In the previous administration, one of the things that became popular in the drive to save the government money was the use of an evaluation process or technique called LPTA, or least price technically acceptable.
So what was different about this? Instead of doing a detailed review of the technical proposal, technical approach, management approach, past performance, etc., all those factors were lumped together and made into a pass/fail or technically acceptable criteria.
What further assisted the contracting officers and the government was that under an LPTA evaluation, you could start by evaluating the least priced proposal and if their technical approach was acceptable, then you didn’t need to even look at the rest of the proposals.
So if, for example, I got 10 proposals, and I started out with the very first one that was the lowest cost, and that proposal represented a technically acceptable approach, then I didn’t have to review the other nine proposals. Clearly this is an enormous saving of time and energy for the contracting officers and everyone else.
On the other hand, what eventually came to happen, was that people were awarded LPTA contracts and then were unable to perform because their rates were too low. So while the contracting officers were happy because they got more work done, the people in the program offices who had received these kinds of awards on their contracts were unhappy because the people couldn’t do the work at the price they’d bid.
So a new set of rules has been implemented, explained well by Jeff Kinney at WashingtonExec, which implement criteria from NDAA 2017 that make it harder to justify an LPTA approach. This will ensure that procurements that are solving more complex problems that require creative and innovative solutions will be evaluated under ‘best value’ criteria rather than LPTA.
As Kinney explains, the ‘best value’ approach “allows the government flexibility to determine the best mix of price and capability, rather than merely accepting the lowest bid that meets minimum criteria.”
Frankly, only time will tell whether it works out correctly.
