Lowest Price Technically Acceptable | The Contracting Education Academy

August 10, 2018 By cs

Death knell for using LPTA for services and other acquisition highlights in the NDAA

Every year the Defense Authorization bill is filled with golden nuggets of little noticed provisions that make a big impact on the federal acquisition community.

This year they range from a strong focus on making it easier for agencies to buy commercial items to mixed messages around the use of other transaction agreements to the ever increasing concerns about too many bid protests.

This is, by far, not a comprehensive list, but several that most federal and contractor employees interested in acquisition should know about.

The House passed the NDAA on July 26. The Senate is expected to take up the bill next week. House and Senate conferees agreed to the bill on July 23, clearing the way to passage.

Keep reading this article at: https://federalnewsradio.com/reporters-notebook-jason-miller/2018/07/the-death-knell-for-using-lpta-for-services-and-other-acquisition-highlights-in-the-ndaa/

October 11, 2017 By cs

Procurement may be trending toward value over price

The number of times federal agencies have requested lowest-price, technically acceptable (LPTA) bids in contract solicitations has shot up over the past decade, an examination of Bloomberg Government data shows.

Federal contract solicitations stating that awards will be made on the basis of LPTA source-selection procedures have steadily grown, from 920 in fiscal year 2008 to more than 12,000 in each of the past two fiscal years, according to Bloomberg Government data.

But contracting industry groups and, increasingly, members of Congress have been agitating for a best-value purchasing approach in more cases, taking into account other factors, including whether the benefits of higher-priced proposals are worth the extra cost.

This renewed priority for best-value procurements has been reflected in the fiscal 2017 and 2018 defense authorization bills in Congress, which significantly narrow the range of types of procurements in which the Defense Department can use LPTA as a guiding philosophy.

Keep reading this article at: https://about.bgov.com/blog/procurement-may-trending-toward-value-price/

August 16, 2017 By cs

Senate attempt to reduce protests misses the point

When it comes to federal procurement, the frequency and expectation of protests has had a palpable, costly, and sometimes deleterious effect on the process and those competing in it.

Most companies now add an extra six to 12 months to their revenue projections in order to account for possible protests.

There is good reason to believe (including surveys) that “low price/technically acceptable” (LPTA) procurement strategies are, with some frequency, driven by a desire to avoid protests, since protesting such procurements is near impossible.

And, of course, there have been cases where incumbents, having lost a re-competition, submit a protest and, as a result, effectively get a contract extension while the protest is decided.

All of these represent unintended and undesirable impacts of the protest process. As a result, many have believed for some time that significant remedial action is needed. This includes the Senate Armed Services Committee, which, for the second year in a row, has included provisions in the defense authorization bill that would require losing protestors to reimburse the government for the costs of a protest when none of the plaintiff’s allegations are sustained.

Keep reading this article at: https://washingtontechnology.com/articles/2017/07/25/insights-soloway-bid-protests.aspx

August 12, 2016 By cs

GAO sustains protests of $17.5 billion DISA contract

Encore III, a controversial contract before the Defense Department began soliciting bids from industry to purchase up to $17.5 billion in IT services, received its strongest rebuke yet – this time from the Government Accountability Office.

The contract supports the department’s Joint Information Environment, a massive IT modernization project to globally connect the military services and defense agencies to supply “information on demand,” as the RFP states.

GAO announced last week it upheld pre-award bid protests from contractors CACI and Booz Allen Hamilton on grounds that the Defense Information Systems Agency (DISA) – the Pentagon’s IT arm – failed on two grounds “to provide a reasonable basis for comparing the cost of competing proposals.”

Keep reading this article at: http://www.nextgov.com/defense/2016/08/gao-sustains-bid-protests-175-billion-disa-contract/130519

July 5, 2016 By cs

Court affirms ‘especially great discretion’ of contracting officers

The U.S. Court of Federal Claims has found that an Air Force contracting officer’s decision to use the lowest price technically acceptable (LPTA) acquisition strategy in a negotiated procurement was within the “especially great discretion” afforded to contracting officers.

Phoenix Management, Inc. contested an Air Force solicitation’s format, arguing that the LPTA approach did not represent the best value to the Government. According to Phoenix Management, the Air Force “failed to document specifically why” it believes that an LPTA methodology would result in the best value. The company contended that if the Air Force proceeded with the LPTA strategy, coupled with the solicitations’ past performance evaluation procedure, “there is simply no way … that [the Air Force’s] ultimate selection would result in a ‘best value.’” In addition, the plaintiff contended that the Air Force’s planned integrated assessment “necessarily involve[s] trade off evaluations” which “are expressly prohibited.”

In its defense, the Air Force argued that its decision to select the LPTA format was within the broad discretion afforded to agency contracting officers. The Air Force also took issue with the plaintiff’s argument that the solicitation’s integrated assessments require tradeoffs.

In its June 30, 2016 decision, the Court of Federal Claims noted that contracting officers “are entitled to exercise discretion upon a broad range of issues confronting them in the procurement process.” And in negotiated procurements, the Court asserted, “the regulations entrust the contracting officer with especially great discretion.” This discretion, the Court said, “extend[s] even to application of procurement regulations.”

The implications of this case mean that when a contracting officer (CO) determines that there is a reasonable expectation that best value will be obtained from the selection of a technically acceptable proposal, the CO may employ the LPTA methodology. Under the Federal Acquisition Regulation, “[a]n agency can obtain best value in negotiated acquisitions by using any one or a combination of source selection approaches” (FAR Subpart 15.101). Thus, COs have the authority to select the approach that will provide the best overall value to the Government, understanding that the relative importance of cost of price may vary.

In arguing its case, the Air Force determined that its requirements “have been stable for many years” and “are not expected to vary significantly from the current level.” The CO also found that the Air Force’s requirements “are well defined and performance will be closely monitored.” The Air Force noted that the solicitations further mitigate the risk with a two month orientation period. During this period, the awardee will “shadow the current work-force on a non-interference basis to observe the operations ….” The Air Force concluded that the “overall [performance] risk assessment is low.”

Phoenix Management disagreed with the CO’s conclusion and asserted the LPTA approach will not always represent the best value. In support of this argument, the company presented a hypothetical situation in which two offerors are technically acceptable with a nominal price differential but markedly different past performance. The company argued that an award to the offeror with a slightly better price over the offeror with significantly better past performance does not represent best value. Phoenix contended that once an agency selects the LPTA methodology, “[a] proposal is per se the best value if it meets the selection criteria and proposes the lowest price.” The Court, however, found that the company’s hypothetical had no bearing on whether the CO articulated a rational basis for the decision to utilize the LPTA methodology.

In making such a decision, the Court reviewed the agency’s stated rationale, considering “whether the contracting agency provided a coherent and reasonable explanation of its exercise of discretion ….” This standard does not require that a CO’s approach will always result in the best value. The Court limited its review to the process behind the agency’s decision, not potential outcomes. The Court took note of the fact that the CO articulated a rational basis for the decision to use LPTA, namely that the overall performance risk for the solicitations was low and that emphasizing the price factor through the LPTA format would secure the best value to the Government.

The Court also found that the Air Force’s integrated assessment of the solicitations’ evaluation factors did not necessitate tradeoffs. Indeed, Section M of the solicitation in question provided that the Air Force would award contracts to the lowest-priced offerors with an acceptable technical proposal, acceptable past performance, and reasonable/balanced pricing. Although the solicitation referred to this process as an “integrated assessment,” the terms clearly indicated that the Air Force would evaluate the non-price factors on an acceptable/unacceptable basis and would not conduct tradeoffs based on these factors.

Bottom line, the Court found that the CO’s decision to employ the LPTA format was within the “especially great discretion” afforded to COs making decisions in negotiated procurements.

(Phoenix Management, Inc. v. U. S. Nos. 16-78C & 16-77C, June 30, 2016)

Every year the Defense Authorization bill is filled with golden nuggets of little noticed provisions that make a big impact on the federal acquisition community.

The number of times federal agencies have requested lowest-price, technically acceptable (LPTA) bids in contract solicitations has shot up over the past decade, an examination of Bloomberg Government data shows.

When it comes to federal procurement, the frequency and expectation of protests has had a palpable, costly, and sometimes deleterious effect on the process and those competing in it.

Encore III, a controversial contract before the Defense Department began soliciting bids from industry to purchase up to $17.5 billion in IT services, received its strongest rebuke yet – this time from the Government Accountability Office.

The U.S. Court of Federal Claims has found that an Air Force contracting officer’s decision to use the lowest price technically acceptable (LPTA) acquisition strategy in a negotiated procurement was within the “especially great discretion” afforded to contracting officers.

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