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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

Filed Under: Uncategorized Tagged With: best value, best value continuum, FAR, FAR Council, final rule, lowest price, lowest price technically acceptable, LPTA, NDAA, negotiated price, past performance, quality, service contracts, source selection, technical requirements, trade off, tradeoff, value

December 7, 2018 By AMK

DoD moving away from LPTA for IT acquisitions

The Department of Defense (DoD) published a new proposed rule in the Federal Register on Tuesday of this week that follows through on legislation to remove the lowest price technically acceptable (LPTA) acquisition methodology from IT and cybersecurity acquisitions, in favor of the tradeoff source selection process.

The proposed rule, open to comment until Feb. 4, 2019 would be implemented in the Defense Acquisition Regulation Supplement (DFARS), and is based on both the 2017 and 2018 National Defense Authorization Acts (NDAAs), which include language to define when LPTA is to be used.

While initially passed as part of Section 813 in the 2017 NDAA, the 2018 NDAA included some amendments to define when LPTA should be used.

Keep reading this article at: https://www.meritalk.com/articles/dod-moving-away-from-lpta-for-it-acquisitions/

See Proposed Rule by the Defense Acquisition Regulations System on 12/04/2018 here: https://www.federalregister.gov/documents/2018/12/04/2018-26306/defense-federal-acquisition-regulation-supplement-restrictions-on-use-of-lowest-priced-technically

Filed Under: Government Contracting News Tagged With: DFARS, DoD, IT, LPTA, NDAA, proposed rule, source selection, tradeoff

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