The Defense Department is implementing a major change to the way it awards contracts to companies.
An April 1, 2016 memo from Claire Grady, DoD’s director of defense procurement and acquisition policy lessens the onus on source selection officials to justify paying more for their requirements than just lowest cost technically acceptable (LPTA). It also adds some transparency to how the department prices its requirements.
The policy change is part of the Better Buying Power acquisition reforms, which stated the LPTA requirements sometimes ended up costing DoD more money in the long run. A 2013 Market Connections and Centurion Research Solutions study found 65 percent of contractors and 43 percent of government workers thought LPTA hurt long term value for short term savings. Some critics said DoD places too much emphasis on LPTA contracts.
DoD now will try to make clearer the worth of delivering a capability above “technically acceptable” or the minimum requirement when awarding contracts.
Keep reading this article at: http://federalnewsradio.com/defense/2016/04/dod-tweaks-lpta-methods-save-money-help-industry/
See the April 1, 2016 memo from Claire Grady, DoD’s Director of Defense Procurement and Acquisition Policy, here: http://www.acq.osd.mil/dpap/policy/policyvault/USA004370-14-DPAP.pdf