GAO Reviews Progress Toward Reining In Use of LPTA

Published: October 03, 2019

Contracting Trends

Last week, GAO released a report on their evaluation of DOD and civilian agency use of Lowest Price Technically Acceptable (LPTA) contract evaluations and status of revising acquisition rules to provide more criteria for usage of LPTA.

When awarding contracts competitively, agencies have proposal evaluation options, one of which is best value, LPTA process.  GAO’s report found that DOD used LPTA for 25% of competitive awards in FY 2018 and civilian agencies used LPTA for 7% of competitive awards in the same time period. GAO used FPDS data to analyze competitive contracts and orders valued at $5 million or more for Army, Navy, Air Force, and DLA, VA, HHS, DHS, Agriculture and GSA to arrive at their statistics.  

The National Defense Authorization Act (NDAA) for FY 2017, as amended, included limitations on DOD’s use of the LPTA process and required DOD to revise its acquisition regulations (DFAR) to reflect new criteria for use of the LPTA process. The NDAA for FY 2019 required an update to the FAR to include similar LPTA use requirements for civilian agencies.

In summary revisions to both acquisition regulations are required to reflect the following criteria for use of LPTA:

Both Civilian and DOD:

  • The agency can clearly describe the minimum requirements in terms of performance objectives, measures, and standards that will be used to determine the acceptability of offers.
  • The agency would realize no, or little, value from a proposal exceeding the solicitation’s minimum technical requirements.
  • The proposed technical approaches can be evaluated with little or no subjectivity as to the desirability of one versus the other.
  • 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.
  • The contracting officer has included a justification for the use of the LPTA process in the contract file. 
  • The lowest price reflects full life cycle costs, including for operations and support.

DOD Only:

  • DOD would realize little or no additional innovation or future technological advantage by using a different methodology.
  • 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 NDAAs also specified certain products and services for which agencies are to avoid using the LPTA process to the maximum extent practicable.

Both Civilian and DOD:

  • Information technology services
  • Cybersecurity services
  • Systems engineering and technical assistance services
  • Advanced electronic testing
  • Audit or audit readiness services
  • Other knowledge-based professional services
  • Personal protective equipment
  • Knowledge-based training or logistics services in contingency operations or other operations outside the US including Afghanistan or Iraq

Civilian Only:

  • Health care services and records
  • Telecommunications devices and services

Defense and civilian agencies are in the process of revising acquisition regulations to include criteria and limitations for using the LPTA process. DOD published the DFAR final rule in the Federal Register on September 26, 2019. The proposed FAR rule affecting civilian use of LPTA was published in the Federal Register on October 2, 2019, with comments due by December 2nd.

Contractors can expect agencies to be more methodical and thoughtful about using LPTA evaluation criteria to conform to new FAR and DFAR regulations. At the onset of LPTA usage, the pendulum seemed to swing in favor of higher usage as an attempt to save money in federal contracting.  However, after experiencing some poor performance and over-usage, agencies are reining in their use of LPTA in favor of other best value evaluation methods for competitive procurements.