Is LPTA here to stay?

Lowest price, technically acceptable contracting isn't going to fade away because too many procurement officials see it as a safe bet. Here's what you can do to convince them otherwise.

It’s an acronym well-known across the government contracting space - LPTA, short for “Lowest Price Technically Acceptable,” as an evaluation method for cost/price proposals.

In our work with contractors in the departments of Commerce, Defense, State, Homeland Security, and Veterans Affairs, as well as independent agencies, such as the FTC, EPA, GSA, NASA, and intelligence agencies, we have seen LPTA from several key angles - the good, the bad, and the ugly.

So, what can you realistically expect related to LPTA going forward into 2019 and beyond?

Many procurement officials in the government continue to perceive LPTA as a ‘safe’ approach for proposal review, mostly for its objective evaluation criteria. The belief is, with the objective criteria of lowest price, the risk of a protest is minimized. They also view it as a way to drive prices down. Unfortunately, that “objective” evaluation criteria can, and often does, lead to less-than-ideal awards.

So, to put it simply, LPTA isn’t going anywhere yet. It’s here to stay for now, but it is likely to experience some adjustments in usage going forward, largely as a result of increased availability of funds in some government agencies which don’t require them to be so focused on lowest cost.

Additionally, an interesting development in the government cost proposals realm is a renewed discussion on the benefits versus limitations between the LPTA and best-value evaluation methods. Today, we’re seeing modifications of LPTA usage, resulting in “LPTA Light” or “LPTA Similar” approaches which allow for additional subjectivity for cost/price proposal evaluations.

In fact, DOD over the past two years has issued more restrictive guidance on the use of LPTA as the evaluation methodology. Specifically:

“The Department of Defense shall not use a lowest price technically acceptable source selection process for the engineering and manufacturing development contract of a major defense acquisition program.”

–2018 National Defense Authorization Act Section 832

These changes are being driven by the unintended (but not altogether unexpected) consequences that can sometimes result from an inappropriate use of LPTA, such as cost overruns, recurring scope changes, early contract completion due to funding limitations, and more frequent recompetes due to early contract terminations.

When LPTA is used to award complicated programs where the contractor is ultimately unable to deliver the job at the price initially quoted, government contracting officers are stuck with few options. They can require the contractor to be forced to ‘live with’ lower-than-market pricing - which is demotivating and can affect the quality of the work product delivered. Or they can fight for the additional funds from other programs. Even worse, the government may have to decide whether to end the contract (with the work incomplete), or go back to the procurement ‘drawing board’ to find another bidder who can satisfactorily come through.

This can be expensive and time-consuming, affect quality, and create significant delays. In the end, these additional “costs” are often much greater than the initial “savings” of using LPTA versus Best Value. Essentially, the critical decision for the government is WHEN it makes sense to use LPTA or Best Value as the evaluation method.

The only real defense against LPTA is to get involved with the procurement way in advance of the RFP release. Your best option is to work with the government procurement team to determine if LPTA is really the right evaluation criteria for the program. Ask the following questions, and based on the answers you just might be able to encourage a new perspective from the government:

  • Is the scope of the program defined with crystal-clear precision? If it isn’t, LPTA is a significant risk.
  • Is past performance really important for the program? If so, LPTA doesn’t allow for that evaluation. Or the past performance evaluation is combined with the technical evaluation on a pass/fail scale. 
  • Does the work require highly skilled personnel who are in demand in both the government and private sectors? If so, the cost of that labor will likely go up over time, and unless the government wants to have the least-skilled of these personnel, LPTA will not allow for hiring competitively in the market.
  • Is the work primarily a commodity-like service or product? If not, LPTA doesn’t allow the government to choose the solution they may most likely desire.
  • Does it meet agency methodology criteria for using LPTA? Often procurements are in process when changes occur. It doesn’t hurt to help the government by letting them know about the changes (see the DoD guidance above). 
  • Does this program or do similar programs have a recent track record of issues/failure when awarded under LPTA? The best ammunition is often experience on other programs (whether it was your experience or someone else’s).

Having said all of this, you are probably asking what the bottom-line is?

Well, LPTA is here to stay, and while it does have its merits in certain cases, it will still likely be used in some wrong situations as well. That is probably good news if your company has been built to be a lean, commodity-like business. It’s probably not good news if your company provided services based on a value-added model.

So, unfortunately, be prepared to keep seeing LPTA procurements for the next few years as the government continues to work through its benefits and limitations. But do what you can to get ahead on individual procurements by working with the government to help determine whether an LPTA evaluation is the right one to use.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.