best value | The Contracting Education Academy

February 25, 2021 By cs

New final rule limits use of LPTA

Businesses and consumers make complex trade-off decisions every day when buying and selling supplies and services.

Sometimes it makes sense to pay more or charge more for a supply or service when quality improvements, added features, or other considerations justify the price. Other times, paying more or adding features provides no meaningful benefit so we opt for the least expensive item that satisfies our needs.

The federal government uses this same framework, dubbed the “best value continuum,” in negotiated acquisitions. On one end of this continuum is a full trade-off, where non-price factors, e.g., quality and past performance, take precedence over price. On the opposite end of the continuum is the lowest price technically acceptable (LPTA) process. Under LPTA, the government determines its minimum acceptable technical requirements and then seeks to award a contract to the lowest priced offeror who meets the minimum requirements.

Federal agencies have been criticized for overusing the LPTA source selection process, based on the concerns that LPTA procedures chill innovation and hamstring agencies who could benefit from trading cost or price considerations for technically superior capabilities. The business community also criticized government reliance on LPTA to purchase safety-related items; such items should not be purchased based on minimum standards.

In response to these criticisms, Congress included Section 880 in the Fiscal Year (FY) 19 National Defense Authorization Act (NDAA), stating: “[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.”

Keep reading this article at: https://www.mondaq.com/unitedstates/government-contracts-procurement-ppp/1034008/you-get-what-you-pay-for-new-final-rule-limits-use-of-lpta

See Jan. 14, 2021 Final Rule affecting LPTA at: https://www.govinfo.gov/content/pkg/FR-2021-01-14/pdf/2020-29087.pdf

July 30, 2020 By cs

Verizon loses protest of use of LPTA

The Government Accountability Office has denied Verizon’s protest of the use of lowest price, technically acceptable (LPTA) source selection for telecommunications services under the $50 billion Enterprise Infrastructure Solutions (EIS) telecom and network modernization contract.

Verizon specifically protested requests for proposals by the Defense Information Systems Agency (DISA), arguing that the reliance on LPTA violated the 2017 National Defense Authorization Act, as well as the Defense Federal Acquisition Regulation Supplement, which both require the Department of Defense to try to avoid such source selection when acquiring information technology.

The telecom company suggested DISA instead use best value tradeoff (BVTO) source selection, which would see the task order awarded to the contractor offering the greatest value to the government — not the lowest-cost or highest technically rated offeror.

GAO rejected that idea.

Keep reading this article at: https://www.fedscoop.com/verizon-lpta-eis-protest-denied/

February 25, 2020 By cs

Contractor successfully uses GAO pre-award protest to modify solicitation

When the terms of a solicitation run contrary to the regulations, challenging the solicitation in a pre-award protest may provide contractors the chance to shift the tide in their favor before bids are submitted and an award is made.

In January 2020, the Government Accountability Office (GAO) sustained a pre-award bid protest brought by Noble Supply & Logistics, Inc. that challenged the terms of a General Services Administration (GSA) solicitation. Noble Supply & Logistics, Inc., B-418141, 2020 WL 289546 (Jan. 16, 2020). Noble Supply argued the RFQ’s price evaluation methodology, as written, failed to provide for an evaluation of which offeror presented the best value and the lowest overall cost alternative, in violation of FAR part 8.

In the RFQ, GSA asked holders of GSA 51V Hardware Superstore Federal Supply Schedule (FSS) contracts to bid on four blanket purchase agreements (BPAs) to provide hardware products and services to four military branches. For its price evaluation factor, the RFQ stated that GSA would evaluate price quotations “to ensure that offered pricing, to include flat rates and tiered volume discounts, is fair and reasonable.” The RFQ then stated that GSA would not evaluate whether the award was the “lowest-priced technically acceptable” (LPTA), nor would it conduct a “best value tradeoff source selection methodology.” Thus, GSA would only evaluate the quotes for price reasonableness to determine whether prices were unreasonably high.

Noble Supply argued that this price methodology was contrary to 41 U.S.C. sections 152, 8.404(d) and 8.405-3(a), which require GSA to award BPAs to the awardee that provides the “best value and results in the lowest overall cost alternative.” GAO agreed, explaining that “consideration of the lowest cost is an imperative when using the FSS” and therefore GSA is required to “reach a determination regarding which FSS vendor meets the agency’s needs at the lowest overall cost.” Noble Supply & Logistics, Inc., B-418141, 2020 WL 289546, at *6 (Jan. 16, 2020).

Keep reading this article at: http://www.mondaq.com/Article/891604

November 22, 2019 By cs

GAO clarifies reach of new LPTA restrictions

The National Defense Authorization Act for Fiscal Year 2017 and the NDAA for Fiscal Year 2018 imposed new limitations on when the Department of Defense can use Lowest Price Technically Acceptable source selection methods.

Just last month, the Department of Defense issued a final rule amending the Defense Federal Acquisition Regulation Supplement to implement those provisions. Now, in Inserso Corp., B-417791, B-417791.3, Nov. 4, 2019, GAO has weighed in on what counts as LPTA for purposes of those restrictions. This decision may indicate a potentially significant limitation on the reach of the NDAA provisions, new DFARS rule, and proposed FAR rule.

In Inserso, the protester argued that the 2017 NDAA restricted not only DoD’s use of an LPTA source selection process, but also the use of (what the protestor labeled) LPTA criteria within the evaluation process. Specifically, the protester challenged the fact that, under the RFQ, the agency would (1) “first rank quotations according to price, from lowest to highest”; (2) then “evaluate the five lowest-priced quotations as either technically acceptable or unacceptable” (while “reserving the right to evaluate additional quotations”); (3) then “evaluate only technically acceptable quotations under the past performance factor”; and (4) award the task order to the offeror “considered to be the Best Value based upon a price/past performance trade-off” (alteration omitted). According to the protester, the 2017 NDAA required the agency to conduct a tradeoff between price and technical factors — rather than relegating the technical factor to a pass/fail gating criterion.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2019/11/what-is-lowest-priced-technically-acceptable-gao-clarifies-reach-of-new-lpta-restrictions/

October 2, 2019 By cs

DoD finalizes restrictions on use of LPTA source selection process

Effective October 1, 2019, the Department of Defense (DoD) has issued a final rule restricting the use of lowest-price technically-acceptable (LPTA) solicitations in certain circumstances.

This rule implements statutory changes from the 2017 and 2018 NDAA that will greatly impact the use of LPTA procurements by DoD contracting officers.

For those who may not have been following our previous coverage of these changes, here is a quick summary. The 2017 NDAA established a new DoD policy of avoiding LPTA evaluations, when doing so would deny DoD the benefits of cost and technical tradeoffs. The 2017 NDAA limited the use of LPTA source selection based on six conditions, and suggested that, for a majority of procurements, DoD should use best-value procedures. The 2018 NDAA added two more requirements to the original six, and the echoed the 2017 NDAA in calling for limits to the use of LPTA source selection in DoD procurements. Until recently, DoD had not updated its regulations to reflect Congress’ intent to limit LPTA source selections, leaving contracting officers at DoD without detailed guidance.

DoD just issued a final rule amending the DFARS to reflect the relevant sections of the 2017 and 2018 NDAA, limiting the use of LPTA source selection procedures in DoD procurements. This final rule, once implemented, will make changes to the DFARS and the relevant regulations reflecting these changes will be found at DFARS 215.101-2-70.

Keep reading this article at: http://smallgovcon.com/statutes-and-regulations/dod-finalizes-restrictions-on-use-of-lpta-source-selection-process/

Businesses and consumers make complex trade-off decisions every day when buying and selling supplies and services.

The Government Accountability Office has denied Verizon’s protest of the use of lowest price, technically acceptable (LPTA) source selection for telecommunications services under the $50 billion Enterprise Infrastructure Solutions (EIS) telecom and network modernization contract.

When the terms of a solicitation run contrary to the regulations, challenging the solicitation in a pre-award protest may provide contractors the chance to shift the tide in their favor before bids are submitted and an award is made.

The National Defense Authorization Act for Fiscal Year 2017 and the NDAA for Fiscal Year 2018 imposed new limitations on when the Department of Defense can use Lowest Price Technically Acceptable source selection methods.

Effective October 1, 2019, the Department of Defense (DoD) has issued a final rule restricting the use of lowest-price technically-acceptable (LPTA) solicitations in certain circumstances.

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