LPTA: Still as hated as ever
Three years ago we released a WT Insider Report on the impact of lowest price, technically acceptable contracts.
Those results were clear cut – folks hate LPTA. In fact, we called the report LPTA: A hate-hate relationship.
We found very little redeeming qualities to LPTA.
Since that time there has been a lot of talk from the higher reaches of the procurement world that LPTA really should only be used when requirements can be very specifically and narrowly defined. In general, services contracts should not be competed as LPTA.
In the past few months, we embarked on an update of the 2014 study to see if LPTA was waning as a force in the market place.
The news is not good. This latest report is called LPTA: The hate continues.
LPTA is still a hated and despised way to run a procurement. While the rate of growth has slowed, respondents don’t see it decreasing. Nearly half said usage of LPTA has stayed about the same.
We saw a slight increase in the number of respondents who said that less than of their contracts are LPTA but the steadiness of the responses from 2014 to 2017 indicate that LPTA well entrenched.
The report also explores contract losses by incumbents and the impact on customers.
We did see a shift on the impact on contractors that indicate that large businesses have been more successful in mitigating the negative impact of LPTA than small and midsize companies. More than half of our respondents said that LPTA has had the most negative impact on small businesses, compared to 40.5 percent in 2014.
Our research also showed that contractors give low marks to how agencies use best-value evaluations that aren’t LPTA.
Nearly half, 48.5 percent to be exact, said government buyers do not understand the difference between low price and best value. Another 31 percent said that for government buyers, low price is best value.
Our Insider Reports are produced exclusively for members of the Washington Technology Insider program. For information on how to become an Insider, click here.
Posted by Nick Wakeman on May 15, 2017 at 9:36 AM