Is this the end of LPTA as we knew it?
By
Nick Wakeman
The Defense Department's final rule on lowest price, technically acceptable contracts sharply curtails how they can be used. Will the 2019 NDAA put a final nail in the coffin?
We’ve seen LPTA contracts start to fade in recent years, but now with the Defense Department’s final rule to put stricter limits on its use, it might be safe to say the era of LPTA is over and probably has been for a couple years.
Lowest price, technically acceptable procurements -- competitions that were a price shoot out once bidders met minimal technical requirements -- seemed to dominate the market earlier this decade as we moved through a period of austerity. As many in industry complained, it was a race to the bottom and left no room for innovation and risk taking.
DOD’s final rule describes when it is appropriate to use LPTA -- commodity products, not development work and other services that require higher levels of expertise.
The rule implements requirements in the 2017 National Defense Authorization Act and says that contracting officers will need to document why LPTA is the right approach for a procurement. That requirement alone will like put a damper on any resurgence of LPTA.
The DOD rule does not apply government wide, so only defense agencies need to comply. But industry groups such as the Professional Services Council are urging its adoption by civilian agencies as well.
Agencies should focus on best value and not default to the lowest price, said PSC President and CEO David Berteau in a statement.
A requirement that the rule be applied government-wide is included in the 2019 NDAA, which is working its way through conference on Capitol Hill as the Senate and House work to reconcile differences between their versions of the bill.
PSC is urging that the LPTA rule be applied to civilian agencies as well. "The federal government should act expeditiously to put the final nail in the LPTA coffin by issuing the government-wide regulations," Berteau said.
DOD’s final rule goes into effect on Oct. 1, the start of fiscal year 2020.
In 2014, we published a WT Insider Report that documented how hated LPTA was and the damage it was doing. A follow-up report in 2017 showed that many in industry felt it was still being overused.