Too soon to say good-bye to LPTA?
- By Stan Soloway
- May 09, 2016
Few issues have so galvanized the private sector in recent years as the government’s overuse of what is known as “lowest price/technically acceptable” acquisition strategies, or LPTA.
The examples of the misuse of what, when used appropriately, is a perfectly reasonable acquisition approach are legion and cases are cropping up that suggest the tide might finally be turning.
But to what extent?
To reiterate the core of the discussion, as defense undersecretary Frank Kendall has stressed in the department’s Better Buying Power initiative and as federal procurement policy administrator Anne Rung has also consistently said, LPTA makes eminent sense for the procurement of well known, low risk, common goods and services, but is rarely the right strategy for anything of even moderate complexity or risk.
Yet, the landscape is littered with examples where these admonitions have been ignored. From the Defense Information Systems Agency’s recent Encore III procurement (now the subject of a pre-award protest), to the Navy’s procurement of engineering services at an hourly rate that the Navy itself has defined as appropriate for administrative support, virtually every company in the marketplace has had more than its share of experience grappling with the challenges of a low bid world.
So, is the pendulum really swinging back to where it should be?
The answer is far from clear, although there are some promising signs. In some agencies or components, consideration is now being given to establishing low bid bars, i.e., a level below which the award of a contract would at least be in doubt if not prohibited.
We’ve seen a handful of situations in which end-user government customers have appealed decisions to use LPTA to their acquisition leadership, or even to their agency or component leadership.
And more and more key acquisition leaders are openly talking about the need to rationalize the way in which acquisition strategies are established.
As evidenced by discussions at the recent Acquisition Symposium at the Naval Postgraduate School that does not mean we are anywhere near being out of the woods.
Speakers’ opinions about LPTA were somewhat mixed. One senior acquisition official said he remained very concerned that there is too much “cutting and pasting” of previous acquisition strategies and that not nearly enough thought is being given to the implications of acquisition strategy for mission and performance.
But another senior acquisition official was far more sanguine, saying he didn’t think his service had a problem with LPTA. Rather, he expressed concern about companies “buying in” to procurements, suggesting that the fault lay there rather than with the market dynamics created when one selects the wrong acquisition strategy.
Beyond the specific exchange over LPTA, several attendees, myself included, were struck by the sharp divide among senior leaders over the quality and capabilities of the current acquisition workforce. Several speakers talked openly about the need to revitalize workforce education and development, a theme echoed repeatedly by the workforce itself in survey after survey.
But still others were much less animated on the topic. One said “it takes time, we need to be patient,” (as if the topic and the need were new), while another said he was “pleased” with where his workforce is and thinks they “have it about right.”
And, not surprisingly, those who were least concerned about the overuse of LPTA tended also to be those least concerned about what some, again myself included, fear is a workforce crisis.
The bottom line is that, the signs of progress and policy pronouncements notwithstanding, it is far too soon to declare victory and move on.
As is always the case, real sustained progress requires a renewed emphasis on the training, professional development and skills that enable smart business decisions and, as a result, smart contracting.
That continues to be the biggest challenge. And until we get it right, finding the right balance between cost and technical capability and quality will remain elusive.
Stan Soloway is a former deputy undersecretary of Defense and former president and chief executive officer of the Professional Services Council. He is now the CEO of Celero Strategies.