach applying to Performance-Price Trade-off (PPT) bids. Every RFP has eccentricities. The secret is to know when and where to apply which strategies. I hope this article adds a few to your tool belt.

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