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By Nick Wakeman

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Nick Wakeman

Do you know how to thrive under LPTA?

As I moderated our webinar on lowest price technically acceptable contracting, I was mostly in listening mode; after all, we had two experts who know the ins and outs of the market better than I do.

Shamun Mahmud of DLT Solutions and Paul McCloskey of SolarWinds laid out what they see as the keys to surviving -- and even thriving -- when customers are looking for the lowest price.

McCloskey hit on one of the toughest decisions in this kind environment – knowing when to walk away.

“Sometimes the cost of losing a contract is lower than the cost of winning it,” he said.

That has to be a tough conversation at any company, especially when you have sales and business development folks who probably see every opportunity as a must win, and in a market that isn’t as target rich as it once was.

Another takeaway was that the need for getting in front of your customers as early in the process as possible. You might not stop it from being LPTA, but you can push them to make their requirements as specific as possible.

Mahmud and McCloskey both suggested to get out to those industry days.

Mahmud also presented a list of 10 best practices. The emphasis here was on the need to measure things and set benchmarks. The cliché is very true: you can’t improve what you don’t measure; you also need to test, and cannot be afraid to audit.

He also made a strong case on how we ended up with LPTA; among the statistics he presented, that over half of IT projects are over budget, and only 16 percent are finished on time, both stood out.

When your customers’ budgets get tight, they aren’t going to have much patience with missed deadlines and cost overruns.

But I’m still skeptical that LPTA will help address those problems because too much emphasis is on the LP part – lowest price – and not the TA part – technically acceptable.

Again Mahmud and McCloskey emphasized the need to get in front of customers, understand what they are trying to accomplish, explain your solutions and technology and help to craft those requirements. You should at least be able to point out where those requirements are unclear or unrealistic.

I think LPTA is going to be with us for some time, so I think the themes and messages in the webinar are definitely ones to take to heart.

Posted by Nick Wakeman on Mar 27, 2013 at 9:49 AM

Reader Comments

Sun, Mar 31, 2013 Girish Seshagiri United States

The government needs to move to LPHQ - Lowest Price Highest Quality and hold contractors accountable for cybersecurity vulnerabilities caused by defective software. I estimate the government will save upto $250 billion during the next 10 years if the government were to require that contractors provide warranty against software defects.

Thu, Mar 28, 2013 mark colorado

I am surprised that BOTH of the examples listed for how we ended up with LPTA would be BETTER addressed with a Firm Fixed Price solution, rather than LPTA! I'm not saying there aren't good examples of how we ended up with LPTA or of how LPTA is a viable result. Its just that the examples provided don't SEEM to lead to an LPTA requirement........

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