How will you navigate the LPTA environment?
- By Mark Hoover
- Aug 19, 2014
If you know about LPTA procurement, chances are that you hate it, but there are things government contractors can do as a community to combat LPTA contracting and eliminate some of the issues around it that have been bogging companies down since LPTA became so popular.
Lowest price technically acceptable contracting has its place, like with utility purchases or things of that nature, but when it comes to professional and technical services and systems integration, you get what you pay for, executives said at Washington Technology’s LPTA: A Hate-Hate Relationship breakfast Thursday morning, sponsored by Computech.
The chief issue with LPTA contracting is its ambiguous requirements: folks on the government side are required to define what they need in order to determine what is “technically acceptable,” but these are often not clear enough.
To solve this, contractors need to be keeping up with their program managers long before the contract is drawn up, said Steve Charles, co-founder and executive vice president at immixGroup.
“Our program managers are the people responsible for defining requirements,” he said. “They are the people who bear the responsibility for putting those things in writing, in the purchase request or that acquisition plan, long before it gets to contracts.”
Communication here is key. “I believe part of the reason we have so many problems is that our program managers and our sales organizations are not conversing fully and freely during the first three steps of the acquisition process,” Charles added.
Another big issue with LPTA procurement is the lack of consideration for past performance, said Bob Lohfeld, co-founder and CEO of Lohfeld Consulting. The reason for this, as one audience member mentioned, is to allow startups to be a part of the bidding process, as they would not have much past performance to draw on, if at all.
The danger, however, is that companies are then allowed to manipulate their pricing such that a less qualified company could go ahead and win the work while a more qualified company loses its bid. It is one of the many unintended consequences of LPTA procurement, Lohfeld said.
“We have begun awarding contracts to the boldest bidder, and not the best bidder,” he added.
Aside from more communication, there are other solutions to this problem. “When we have our meetings with high level folks in the government, and we want to follow up, let’s give them the framework for the next step in the procurement process, which is a market survey,” Charles said.
The survey can simply say that “if you have requirements that look like this—one, two, three—then we will build the following,” Charles said. “We are helping to build a requirements matrix using our language because they don’t have language. They’re supposed to go out and do market research, but unless you tell them, how will they know?” he added.
Another way to combat LPTA is through initiatives that already exist to reform the acquisition process. One such initiative is one spearheaded by the National Defense Industrial Association (NDIA).
“NDIA has an initiative to make substantial input in this acquisition reform movement. They plan to submit this to [Congress], and they’re doing this in a very thoughtful way, so if you are members, you have an opportunity,” said Lenn Vincent, RADM, USN (ret.), Forrestal-Richardson Industry Chair Defense Acquisition University.
Though others were less optimistic. “Acquisition reform is not going to fundamentally change it, so we need to learn how to help our customers to find those non-price factors and put them in writing so the contracts can actually work toward that,” Charles said.
“We can’t just win the argument by just bashing LPTA. We, as a community, need to find an alternative. We need to tell the government that costs have to come down, there’s not enough money,” Lohfeld said. “We need to turn on that creative thinking process, and I challenge each and every one of you to think about that and take that message home to your companies,” Lohfeld said.