Regardless of how a successful bidder is chosen, the goal of source selection is to choose the best value for the organization (Figure 1). In a traditional best value analysis, cost and non-cost factors, such as the bidder’s management plan, past performance, technical approach, and other factors, are considered. Sensible tradeoffs are allowed as the various factors are assessed. This tradeoff analysis gives the soliciting organization flexibility to identify additional value that may be provided by a bidder rather than being confined to the undesirable situation of basing a source selection decision solely upon cost.
The lowest price technically acceptable (LPTA) source selection process is appropriate when best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price. To that end, section 880 in the Fiscal Year (FY) 19 National Defense Authorization Act (NDAA), states: “[I]t 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.” Therefore, the LPTA procurement strategy is meant to provide a best-value analysis.
The LPTA strategy indicates to prospective bidders that the soliciting organization has pre-determined that no additional value in tradeoffs between cost versus non-cost factors exist. That’s a bold assumption especially when the procurement is for services that require highly skilled individuals and where risk must be minimized. The only way that such an assumption can be valid is if the procurement’s standards and requirements are very accurately and clearly articulated in the performance work statement. If standards and requirements are not clearly identified and properly articulated, the LPTA strategy will fail because bidders will be measured against a faulty baseline.
The inability to soundly evaluate a bidder’s proposal because of poorly defined and articulated standards and requirements can introduce significant risk. The improper identification and definition of standards and requirements has the potential to allow unacceptable bidders to become candidates for contract award in LPTA procurements that would justifiably be eliminated from consideration in a traditional best-value analysis. It also increases the possibility of protests. Therefore, with an LPTA procurement strategy, clear and accurate standards and requirements are the keys to success.
The latest guidance directs the DoD to employ the LPTA process under the following conditions:
- Minimum contract requirements in terms of performance objectives, measures, and standards are clearly identified
- There is little or no value in exceeding the minimum technical or performance requirements set forth in the proposal request
- There is little or no subjective evaluation as to the desirability of one proposal versus another
- There is a high degree of confidence that a review of technical proposals other than the lowest bidder would not result in the identification of factors that could provide value or benefit to DoD
- Little or no additional innovation or future technological advantage will be achieved by using a different source selection process
- Any goods being obtained are generally expendable in nature, are nontechnical, or have a short life expectancy or shelf life
- A justification is included for the use of an LPTA evaluation methodology in the contract file
- The lowest price reflects full lifecycle costs, including operations and support.
Additionally, the DoD should avoid LPTA procurements to the “maximum extent practicable” in procurements involving the following types of goods and/or services:
- Information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, audit or audit readiness services, health care services and records, telecommunications devices and services, or other knowledge-based professional services
- Knowledge-based training or logistics services in contingency operations outside the United States.
The use of the LPTA method is expressly prohibited in procurements for the following:
- Items designated by the requiring activity as personal protective equipment or an aviation critical safety item, when the requiring activity advises the contracting officer that the level of quality or failure of the equipment or item could result in combat casualties
- Engineering and manufacturing development for a major defense acquisition program for which budgetary authority is requested beginning in fiscal year 2019
- Contracts for auditing services.
Civilian federal agencies must adhere to similar guidance that restricts the circumstances under which procuring agencies may use the LPTA source selection process.
Cask has the experience, knowledge, and resources to help your organization develop accurate and well-defined requirements in support of LPTA procurements. Cask’s approach to developing clearly articulated specifications and requirements can help reduce the potential risk associated with employing LPTA procurements ensuring that your organization truly does achieve the best value at the lowest cost.