Eliminate Low Price Technically Acceptable Procurements.
Why bother with LPTA? Most RFPs do not set the technical bar high enough to prevent gaming and the risk of poor performance. If you want LPTA, just do an auction. Best Value affords govt. clients the ability to do cost and performance trade-offs.
Cathy McGrane
shared this idea
11 comments
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Jaime Gracia commented
LPTA should be FFP, along with a strong oversight and governance function by government to hold the contractor's feet to the fire, and prevent repeated mods because a contractor can not do the work for the price. It really is that simple, but none of us are naive enough to think this will change anytime soon. Until both contractors and government PMs are held accountable for poor performance, we will continue to see poorly performing programs that started with buyer's remorse and low-priced bids, as opposed to truly best value and price realism (a.k.a. sanity checks) on legitimate pricing.
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Don
commented
COncur with Donna. A fundamental problem with the process is that it is so time consuming, and expensive, that the winner is forced to suceed by the agency - it is a bridge too far to term for cause on an underperforming contractor, so the agency must accomodate cost increases and perfromance failures. This behavior has become institutionalized on both sides - how can we correct this?
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Donna
commented
Let's not forget the contractor who wins LPTA and then goes back for more money because that low price was a mis-calculation in the scope. I bet this has been a strategy in some cases. Once the customer is into the contract waist high, they have no choice but to fund such a contractor. Past Performance really must be stellar, as in great grades and numerous successes.
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Cindy Brockwell
commented
Amen Ed - I just saw this happen on a HUGE requirement where half the RFP was focused on corporate capability, financial strength, ability to perform, OCONUS expertise, etc etc etc - then it was awarded to a very small company in business 3 years - it was impossible for the prime to be able to perform 50% or more of the work - but the sub held them up...oh and one of the financial strength criteria was that the sub could not "hold you up". Another low price award to a shell/start up firm - very high risk to the government.
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Cindy Brockwell
commented
Even in government, you get what you pay for....we are all interested in lower prices, etc. - with some of the initiatives in play in the past two years, it's more gaming than actually lower prices. LPTA results in price "shoot outs" which doesn't benefit anyone and often keeps highly qualified firms from wasting valuable resources when they know they cannot provide appropriate resources and underbid companies "buying in". Once I had a Director of Contracting tell me they kept selecting this one company because they wrote a good proposal and had lowest prices....so why they didn't go to Best Value to obtain the support they really needed beats me. Granted this was before PPIRS, etc. but still - this happens everyday.
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Ed Rinkavage
commented
In reality, all procurements have turned into LPTA regardless of the "Best Value" process. Over the last two years, I have seen "Best Value" procurements dwindle from true best technical value to "low bid technically acceptable" in a best value procurement. Furthermore, competitive multipliers have dropped from a 1.9-2.0 range to a 1.55-1.60 range. Is industry more competitive because of the change in landscape? No. Shell companies with no infrastructure, minimal past performance and low bid solutions are receiving the awards. Accordingly, the customer is not receiving the solutions nor the quality of corporate and project personnel to perform i.e., no continuing education, no proficiency training, etc.
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Cathy McGrane
commented
You all are correct, eliminate was too strong a word perhaps, done in a moment of frustration over one of our procurements going that way ; ) I agree with the comments below, LPTA should be used only where appropriate and the RFP has to be very clear about what constitutes technically acceptable.
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Chuck Viator
commented
To amplify on Don's wisdom, born of experience, the acquisition process should always reflect the correct constructs based on "real" requirements. Often, a lack of experience, personnel / time result in choosing what appears to be the most expedient acquisition strategy - when in truth it is not when you consider the full contract/program life cycle. This is not a simple problem and there are no easy answers - OFPP, the Congress and GAO oversight processes, the agencies and the contractors need to stop looking for easy answers and quick results and work together to fix a long standing problem. Whether [or not] you agree with the IT-AAC, it has been unwavering in its attempt to create an open dialog between industry and Government stake holders to facilitate acquisition reform. I believe this is the only approach that will result in reform, provide opportunity for all and gets the right products/services in time to support the various government missions and restores faith in the acquisition process.
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Cindy Brockwell
commented
Agencies are forced to award to companies based on price which this mechanism is utlized. It sends a message to industry that price is the major factor - for high risk, OCONUS deployment, and various other critical requirements, this is not appropriate but is being used. Newer companies with little experience in government contracting are winning these low price procurements with high risk to the government....experienced bidders offering "reasonable" and "realistic" pricing are eliminated, which doesn't benefit the government. If LPTA is utlized, both cost realism and realistic pricing should be mandated in requirements and able to be supported prior to award.
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LPTA is still a useful tool, but it is the requirements that need to be properly defined to allow for selection on cost. LPTA is one side of the best value continuum, with tradeoff process on the other, just to clarify. Only through allowing industry to submit innovative solutions can differentiation be possible, along with proper evaluation criteria.
How do we expand and refine source selections such that low cost is not the standard, regardless of which best value approach is used?
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Don Arnold
commented
"Eliminate?" Seems draconian. "Use only when appropriate" makes more sense
