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You are here: Home / Government Contracting News / LPTA contracts gaining favor among agencies, but give vendors less incentive to innovate, study says

November 6, 2013 By AMK

LPTA contracts gaining favor among agencies, but give vendors less incentive to innovate, study says

Lowest price technically acceptable procurements have been gaining favor  among agencies, but that gives vendors less incentive to be innovative if the  approach costs more, an Oct. 24 Market Connections and Centurion Research study says.

Under LPTA, agencies focus more on price than on past performance as long as  the vendor meets minimal job requirements. So if a vendor comes to an agency  with a unique solution that costs more than a competitor who comes with a more  basic solution, the agency is more likely to choose the cheaper solution as long  as it meets the minimum requirements.

The practice has been utilized by the Defense Department through its Better  Buying Initiative, the study says, but has proliferated through other agencies  as well.

The study showed that of the $27 billion in procurements it analyzed, the  Veterans Affairs Department was the biggest user of LPTA outside of the DoD.

Keep reading this article at: http://www.fiercegovernment.com/story/lpta-contracts-gaining-favor-among-agencies-give-vendors-less-incentive-inn/2013-10-28

 

Filed Under: Government Contracting News Tagged With: Better Buying Power, competition, DoD, innovation, lowesr price technically acceptable, LPTA, price analysis, pricing, VA

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