Almost all companies doing business with the government have been impacted at one time or another by the usage of the often-maligned “lowest price technically acceptable” (“LPTA”) procurement process. LPTA procurements were implemented during a period of constrained federal budgets and were designed to allow procurement officials to award on low price among those bidders who were all deemed technically acceptable. Many contractors have complained, and often filed protests, about the improper usage of LPTA in programs where technical innovation is important and where contractors have sacrificed program quality by hiring the lowest priced talent available.
Congress ordered changes in the usage of LPTA procurements in the 2019 National Defense Authorization Act (“NDAA”), and recently the Department of Defense issued proposed regulations implementing the 2017 and 2018 NDAA provisions. The new Defense Acquisition Regulations Supplement (“DFARS”) 215.101–2–70 “limitations and prohibitions” provides that LPTA can be used only when:
- minimum requirements can be described and measured clearly and comprehensively;
- there is no (or minimal) value for proposals that exceed the technical minimum;
- there is little (or minimal) subjective judgment by the source selection authority as to the desirability of one offeror’s proposal versus a competing proposal;
- there is little chance that an offeror can provide additional characteristics that could provide value or benefit;
- there is minimal innovation realized from utilizing a different source selection method;
- goods are expendable in nature, are not technical, or will have a short shelf life;
- full lifecycle costs are considered (and documented) when utilizing LPTA; and
- the contract file is documented creating a justification for utilizing LPTA.
In addition, LPTA should be avoided “to the maximum extent practicable” when the government procures the following:
- information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, or other knowledge-based professional services;
- personal protective equipment; and
- knowledge-based or logistics services outside the United States.
LPTA is outright prohibited in three types of procurement categories:
- for personal protective equipment or aviation critical safety items where a lower quality item (or one that fails) can risk the warfighter;
- for engineering or manufacturing development for major defense acquisition programs; or
- auditing services.
Contractors can only hope that procurement officials will appropriately use LPTA for commodity products and commodity-like services. At the very least, contractors have additional leverage should they choose to protest.
If you need further guidance on the restricted usage of LPTA procurements, contact Cherry Bekaert’s Government Contractor Services Group.