quality | 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

December 13, 2019 By cs

New FAR rule expands counterfeit reporting obligations

The FAR Council has issued a Final Rule, setting forth new FAR provisions that require the reporting of certain counterfeit and suspect counterfeit parts and certain major or critical nonconformances to the Government-Industry Data Exchange Program (GIDEP).

This Final Rule comes more than five years after the rule was first proposed in the Federal Register in June 2014.

The FAR Council describes the Final Rule as “significantly de-scoped” from the version proposed in 2014, but it nonetheless constitutes a significant expansion of the existing counterfeit part reporting obligations, which to date have applied only to electronic parts under DOD contracts.

The new implementing clause is found at FAR 52.246-26.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2019/11/new-far-rule-expands-counterfeit-reporting-obligations/

November 28, 2018 By AMK

Pentagon lags on policing lowest price, technically acceptable contracts

Two years after Congress required clearer criteria on when the Defense Department could issue lowest price, technically-acceptable (LPTA) contracts, Pentagon contracting officers still lack adequate written guidance, the Government Accountability Office (GAO) concluded in a recently released audit.

Under the fiscal 2017 National Defense Authorization Act (Section 813), the department is required to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to reflect eight criteria that justify the sometimes-controversial use of LPTA’s for awards of $5 million or more. (The requirements governing their use were expanded in the fiscal 2018 version.)

***FAR Part 15 describes the use of several competitive source selection*** ***processes to meet agency needs, which include the LPTA process and*** ***tradeoff process on a best value continuum.***

Though this type of contract can be efficient and quick for obtaining supplies and services, competing contractors often complain that the vehicle can short-change quality.

Keep reading this article at: https://www.nextgov.com/cio-briefing/2018/11/pentagon-lags-policing-lowest-price-technically-acceptable-contracts/152955/

August 8, 2018 By AMK

Navy’s top acquisition priority stumbles out of the gate

The U.S. Navy’s $122.3 billion Columbia-class ballistic missile submarine program is off to an inauspicious start after faulty welding was discovered in several missile tubes destined for both the Columbia and Virginia-class programs, as well as the United Kingdom’s follow-on SSBN program.

**The future ballistic missile submarine Columbia, the lead boat in the next generation of nuclear missile boats.** (drawing courtesy of US Navy)

In all, 12 missile tubes manufactured by BWXT, Inc., are being scrutinized for substandard welds. Seven of the 12 had been delivered to prime contractor General Dynamics Electric Boat and were in various stages of outfitting, and five were still under construction. The Navy and Electric Boat have launched an investigation, according to a statement from Naval Sea Systems Command spokesman Bill Couch.

“All BWXT welding requiring volumetric inspection has been halted until the investigation is complete,” Couch said.

The bad welds came to light after discrepancies were discovered with the equipment BWXT used to test the welds before shipping them to GDEB, according to a source familiar with the issue.

The discovery of a significant quality control issue at the very outset of fabrication of Columbia injects uncertainty in a program that already has little room for delays. The issue is made even more troubling because it arises from a vendor with an excellent reputation, and raises questions about whether the Navy can deliver Columbia on time, something the Navy says is vital to ensuring continuous nuclear deterrent patrols as the Ohio class reaches the end of its service life.

Keep reading this article at: https://www.defensenews.com/breaking-news/2018/08/06/the-us-navys-top-acquisition-priority-stumbles-out-of-the-gate-after-bad-welds-discovered-in-missile-tubes/

October 11, 2017 By AMK

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/

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

The FAR Council has issued a Final Rule, setting forth new FAR provisions that require the reporting of certain counterfeit and suspect counterfeit parts and certain major or critical nonconformances to the Government-Industry Data Exchange Program (GIDEP).

Two years after Congress required clearer criteria on when the Defense Department could issue lowest price, technically-acceptable (LPTA) contracts, Pentagon contracting officers still lack adequate written guidance, the Government Accountability Office (GAO) concluded in a recently released audit.

The U.S. Navy’s $122.3 billion Columbia-class ballistic missile submarine program is off to an inauspicious start after faulty welding was discovered in several missile tubes destined for both the Columbia and Virginia-class programs, as well as the United Kingdom’s follow-on SSBN program.

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.

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