Why Lowest Price Technically Acceptable Is Not All Bad (When Used Appropriately)

GovLoop and Integrity Management Consulting are proud to present a 12-part series called “Conscientious Contracting: A Thoughtful Approach to Acquisition and Program Management,” that aims to address common challenges and achieve new efficiencies in government procurement.

In a recent survey for our new acquisition guide, we asked the contracting community: “Have you experienced your organization not getting what it wanted from a project because it was procured using Lowest Price Technically Acceptable (LPTA)?” One respondent seemed to sum up the prevailing thought around LPTA:

“LPTA is not really Best Value. It is minimum requirements. No tradeoff is allowed, even when one offeror’s past performance is superior to a competitor’s. Contractor A has excellent Past Performance, while contractor B is only satisfactory. Then if they both meet the minimums, the award is made to the low offeror. Even if the price or cost differential is minute, say $100 dollars out of $1 million. Stupid.”

There have also been a number of posts on GovLoop over the last few months that address the use of LPTA as a source selection method in federal contracting. The approach always seems to elicit a mixed reception, but the balance of remarks mostly echo the survey respondent’s sentiments.

While it is true that some agencies are using LPTA when it is not the best vehicle, there must be some merit to LPTA or it would not be included in the FAR as an acceptable source selection approach. In fact, I noticed that Bjorn Miller, a Contracting Officer for the General Services Administration, provided a constructive, strategic perspective on LPTA in response to a GovLoop blog post, so I asked him to share more of his thoughts regarding the approach. Here’s what he shared with me (please note: Bjorn’s comments do not represent the opinion of GSA or any of its employees and the bold emphasis is mine):

“The use of the LPTA approach is dependent upon the government clearly articulating to industry what its minimum needs are. In my opinion, the government has a hard time identifying its minimum needs. If the government did a better job at asking and answering, “what exactly are our minimum needs?”, we would see an increase in the use of the LPTA approach.

I believe the government struggles with identifying its minimum needs for two reasons: 1) it is human nature to think you need more of something (i.e. speed, bandwidth, functionality, capabilities, etc.) than what you actually need to accomplish the mission, and 2) it is significantly easier to continue using the same methodology, terminology and assumptions when issuing the successor solicitation.

Essentially, program offices sometimes allow for scope creep during the solicitation writing phase by selling to the contracting office its need to see what industry can offer in terms of functionality and capabilities as opposed to setting the baseline first and informing industry that this is the absolute minimum and there is no need for more. The end result is solicitations that are vaguely written or lead industry to offer the government more than what it currently receives or needs. Furthermore, program offices claim and enforce the old adage, “if it isn’t broke don’t fix it”, by recycling old requirements documents. The process is cyclical in nature unless a change in culture presents itself.

To encourage the use of the LPTA approach, the contracting office has to be proactive early on in the process and hold the program office accountable. Personally, I invite all key stakeholders to the planning meetings so there is representation from the budget and funding offices, the program and end-user offices and legal counsel, to name a few. There have been instances when the program office was unaware of the escalation in contractual obligations over a span of a few years for the same requirements. An open and honest discussion driven by facts and consensus could move the government’s predilection for the trade-off approach when applicable, thereby saving the government and taxpayers money.”

Reinforcing Miller’s guidance, a new blog post titled “Getting LPTA Right” by John Coombs, Senior Fellow at Integrity Management Consulting, defines LPTA for what it is (and what it isn’t) and offers a specific example where LPTA is appropriate. Coombs’ makes three important clarifications on LPTA:

  • LPTA is a source selection process…best suited for products with clear specifications or simple services.
  • LPTA is not a price/cost reduction method.
  • LPTA is not a cure for inexperience.

I’d encourage you to read the full post, especially if you find yourself (a) defaulting to LPTA as the simplest source selection method, regardless of the procurement size or complexity, or (b) dismiss it out of hand because it’s led to poor results in a few instances.

Now it’s your turn to weigh in:

What’s been your experience with LPTA – especially when it’s worked well?

This blog was brought to you by Integrity Management Consulting, an award-winning small business and leading provider of major systems acquisition and program management support services to Federal customers. Integrity’s mission is to deliver exceptional results for government customers, employees, and the community, driven by a single value: Integrity.

Related Resources

Want More GovLoop Content? Sign Up For Email Updates

Leave a Comment

Leave a comment

Leave a Reply