DOD Use of LPTA Procedures for Services in FY 2017

In compliance with the National Defense Authorization Act of 2017, the Government Accountability Office issued a report (#GAO-18-139) in November on the Department of Defense's use of lowest price, technically acceptable (LPTA) procedures for services contracts valued at more than $10M. The GAO’s report assesses the extent to which DOD used LPTA procedures for certain services and examines factors that contracting officials considered when deciding to use LPTA procedures.

The procurement data reviewed by the GAO resulted in the identification of 781 contracts worth $10M or more that the Army, Navy, and Air Force awarded in the first half of fiscal year 2017. GAO analysts then selected 133 information technology and support services contracts from this total and identified only 9 contracts (6.7% of the selected number) that used LPTA procedures. Of these contracts the GAO reviewed 7 deals, interviewed officials, and reviewed contract documents to determine why LPTA procedures were used. The GAO found during its review that contracting officials determined the government would not benefit from paying more than the lowest price for the services in question. Interviewed contracting officials also stated that they used LPTA, in part, “because the requirements were well-defined, non-complex, or recurring.”

What were those requirements? In one case, the Army used LPTA to award an $85M contract for construction management, engineering, and technical support provided by Afghan nationals for reconstruction projects in Afghanistan. In another case, the Air Force awarded a $38.2M contract for operation support services at an unnamed Air Force Reserve base, as well as two other contracts for operation support services at Air Reserve stations worth $27.9M and $24.7M apiece. Then there was an Army award of $17.1M for software source code/cybersecurity vulnerability assessments.

What reasons did contracting personnel give for making these service awards using LPTA procedures? In the case of the Army’s $85M construction services contract, the contracting official claimed the Army gained “no additional value … by paying a premium for these services and that the lowest price was the best choice.” Concerning the three Air Force contracts, “contracting officials stated that there is at least a decade of past experience with these requirements, and, as a result, the requirements are well known.”

As for the Army software vulnerability assessment contract, contracting officials told the GAO that the winning contractor is “required to perform a software review using several government approved code analysis tools and then characterize any potential vulnerabilities identified by the tools in terms of risk levels prescribed by established government cybersecurity standards. Army requirements officials stated that they determined there was no additional value to be gained from innovations in doing either task.” In short, although the work being done is a service, it has well-defined parameters that yield concrete results rendering it acceptable to use LPTA procedures.

Conclusions

Generally speaking, the GAO found that the DOD used LPTA procedures for a very limited number of services procurements. The GAO also appears to have been satisfied with the rationale provided by DOD contracting personnel for the awards made. DOD procurement guidance “states that LPTA procedures are typically for requirements that are well-defined, commercial, or non-complex products or services with a minimal risk of unsuccessful contract performance.” The GAO accepted that in these cases the awards made satisfied the letter of the law (so to speak), providing minimal risk to the government based on the nature of the required service. Do these conclusions mean that inappropriate use of LPTA by DOD contracting officials has been eliminated? Probably not, but in this case at least the GAO was satisfied that LPTA had not been used inappropriately for the required service.