New research and a survey of federal contracting employees and contractors found the use of lowest price, technically acceptable is here to stay. Vendors must figure out how to adjust to this new acquisition environment where innovation and value are not always an agency’s top priority.
New data from Govini, a market research firm, finds the number of lowest price, technically acceptable awards doubled from 2009 to 2013. Vendors also are seeing more and more agencies issue solicitations where price is the only or a major evaluation criterion. DoD, civilian agency official acquisition officials say LPTA is one tool in a large toolbox.
The three military department’s top acquisition officials say they are each undergoing examinations of their contract spending on services. The goal is to ensure that the current, highly-decentralized service contracting process is serving valid military missions.
The term lowest price-technically acceptable is a misnomer. LPTA contracts usually wind up costing federal agencies more than other kinds of contracts. That’s according to Eric Crusius — he’s a partner at Fed Nexus Law and his practice is in the federal contracting space. On In Depth with Francis Rose, he said federal agencies are pushing the LPTA concept too hard.
The government contracting community is still wary of the concept of lowest-price, technically acceptable contracts coming from agencies. But the deeper question is, what kind of value does an agency get? Rafael Borras is a senior advisor at AT Kearney, and former Under Secretary for Management at the Department of Homeland Security. He tells In Depth with Francis Rose government can learn from the private sector how value creation can be an alternative to simple budget cutting.
A provision tucked into the annual Defense authorization bill would order the DoD to look into how often LPTA is used, and whether DoD is following it’s own guidance on when and how to use it.
Objections to the use of lowest-price technically acceptable for contracts are growing, including Booz Allen Hamilton and CACI protests of DISA’s $17.5 billion ENCORE III solicitation and a new bill from two senators to restrict when the military uses this type of contract.
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.