Lowest Cost Technically Acceptable | The Contracting Education Academy

January 26, 2017 By cs

GAO ruling lets GSA buy the USDA steak, not the mystery meat

The General Services Administration (GSA) may have just put the first nail in the coffin that eventually will bury the widespread use of lowest-price, technically acceptable (LPTA) contracts for services.

The Government Accountability Office’s decision to deny four protests of GSA’s Alliant 2 contracts for IT services could end up being a landmark ruling that is that first nail.

“Lowest-price technically acceptable has been disfavored among contractors for putting price over innovation. Now we have protesters who in essence claim that cost was only nominally and improperly considered in the Alliant 2 evaluation,” said Barbara Kinosky, managing partner of Centre Law & Consulting LLC. “We have seen DoD move away from LPTA. This is the first major requirement coming out of a civilian agency that is clearly saying, ‘Contractors, we are looking for smart over cheap. Give us the USDA steak, not the convenience store mystery meat.’ I am confident this is a trend we will now see more of since GSA has taken the lead in the technology area where we definitely need to excel.”

Keep reading this article at: http://federalnewsradio.com/reporters-notebook-jason-miller/2017/01/gao-ruling-lets-gsa-buy-usda-steak-not-mystery-meat/

February 22, 2016 By cs

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 26, 2015 By cs

Acquisition 101: When a bargain isn’t a bargain

When my wife and I purchased our first vacuum cleaner, we selected a cheap model. It met all the specs of what we needed, did a minimally acceptable job and lasted little more than a year before it died. Not learning the lesson that buying the first vacuum should have taught us, we immediately bought another cheap vacuum to replace the first one, and it died an early death about 18 months later. We finally did learn our lesson with the third vacuum and paid slightly more for a better vacuum that has lasted six years (and counting).

Much like our predicament with the rotating vacuums, federal contracting professionals are facing increasing pressure to purchase goods and services as cheaply as possible using a method commonly referred to as “lowest price/technically acceptable” (LPTA)—even if it means minimal acceptability. This push is laudable in theory, but the reality is often higher prices and a smaller pool of quality contractors, while robbing contracting officers of any discretion to choose a solution or product that is more cost-effective in the long term.

Keep reading this article at: http://www.govexec.com/contracting/2015/01/acquisition-101-when-bargain-isnt-bargain/102672/

About the authors: Eric Crusius, a partner with Fed Nexus Law, focuses on government contracts, cybersecurity, employment law and complex litigation. Mitchell Bashur, an associate at Fed Nexus Law, also contributed to this column.

June 5, 2013 By cs

‘Industry needs profits and margins to be successful’ — DoD deputy secretary

Lowest price will no longer rule the day in federal contracting at the Defense Department, as the latest iteration of its procurement strategy recognizes the need for industry to to make money, said Deputy Defense Secretary Ash Carter in a speech Thursday.

In comments made at D.C.-based Center for Strategic and International Studies, Carter was referring to Better Buying Power 2.0, the Pentagon’s effort to be more efficient and productive in the way the department buys goods and services.

The first version, introduced by former Defense Secretary Robert Gates in September 2010, sought to increase affordability in defense programs, provide incentives for productivity and innovation in industry through profit and partnership, promote competition, improve the effectiveness of services acquisition and reduce nonproductive processes and bureaucracy.

Keep reading this article at: http://www.bizjournals.com/washington/blog/fedbiz_daily/2013/05/deputy-defense-seretary-carter.html?page=all

March 21, 2013 By cs

AT&L chief: DoD in “damage limitation mode” due to budget cuts

The Defense Department is in damage limitation mode as it seeks to manage the effects of automatic budget cuts under sequestration, the Pentagon’s lead weapons buyer said last week.

Frank Kendall, undersecretary for acquisition, technology and logistics, told an audience at the Newseum in Washington he is concerned the contracting industry is losing professionals because of the cuts.

Kendall is “still hoping sequestration will be overturned,” he said at the conference on defense budget uncertainty sponsored by McAleese & Associates and Credit Suisse.

The Pentagon is required to cut $46 billion from its fiscal year 2013 budget under sequestration.

Deputy Secretary Ashton Carter told attendees the Pentagon is required to work through $487 billion in cuts.

Carter said he expects merger-and-acquisition activity to pick up within the contracting industry.

Kendall also said the Pentagon will seek to change its definition of low price technically acceptable as it is difficult to define what technically acceptable is.

“In some cases we will pay more for more value,” he said.

Keep reading this article at: http://www.executivegov.com/2013/03/frank-kendall-pentagon-in-sequestration-damage-limitation-mode

The General Services Administration (GSA) may have just put the first nail in the coffin that eventually will bury the widespread use of lowest-price, technically acceptable (LPTA) contracts for services.

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

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