In a proposed rule issued earlier this month, the Department of Defense (“DoD”) seeks to incorporate into the Defense Federal Acquisition Regulations Supplement (“DFARS”) restrictions on the use of the lowest price technically acceptable (“LPTA”) source selection method from the National Defense Authorization Act (“NDAA”) for Fiscal Years 2017 and 2018. This proposed rule makes clear that these NDAA-imposed restrictions are not going away any time soon, and that DoD contracting officers need to engage in a thorough and reasoned analysis before conducting an LPTA procurement.
Just as its name suggests, the LPTA source selection process prioritizes cost or price over technical capability — the agency will make award to the lowest-priced offeror that presents a technically acceptable proposal. Typically, agencies use the LPTA process to procure straightforward goods and services such as routine maintenance work or office equipment. In recent years, however, contractors have complained that agencies employ LPTA selection processes in inappropriate circumstances where qualitative differences really matter and technical superiority is worth a price premium.
The 2017 and 2018 NDAAs attempted to address these concerns by imposing significant limitations on an agency’s ability to employ the LPTA source selection method. Consistent with the NDAA restrictions, the proposed rule prohibits the use of LPTA procedures to: (i) procure personal protective equipment or aviation critical safety items when failure of the item could result in combat casualties, (ii) acquire engineering and manufacturing development for major defense acquisition programs where budgetary authority is requested beginning in FY 2019, and (iii) select an auditing contract. The proposed regulations further provide that the LPTA selection process should be avoided to the maximum extent practicable when acquiring: (i) knowledge-based services such as those related to information technology and cybersecurity, (ii) personal protective equipment, and (iii) knowledge-based training or logistics services that relate to contingency or other operations outside of the U.S.
And before employing LPTA procedures at all, a contracting officer must determine that each of these conditions is present:
- The minimum requirements can be described clearly and comprehensively, and in terms of performance objectives, measures, and standards necessary to determine the acceptability of offerors;
- No greater than “minimal” value will be realized from a proposal that exceeds the minimum technical or performance requirements;
- The offerors’ proposed technical approaches will require no greater than minimum subjective judgment by the Source Selection Authority (“SSA”) about the desirability of selecting one proposal over another;
- The SSA believes with a high degree of confidence that he or she will not identify characteristics or benefits by reviewing the technical proposals of all offerors that would provide value or benefit to the government;
- No greater than minimal future innovation or technological advantage will be realized from use of a difference source selection process;
- Goods sought to be purchased must be “predominately” expendable in nature, non-technical, or have a short life expectancy;
- The contract file must contain a determination that the lowest price reflects the full life-cycle costs of the products or goods being acquired; and
- The contracting officer must describe the circumstances justifying the use of the LPTA source selection process and document those considerations in the contract file.
These requirements apply to FAR part 15 negotiated procurements, Federal Supply Schedule orders, commercial item acquisitions, simplified acquisitions, and fair opportunity orders against multiple award indefinite delivery contracts.
The restrictions on the use of LPTA source selection imposed by the 2017 and 2018 NDAAs undoubtedly signals that contracting officers must think long and hard before using the LPTA source selection method. Although contracting officers are generally afforded a great deal of discretion in their acquisition planning decisions, the large number and relative subjectivity of the factors that contracting officers are required to consider may also make LPTA procurements more vulnerable to successful pre-award protests than they have been in the past.