Trends in LPTA Procurement
Published: September 02, 2015
The increased emphasis on the use of Lowest Price, Technically Acceptable (LPTA) contracts by federal agencies has been a major factor in the federal contracting market landscape for several years and has generated significant discussion among contracting firms and agency contracting and program officials alike. Talking with people on both sides of the contract equation and looking at actual contract spending data reveals some trends.
Fiscally-challenged federal agencies looking to stretch their IT dollars are using LPTA acquisitions as means to achieve value and reduce the cost of contracted IT goods and services while simplifying acquisitions and reducing the risk of award protest. Yet, the end results have been mixed and LPTA use has generated divergent opinions among government and industry professionals.
Deltek has taken a focused look at the use and impact of LPTA on the federal procurement market to identify the trends associated with its use. Informed by first-hand government and industry thought-leader interviews and historical contract spending in the use of LPTA, we were able to identify the numerous trends, policies, and budget and technological factors involved as well as the risks and strategies for effectively mitigating such risks.
Some of our high-level observations on the use of LPTA in the federal market include: (See chart below.)
Other key findings of the analysis include:
- The overall use of LPTA appears to be declining as scrutiny increases. However, its use within services contracting remains steady at approximately 30% of LPTA-related procurements.
- From FY 2009-2014, an average of 18% of LPTA procurements were for IT products and services.
- A combination of pressure on agency budgets, the standardization of technology, and growing shortage of seasoned acquisition professionals in government is driving the use of LPTA.
- Although DOD represents the majority of LPTA-related procurements discovered (approximately 60%), growth of LPTA use has been faster within civilian agencies (55% vs. 24% within DOD) between FY 2009-FY 2014.
- If misused, LPTA has the potential to harm the industrial base supporting the federal government by driving contractors out of the public sector.
For more of our analysis and findings, including historical LPTA contract use at specific federal agencies, check out our latest report, The Lowest Price, Technically Acceptable (LPTA) Procurement Landscape. (Your Deltek member login and password are required to view the report.)