To those who don’t work in procurement, the debate about the merits of Lowest Price Technically Acceptable (LPTA) vs. Best Value source-selection processes can be confusing. But like it or not, these concepts can play a critical role in the success of government programs, so it’s worth developing a basic understanding of the issues.
What is a source selection process?
A source selection process defines the criteria that contracting officers use to assess bids submitted by vendors in response to a request for quotes or request for proposals. After receiving a group of six bidders, the LPTA source selection process might lead to one bid being chosen, while the Best Value process would point to another. For any given procurement, the key is to pick the source selection process that best aligns with the goals of the program.
What is LPTA, and when does it make sense to use this approach?
As the name suggests, LPTA gives a lot of weight to price. With this method, you first assess all bids to see if they meet the technical requirements spelled out in the RFQ or RFP. Once you have a pool of technically acceptable bids, you look at which bid comes in at the lowest price.
LPTA is the preferred method of assessing a competed requirement, based on the contractor’s capabilities and their lowest bidder after solicitation.
Why has LPTA gotten a bad name in some circles?
LTPA criteria should not be used for evaluating difficult and complex procurements, such as critical safety components in military vehicles, airplanes and ships, as well as complex space and IT systems. That’s where a Best Value for Government approach comes in.
What makes a best value source selection process different?
Best Value is a process that spells out the significance for the agency of the evaluation factors to be considered, in order of importance. For example, the process might deem quality to be more important than past performance, while past performance outweighs price.
When should a contract use a Best Value determination?
The Defense Department, which often uses a Best Value process, is a good case study. In GAO Case of Noble Supply & Logistics, Inc., B-418141, 2020 WL 289546, at *6 (Jan. 16, 2020), the company that initiated the protest, Noble Supply argued the RFQ’s price evaluation methodology, as written, failed to provide for an evaluation of which offeror presented the best value and the lowest overall cost alternative, in violation of FAR part 8
Congress directed GAO to review DOD’s use of Best Value processes. GAO identified, among other things:
- The extent to which DOD used Best Value processes in fiscal year 2013
- The factors DOD considers when choosing a source selection process
- Training DOD provides to its acquisition personnel on source selection process
This type of evaluation makes the Best Value determination to place the importance where it belongs. For critical safety items, such as parachutes, the criteria might be ranked this way:
- This solicitation will consider highly favorable the technical evaluation factor.
- This solicitation will consider next to the technical evaluation factors the contractor performance for the past three years
- This solicitation will consider pricing the lowest evaluation factor
The acquisition strategy should have the specifications of the supplies or services to be solicited and should have those requirements listed in order of importance and referring to the technical specifications in the solicitation prior to request bids, so all the competitors have a clear understanding on how their proposals will be evaluated.
What should I take away from this?
As program managers or contracting specialists, need to understand the risks associated with each component of a major end-product, and place the Best Value on obtaining what is needed vs. what would cost us less. We cannot compromise specifications, materials, quality and safety over costs.
GAO Case: Noble Supply & Logistics, Inc., B-418141, 2020 WL 289546, at
*6 (Jan. 16, 2020), https://www.gao.gov/products/b-418141