best value | The Contracting Education Academy

February 22, 2016 By AMK

Is lowest-price-technically-acceptable on the decline?

Lowest-price, technically acceptable (LPTA) contracts aren’t going away – but data does suggest Federal agencies are cutting back on the practice.

LPTA deals took the market by storm as the government slashed budgets in the wake of the Great Recession. When the Pentagon unveiled its Better Buying Power initiative in 2009, the government signed about 4.2 million LPTA contracts, or 2.4 percent of Federal procurements. Three years later, the number of LPTA contracts had ballooned to 7.5 million, or 4.4 percent, according to an August 2015 study by Deltek Inc. of Herndon, Va.

Now LPTA appears to be in decline. According to Deltek’s analysis, LPTA utilization peaked in 2012 and declined the next two years running, a total drop of 24 percent from the 2012 peak. 2015 data has not been compiled.

Keep reading this article at: https://www.govtechworks.com/are-feds-retrenching-on-lowest-price-contracts-maybe

January 7, 2016 By AMK

Viewpoint: Reverse auctions don’t help agencies or taxpayers

Dozens of organizations representing hundreds of thousands of America’s small construction firms— whether minority-owned, women-owned, veteran-owned, HUBZone or just plain old small business—agree: using reverse auctions to procure construction services for the federal government does not save money, does not encourage quality and does not help small businesses.

Reverse auctions do not guarantee the lowest price for a contract. Rather, like in “The Price is Right” game show, they guarantee that one business will underbid others by just one dollar. A bidder has no incentive to offer its best price and may never have to offer its lowest price. Nevertheless, business do offer their best price for low price technically acceptable procurements and other contracting approaches conducted through sealed bids, where competitors do not know their competitor’s price. Data reporting any bid savings is, therefore, highly questionable.

Reverse auctions do not make sense for the procurement of many contracts, particularly those for professional services and especially construction services.

Keep reading this article at: http://www.govexec.com/contracting/2015/12/viewpoint-reverse-auctions-dont-help-agencies-or-taxpayers/124791/

December 11, 2015 By AMK

Air Force looking into data breach related to contract protest

The U.S. Air Force is looking into how classified data about a competition for a next-generation U.S. bomber found its way into a report published by Forbes magazine, according to several sources familiar with the issue.

Boeing Co and Lockheed Martin Corp this month filed a formal protest against the Air Force’s contract with Northrop Grumman Corp to develop the new long-range strike bomber, a deal worth up to $80 billion.

Loren Thompson, chief operating officer of the Lexington Institute think tank, published a detailed column on the Forbes website the day the protest was filed, saying the estimate that it would cost $21.4 billion to develop the plane was roughly twice what the competing industry teams had bid.

The level of detail included in the column raised concerns given the classified nature of the bomber program, according to three of the sources.

Keep reading this article at: http://www.reuters.com/article/2015/11/25/usa-airforce-bomber-idUSL1N13G01220151125#OpgexKK8s5BMjFK0.97

March 23, 2015 By AMK

AT&L chief provides guidance on appropriate use of LPTA source selection

The Department of Defense (DoD) Under Secretary of Defense for Acquisition, Technology and Logistics (AT&L) Frank Kendall distributed a memorandum to his department’s acquisition professionals on March 4, 2015, providing guidance on when to use lowest-price technically-acceptable (LPTA) contracts.

Notably, the guidance also speaks about how to apply LPTA competitions to acquisitions for professional services.

Kendall’s memo says that DoD should not use LPTA if it is willing to pay more for superior performance.

The memorandum is comprehensive in that it speaks to the types of contracts that DoD may use in LPTA procurements, including fixed-price, time and materials, and cost-plus fixed-fee contracts.

“LPTA is the appropriate source selection process to apply,” Kendall states, “only when there are well-defined requirements, the risk of unsuccessful performance is minimal, price is a significant factor in the selection, and there is neither value, need, nor willingness to pay for higher performance.” Kendall continues: “LPTA has a clear, but limited place in the source selection ‘best value’ continuum.”

Read the full AT&L memorandum at: https://www.pubklaw.com/wp-content/uploads/2015/03/LPTA-memo.pdf

March 4, 2015 By AMK

6 simple fixes for the federal procurement process

As the largest buyer of goods and services in the world, our government has a rigorous procurement process in place to protect the American taxpayer, designed to facilitate helping Uncle Sam buy what he needs to perform his myriad missions efficiently, effectively, and economically. Unfortunately, the federal government fails to spend taxpayer money wisely with such frequency that newspapers and television reports are rife with examples of overspending, failed projects and bloated contracts.

Procurement goes through reforms every few decades, but the current environment could not be worse. From the Brooks Act in 1972 to the Service Acquisition Reform Act in 2003, much has been done to address the “mechanics of procurement,” but little has been done to address the human aspect of procurement, either on the government or the contractor sides. From a $10 stapler to a $1.2 billion failed technology system, our government tries to legislate fixes, but it is hard to legislate human nature.

There are things that can be done without formal change; leaders need to lead, managers must manage, and the workforce must exhibit good judgment, be honest and realistic, achieve value, and learn to manage risk. Procurement personnel need to be well trained, their workload must be better managed, and they need to possess strong problem-solving skills. Contractors need to help the federal government with its procurement issues, provide the right solutions, and be realistic about what it can do.

Keep reading this article at: http://www.federaltimes.com/story/government/acquisition/blog/2015/02/20/procurement-fix-legislation-rule/23754523/

Lowest-price, technically acceptable (LPTA) contracts aren’t going away – but data does suggest Federal agencies are cutting back on the practice.

The U.S. Air Force is looking into how classified data about a competition for a next-generation U.S. bomber found its way into a report published by Forbes magazine, according to several sources familiar with the issue.

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