Too soon to say good-bye to LPTA?

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.

Reader Comments

Tue, May 17, 2016

LPTA is a useful tool when buying simple services that are easily measured, repeatable and generally low risk affairs. There is a need for LPTA, but it is not the right point on the best value spectrum for every service. The Pendulum has indeed begun to shift towards a more reasonable approach (See Memo from Under Secretary of Defense dtd Mar 04 2015). The Author wraps up the article with a prognostication of “workforce crisis” I’ll posit that it’s more of a leadership crisis at the highest levels. Maintaining a trained, experienced workforce within the acquisition career field is not easy. I’ll focus on Contracting. Twenty years ago the FAR and DFARS were approximately half the size of today; I have baby FARS sitting in front of me as I type. Why did the Acquisition regulations increase at a minimum two-fold (and I’m not even focusing on the AFIs, PGIs, and other guidance available)? Wait for it… FEAR. Fear of litigation, Fear of losing one’s job in a one mistake environment (I know, officially it’s not a one-mistake world). But in a word I believe its fear. By trying to write a regulation or guide for every conceivable situations, we remove the ability of our workforce to apply sound judgement and actually make things happen, to include any possibility of innovation. Having written guidance for everything is a way of insulating oneself from punitive repercussions. Unfortunately all that “guidance” adds cost, complexity, and inefficiency. How many levels of approval must be given before anything can be done? How many non-value added comments must be addressed? Try to award a contract in a timely manner… I dare you. Senior leadership probably has been away from the actual work of Government Contracting and Program Management for too long to actually remember how much red tape is associated with each decision they make to protect the workforce from a potential protest. We are in a quagmire of oversight and fear. For a parting thought; how many frivolous law suits are filed annually, how many Protests are denied “There has been a significant shift in bid protest trends over the last six years. When compared to the rate of government spending, bid protests decreased from FY2001-FY2008, and increased from FY2008-FY2014. From FY2008-FY2014, total government spending, adjusted for inflation, decreased 25% while total protests increased 45%. The rate at which GAO sustains protests has also seen a significant shift in recent years. From FY2001-FY2008 GAO sustained protests in 22% of their opinions; from FY2009-FY2014 that number dropped to 17%. These numbers suggest that while companies are more likely to file a bid protest, they are somewhat less likely to win a bid protest.”- GAO Bid Protests: Trends and Analysis Workforce crisis? How about a Leadership crisis.

Thu, May 12, 2016 Istfan Garlink No. Virginia

Stan needs to declare what he believes strongly: the 800 lb. elephant in the room is, without question, the decrepitude of the Federal acq workforce. You can see it in the lower productivity, rising protest rates, rates of modifications, quality of RFPs and contracts, quality of government-side acquisition IT--the Feds are killing the industry they desperately need. Few are happy with any major award or contract. Either the wrong people go into this field, or they are perennially poorly trained, poorly supervised, never held accountable for gross errors and even criminal conduct, e.g. compromising acquisition-sensitive and proprietary info, or obscuring their own conflicts of interest. Someone needs to stop the madness by calling out these people and replacing them with.....(wait for it).....contactors or a brand new FFRDC.

Tue, May 10, 2016 Ian Watanabe Tysons

Symposium must have been interesting. Gov types were open in their skepticism about the quality and business ethics of services suppliers, and contractors were bemoaning the low quality of gov acquisition work force. Both these positions are well founded. These --not opposing, but rather consistent-- viewpoints buttress the view that Fed contracting is mainly a commodity labor affair. And that is why LPTA is the way to go. It is all about turning the crank, not innovation. And almost all firms are incapable of innovation; many have trouble just turning the crank.

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