By Stephanie Fine, Esq.
Good news for Federal contractors. The recently enacted National Defense Authorization Act (NDAA) will expand limitations on the use of the much-criticized Lowest Price Technically Acceptable (LPTA) source selection that was previously imposed on the Department of Defense to now include civilian agencies.
The LPTA procurement process requires source selection officials to choose the lowest price proposal that satisfies the minimum technical requirements without regard to whether it offers the agency the best value. For decades government contractors have been critical of LPTA because of impact on reducing agency discretion, decreasing contractor motivation, reducing competition and encouraging contractors to sacrifice quality for lower pricing.
Finally, Congress has jumped on the bandwagon and realized that LPTA has significant limitations and should only be used in certain situations. The new NDAA states that “it shall be the policy of the United States Government to avoid using lowest price technically acceptable source selection criteria in circumstances that would deny the Government the benefits of cost and technical tradeoffs in the source selection process.” Going forward, the use of LPTA will only be permitted when all six of the following criteria are satisfied:
- An executive agency is able to comprehensively and clearly describe the minimum requirements expressed in terms of performance objectives, measures, and standards that will be used to determine the acceptability of offers;
- The executive agency would realize no, or minimal, value from a contract proposal exceeding the minimum technical or performance requirements set forth in the request for proposal;
- The proposed technical approaches will require no, or minimal, subjective judgment by the source selection authority as to the desirability of one offeror’s proposal versus a competing proposal;
- The executive agency has a high degree of confidence that a review of technical proposals of offerors other than the lowest bidder would not result in the identification of factors that could provide value or benefit to the executive agency;
- The contracting officer has included a justification for the use of a lowest price technically acceptable evaluation methodology in the contract file; and
- The executive agency has determined that the lowest price reflects full life-cycle costs, including for operations and support.
The Statute also prohibits the use of LPTA procedures for three categories of acquisitions which include: (1) information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, audit or audit readiness services, healthcare services and records, telecommunications devices and services, or other knowledge-based professional services; (2) personal protective equipment; or (3) knowledge-based training or logistics services in contingency operations or other operations outside the United States…”
This highly anticipated change to the Federal Acquisition Regulation (FAR) will be effective in December 2018 and sure to be a huge game changer for the Federal procurement process. This change will most notably encourage federal contractors to return to focusing on their solutions’ value propositions as opposed to offering bids based solely based on price. In the end, the contracting process will be much improved and will lead to a more competitive procurement process.
About the Author:
|Stephanie Fine, Esq.
Stephanie Fine is a Proposal Writer for Federal Contracts and Training. She is responsible for managing the proposal processing including preparing proposal responses and acquiring new business opportunities, and the development of the pipeline used for solicitation tracking and proposal development. She is experienced in business development and proposal management and also worked as a practicing attorney in commercial litigation and insurance defense.