DOD’s Long-Awaited LPTA Regulations Expected in Fourth Quarter of FY 2019

FCPAFor a number of years now, Lowest Price Technically Acceptable (LPTA) source-selection procedures have come under fire for overuse and misuse at the same time budget constraints make LPTA methods more enticing to some cash-strapped agencies.

In an LPTA procurement, the Government evaluates proposals for mere technical acceptability under the solicitation’s stated evaluation criteria.  Of the technically acceptable proposals received from eligible offerors, the Government then awards the contract to the lowest-price proposal, without considering any additional value that more expensive proposals may provide.  In an LPTA acquisition, it does not matter that the second least expensive proposal may have three times more technical merit than the lowest-price technically acceptable proposal.  Even if that technically superior proposal is only a dime more expensive, the Government is required to make the award to the acceptable proposal that is ten cents cheaper.

Some of you may remember that, way back in 2016, Congress passed the National Defense Authorization Act (NDAA) for 2017, requiring the Department of Defense (DOD) to revise the Defense Federal Acquisition Regulation Supplement (DFARS) within 120 days to require DOD contracting officers to ensure the following six criteria are satisfied before issuing a solicitation on an LPTA basis:

  1. DOD can clearly describe the minimum requirements in terms of performance objectives, measures, and standards that will be used to determine acceptability of offers.
  2. DOD would realize no, or little, value from a proposal exceeding the solicitation’s minimum technical requirements.
  3. The proposed technical approaches can be evaluated with little or no subjectivity as to the desirability of one versus the other.
  4. There is a high degree of certainty that a review of technical proposals other than that of the lowest-price offeror would not identify factors that could provide other benefits to the government.
  5. The contracting officer has included a justification for the use of the LPTA process in the contract file.
  6. The lowest price reflects full life-cycle costs, including for operations and support.

In 2017, the NDAA for 2018 added two additional criteria contracting officers must consider:

  1. DOD would realize little or no additional innovation or future technological advantage by using a different methodology.
  2. For the acquisition of goods, the goods being purchased are predominantly expendable in nature, nontechnical, or have a short life expectancy or shelf life.

The Government Accountability Office (GAO) noted in a recent report that here we are two years after the initial law took effect, and DOD still hasn’t gotten around to issuing the DFARS amendment that was due no later than April 2017.  In response to the report, DOD essentially gave itself another one-year extension to the 120-day requirement, stating that it anticipates publishing a final rule sometime in the fourth quarter of Fiscal Year 2019.

Until DOD updates the DFARS, agencies are not required to consider the eight statutory criteria outlined in the 2017 and 2018 NDAAs.  That’s not to say that the Federal acquisition workforce is flying blind, as DOD’s current internal Source Selection Procedures (last updated in early 2016, before the statutory changes) provide some guidance on LPTA use, and FAR 15.101-2 provides some minimal direction.  And, according to the GAO report, many DOD agencies are already considering most of the eight criteria even though the regulations don’t yet require them to do so.

Prospective offerors hoping to steer a planned procurement away from (or toward) LPTA methods may have some success using the eight criteria to advocate for a particular approach.  But they’ll find it nearly impossible to force an agency’s hand through a pre-award bid protest – at least, until the final regulations are promulgated.