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1 1 (January 31, 2020)

handle is hein.crs/govbexx0001 and id is 1 raw text is: 0S;0 Updated January 31, 2020 Defense Primer: Lowest Price Technically Acceptable Contracts When procuring goods or services, the Department of Defense (DOD) generally seeks to obtain the best value for the government by encouraging full and open competition, as required by the 1984 Competition in Contracting Act (P.L. 98-369, also known as CICA). Full and open competition occurs when all eligible prospective contractors are permitted to submit bids or proposals in response to a proposed contract action. Best value, when used in the context of government procurement, refers to the expected outcome of an acquisition that, in the government's estimation, provides the greatest overall benefit in response to the requirement (Federal Acquisition Regulation 2.101). CICA generally mandates that, whenever practical, DOD must obtain full and open competition through the use of competitive contracting procedures. Part 15.101 of the Federal Acquisition Regulation (FAR) establishes two primary types of competitive source selection procedures intended to obtain the best overall value for DOD: 1) the tradeoff process and 2) the lowest price technically acceptable (LPTA) process. The tradeoff process is generally used when cost is only one factor to be considered in awarding a contract. For example, DOD may award contracts based on non-cost factors such as quality and performance; a firm's technical or managerial expertise; or past performance. Each of these criteria may be evaluated on a sliding or pass/fail basis. The use of LPTA is appropriate when price is the determining factor in awarding a contract. Under LPTA, for all proposals deemed to be technically acceptable and therefore meeting DOD's specified minimum performance requirements, price is the determining factor in awarding a contract, with no consideration given to any other factors. Past performance does not need to be an evaluation factor when it is not relevant for the particular acquisition. In recent years, DOD has faced criticism for using LPTA instead of a tradeoff process in certain acquisitions. Congress has expressed concern regarding the perceived inappropriate use of LPTA and has passed legislation limiting DOD's use of LPTA. ien*elft z Lo sh-,gLT A number of analysts have identified specific benefits that LPTA may provide DOD, including potential cost benefits, accelerated acquisition time frames, and fewer bid protests. t Beefit, Under LPTA, all factors other than price are evaluated on an acceptable or unacceptable basis without consideration given to higher levels of quality. Observers note that, in circumstances where there is no appreciable benefit to DOD for exceeding its stated minimum technical requirements, the use of LPTA can potentially result in savings. In certain circumstances, LPTA may offer a more streamlined and simplified approach to procuring certain goods and services. Firms bidding for a contract know the specific thresholds and can sometimes submit proposals more quickly. Award decisions require little subjective analysis, potentially accelerating decision making. Contracts awarded on the basis of lowest price are considered easier to defend against bid protests. In 2015, then Under Secretary of Defense for Acquisition, Technology, and Logistics Frank Kendall acknowledged this benefit, stating that objective source-selection criteria are harder to contest successfully. However, he cautioned that source-selection criteria and acquisition strategies should not be designed around limiting the likelihood of bid protests. LPTA is considered best suited for situations in which: * contract requirements are well defined, simple, or reoccurring; * there is a low risk for poor performance; * there is little development work to be completed; and * there is no appreciable value to DOD for performance exceeding the technical requirements. As such, LPTA is more likely to be effective when contract requirements are clearly and comprehensively spelled out. Recent changes to statute and regulation have set forth specific requirements for the use of LPTA, as well as circumstances where DOD should generally avoid the use of LPTA. Section 813 of the FY2017 National Defense Authorization Act (NDAA) (as amended; see 10 U.S.C. §2305 note) mandates that DOD can only use LPTA if the following conditions are met: * minimum contract requirements in terms of performance objectives, measures, and standards are clearly identified; * there is little or no value in exceeding the minimum technical or performance requirements set forth in the proposal request; * there is little or no subjective evaluation as to the desirability of one proposal versus another; * there is a high degree of confidence that a review of technical proposals other than the lowest bidder would not result in the identification of factors that could provide value or benefit to DOD; * little or no additional innovation or future technological advantage will be achieved by using a different source selection process; K~:> p\w gnom ggmm mppm qq\ M , q 'M I 11\111WILiM,

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