Government sends mixed signals with LPTA, small biz initiatives

The government is sending plenty of mixed signals thanks to LPTA requirements in the new Defense Logistics Agency's STORES contract and small business talk coming out of GSA, writes PCS President Stan Soloway.

In a market that lacks clarity and consistency, it is interesting to watch specific procurements or trends to see what path they take and what broader meaning might be gleaned from them. Sometimes one is pleasantly surprised, other times, much less so.

This month two items come to mind.

The DLA Subsistence Total Order and Receipt Electronic System (STORES) contract is critical to DLA’s mission. The program plays a vital role in providing crucial software maintenance, support and occasional upgrades for the agency’s worldwide goods delivery system.

With STORES set for a recompete, the request for proposals is out, and reactions from the community have been unenthusiastic.

Several potential bidders have expressed concern that a contract of this size and complexity is being procured on a “lowest price, technically acceptable” basis. In their view, the fact that the work involves software development for something as large and complex as STORES makes the contract a poor choice for an LPTA award, particularly in light of the spate of recent LPTA awards in which the technical acceptability bar was set at minimal levels.

As I’ve written before, and as others including Defense Undersecretary Frank Kendall have said, LPTA just isn’t an appropriate evaluation methodology when buying other than truly commoditized goods or services.

To make matters worse, in the RFP, DLA makes clear that it reserves the right to conduct a reverse auction on top of the LPTA award. That sounds both illogical and dangerous to say the least.

To their credit, DLA leadership has been very responsive to the questions we have raised. And their perspective is, not surprisingly, somewhat different.

They believe that their emphasis on confirming the qualifications of key personnel and requiring a detailed work breakdown structure and relevant past performance suggests that the “minimum” bar is reasonably stringent.

They also highlight that the developmental requirements of the contract are minimal because the system is fully functional and stable with core code that is well established. In other words, while not exactly a commodity service, in their view, the stable, well known and generally routine requirements associated with STORES make it a sound candidate for a smartly executed procurement. 

Both might be right. With the right technical requirements, an LPTA procurement need not be a bottom-feeding exercise. Thus, DLA’s argument might have merit.

On the other hand, recent history across government raises equally fair concern and skepticism; however, we won’t know for certain until the procurement is completed and we can see more clearly how the process worked.

Meanwhile, talk has been circulating for some time that the General Services Administration has decided to emphasize small business contracting more than ever before.

Some insiders say they have been told that virtually all requirements must be set aside for small business or that they must get permission from top agency leadership to do otherwise. 

If GSA were an agency with a poor record in small business contracting, the policy would make some sense. It has worked in some agencies and failed in others. But that is not the case at GSA. In 2012, almost 40 percent of GSA’s prime contracting dollars went to small business. An admirable achievement to be sure. But why then, would there be such pressure to do even more now? 

For example, when looking at specific GSA contract vehicles, such as the Technical Acquisition Support Services contract (TASS), fair questions are being raised as to why so little work is being procured through that already-competed multiple award vehicle and instead is being put on new small business contracts or other existing small business vehicles which were never created to support the kind of work awarded under TASS. 

The three contract holders are all mid-tier firms, not giant companies. Indeed, two of them are, by any definition, small mid-tier firms who have a hard enough time competing in that dreaded no-man’s land. Is GSA on a new path? Has the “policy” been miscommunicated or misunderstood? What are the current contract holders, or other bidders on other potential contracts, to think about a marketplace in which they spend hundreds of thousands of dollars to compete only to have the customer decide mid-stream to not use the contract vehicle as planned?

The answer as to who is right with regard to DLA STORES will come in due time, when the procurement is completed.

As for GSA, needed insight and information could some sooner, if the agency more clearly communicates with the vendor community. And depending on the answer, that in itself might drive an important, broader conversation.