Contractors have complained for awhile about the government’s overuse of lowest-price, technically acceptable (LPTA) contracts. NDAA FY17 severely limits the use of LPTA evaluations in DoD procurements.
To use an LPTA methodology, the following criteria must now be met:
- DoD is able to comprehensively and clearly describe the minimum requirements expressed in terms of performance objectives, measures, and standards that will be used to determine the acceptability of offers;
- DoD would receive little or no additional value from a proposal that exceeded the minimum technical or performance requirements set forth in the solicitation;
- Little or no specialized judgment would be required by the contract selection authority to discern the differences between competitive proposals;
- The source selection authority is confident the bids from the non-lowest price offeror(s) would not produce benefits of additional significant value or benefit to the Government;
- The Contracting Officer includes written justification for use of the LPTA scheme in the contract file; and
- DoD determines that the lowest price reflects full life-cycle costs, including costs for maintenance and support.
The NDAA also cautions against the use of LPTA for these three types of contracts:
- Contracts that predominately seek knowledge-based professional services (like information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, and audit or audit readiness services);
- Contracts seeking personal protective equipment; and
- Contracts for knowledge-based training or logistics services in contingency operations or other operations outside the U.S. (including Iraq and Afghanistan).
As a final tool to gauge compliance, Congress mandated that the DoD publish annual reports for the next four years that explain the rationale for all LPTA contracts exceeding $10 million.
