Need-to-Know Facts about Lowest Price Technically Acceptable Contracts
As of October 1, 2019, DFARS 215.101-2-70 limits the use of Lowest Price Technically Acceptable (LPTA) in source selection criteria in Department of Defense (DoD) solicitations. The next step is to expand the application of these limitations to all civilian agencies as well. The proposed language explains when using LPTA would be prohibited, should be avoided, and when it may be used appropriately in a solicitation.
Let’s look at what this ruling means and what implications may result from its widespread use.
What is LPTA?
There are two primary types of source selection procedures specified in the Federal Acquisition Regulation (FAR):
- Tradeoff – Weighing cost and value, an agency selects offers that deliver the best value for the best price
- LPTA – An agency selects the lowest price offer that meets the minimum required specifications
Under Which Circumstances can LPTA be Used?
Briefly stated, LPTA should only be used if and only if all of the following apply:
- The minimum requirements are made clear
- Exceeding the minimum requirements will not produce better results
- The approach used will not influence the desirability
- It is expected that proposals will differ only on price
- No technical or innovative advantages are possible
- Procured goods are expendable or have a short shelf life
- The lowest price will cover the full life-cycle costs of acquisition
- The contracting officer documents justification for using LPTA
When is it Better Not to Use LPTA?
LPTA must be avoided in circumstances that would deny the Federal Government the benefits of cost and technical tradeoffs in the source selection process. In brief, when acquiring the following goods and services, contracting officers must avoid using LPTA to the maximum extent practicable:
- Personal protective equipment
- Knowledge-based professional services such as advanced electronic testing, cybersecurity, information technology, systems engineering, and technical assistance
- Knowledge-based training or logistics services required for contingency or overseas operations
Under What Circumstances is LPTA Prohibited?
In summary, contracting officers are prohibited from using LPTA in solicitations when:
- The possibility exists that using a lesser quality acquisition may result in combat casualties
- Acquiring engineering and manufacturing development for a major defense program for which budgetary authority was requested in the FY 2019 budget.
- Auditing contracts
How Do You Feel the LPTA Rules Will Impact Acquisitions?
David J. Berteau, President and CEO of The Professional Services Council, recently stated, “Applying these LPTA restrictions government-wide will ensure all Federal agencies are using the best procurement approach to access innovation from the services sector and obtain better results and value for the taxpayer dollar.”
Do you agree?
If you have any concerns or questions about the proposed LPTA amendments to the FAR, the DoD, General Services Administration, and National Aeronautics and Space Administration are interested in hearing your thoughts.
Submit your comments to the proposed LPTA amendments here no later than December 2, 2019.
Natalie Komitsky is the Content Marketing Manager at Management Concepts. For more than ten years, she has been creating compelling content that tells stories, communicates ideas, and captivates readers. She holds a Bachelor of Arts degree in English, Nonfiction Writing, and Editing from George Mason University.