RGCI-New LPTA Restrictions 2019Section 880 of the National Defense Authorization Act (NDAA) included provisions restricting the use of the Lowest Price Technically Acceptable (LPTA) source selection criteria to only procurements where:

  1. the agency can comprehensively and clearly describe the minimum requirements expressed in terms of performance objectives, measures, and standards that will be used to determine acceptability;
  2. the agency would realize little or no value from a contract proposal exceeding the minimum technical or performance requirements set forth in the request for proposals;
  3. the technical approaches will require little or no subjective judgment by the source selection authority as to the desirability of one proposal versus another;
  4. the agency has a high degree of confidence that a review of proposals of other than the lowest bidder would not result in the identification of factors that could provide value or benefit;
  5. the contracting officer has included a justification for the use of an LPTA evaluation methodology in the contract file; and
  6. the agency has determined that the lowest price reflects total costs, including costs for operations and support.

When to Avoid LPTA Source Selection Criteria

Section 880 also requires that use of  LPTA source selection criteria be avoided in procurements that are predominantly for the acquisition of information technology services; cybersecurity services; systems engineering and technical assistance services; advanced electronic testing; audit or audit readiness services; health care services and records; telecommunications devices and services; other knowledge-based professional services; personal protective equipment; or knowledge-based training or logistics services in contingency operations or other operations outside the United States, including in Afghanistan or Iraq.

In its final proposed rule to amend DFARS implement these requirements, DoD also included these additional criteria for use of LPTA source selection:

  • there will be little or no additional innovation or future technological advantage using a different source selection process; and
  • the goods are predominantly expendable in nature, are nontechnical, or have a short life expectancy or short shelf life.

Additional Changes You Might See

As a result of these changes, contractors can expect to see a significant reduction in LPTA and sealed bid procurements even in situations where the procurement may meet the criteria for an LPTA. When guidance was changed to require Contracting Officers to justify commercial item determinations, we saw a significant reduction in FAR Part 12 usage because it was easier for the Contracting Officer to require proposal submission under FAR 15 than justify acceptance as a commercial item and risk someone questioning their judgment. Contractors can expect to see the same thing with respect to LPTA source selection.

For technically superior contractors, this should be a welcome change. While price is always going to be important, demonstrating higher technical value is may be much more important for many procurements than the price, particularly when competing with less technically capable bidders.

Performance Assessments Even More Important than Ever

The higher emphasis on technical considerations also makes it even more essential for contractors to closely monitor their performance assessments in the Contractor Performance Assessment and Reporting System (CPARS). Unfortunately, the government does not have the greatest reputation with respect to performance assessments, so contractors need to make every effort to ensure they are treated consistency and fairly in these evaluations and ensure the information in CPARS is accurate. Under LPTA source selection, a contractor with a satisfactory or adequate performance rating with the lowest bid would win the award over contractors with higher ratings. The new LPTA restrictions make this much less likely.  

Establishing the value of your technical superiority is also critical to give the contracting officer the ammunition needed to support the award selection. If needed, the Redstone team stands ready to assist in that valuation. Our experience is that it is much better for the contractor to compute that value and provide it to the contracting officer than to rely on the government to determine the value. You can bet that bid protests will increase dramatically when the lowest bidders are not awarded the contract. The contracting officer will need to be able to show the award was given to the best value bidder.

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Written by Robert Eldridge

Robert Eldridge Robert (Bob) Eldridge is a Director with Redstone Government Consulting Inc. He provides Government Contract Consulting services to our Government contractors primarily related to compliance with Federal Acquisition Regulations and Cost Accounting Standards, equitable adjustment claims, and business systems. Prior to joining Redstone Government Consulting, Bob served in a number of capacities with DCAA for over 32 years. Upon his retirement, Bob was a Regional Audit Manager with DCAA. Bob began his DCAA career in 1981 as an auditor-trainee with the Pratt & Whitney Resident Office in West Palm Beach, Florida. Bob served two three year tours at the Defense Contract Audit Institute teaching multiple contract audit courses including “Auditing Internal Controls”, “Technical Management of Audits”, and “Advanced Cost Accounting Standards” and writing Agency courses on Cost Accounting Standards and Equitable Adjustment Claims. He returned to the Eastern Region in 1999, holding various audit positions before ultimately becoming a Regional Audit Manager in February 2007. As Chief of the Eastern Region Quality Assurance Division, Bob was heavily involved in developing DCAA guidance related to auditor consideration of internal controls and risk assessment preparation. In 2012, Bob was assigned to the U.S. Senate Committee for Homeland Security and Governmental Affairs, serving as a subject matter expert on a wide range of federal contract and grant matters for Senator Susan Collins. During Bob’s tenure with DCAA, he had overall management responsibility for audits performed by over 200 employees. He was directly involved in conducting or managing a wide variety of compliance audits, including: forward pricing proposals, incurred cost submissions, business system internal controls, Cost Accounting Standards, claims, and defective pricing. Bob was also directly involved in complex quantitative methods applications, particularly regression analysis and improvement curve applications. Bob currently specializes in assisting clients with more complex DCAA audit issues related to business system internal controls and Disclosure Statements and with developing and maintaining government compliant accounting and estimating systems. Bob also provides expert advice on compliance with FAR cost principles and Cost Accounting Standards and assists with the more complex forward pricing proposals and equitable adjustment claims.

About Redstone GCI

Redstone Government Consultants are a team of the most senior industry veterans and the brightest new talent in the industry. Many have held senior government positions including leadership roles in the DCAA. Our new talents bring significant accounting and software experience along with fresh perspectives, inspiration and energy to our team. Through our leadership and combined experience, we provide a unique perspective, bringing both government and contractor proficiencies to bear and ensuring rock-solid government compliance for our clients.

Topics: DFARS Business Systems, DOD Contractors