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My Cup of IT: Minimum Wage…?

By Steve O’Keeffe — http://bit.ly/MGbtil

What’s the new four-letter word in government contracting? Yep, it’s LPTA – Low Price Technically Acceptable. The fowl language is flipping both government mission owners and contractors the bird. Sadly, contracting shops’ definition of TA is causing folks to call these contracts Tragic Acts.
Consider the recompete. An aggressive new contractor low bids an incumbent by 20 percent. The assailant’s proposal is predicated on rebadging all of the incumbent’s personnel – and hiring them at 30 percent less than they’re currently paid by the incumbent. That 10 percent is all profit margin. The government contracting shop awards to the assailant. The new contractor offers the existing workforce their same jobs at 30 percent less money. Who’d take a cut below their minimum wage? The existing workers quit their cubicles. The new contractor can’t perform. The government mission owner is compromised. Now the legal nonsense starts – and it’s not a quick process. As if it’s not enough that new primes are failing to honor their own teaming agreements and stealing from incumbent subcontractors…
Is it important that the government gets value for every dollar? Yes. Is competition good for America? Yes. Is LPTA making Uncle Sam penny wise…? Too often, yes.

Oh, and by the way, many good incumbent contractor companies, with strong past performance, are being ruined by this contracting lunacy. No wonder LPTA is being redefined as Lousy Product Tragic Act…

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Profile Photo Josh Nankivel

I’ve seen it personally!

Combine that with vague RFP’s and you either get what you’ve mentioned or a low bidder who comes back after winning and says “Oh, that wasn’t our interpretation of the RFP.” – then a year later you mod the contract at or above what other quality bidders put forth, having wasted a lot of time and money doing the reconcillation in the mean time. In the end, that means that high quality bidders who put forth the most reasonable estimate for quality work didn’t get the contract because of the low bidder’s bait-and-switch – intentionally or just because of the lack of information in the RFP.

Profile Photo Chris Cairns

Because the government has never been good at measuring value, they simply don’t understand the tradeoff between price and value. They also don’t understand the difference between a contractor and a consultant and they don’t know how to manage either very effectively.