About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (August 15, 2024)

handle is hein.crs/goveqjj0001 and id is 1 raw text is: Congressional Research Service Informing the legislative debate since 1914 Updated August 15, 2024 Defense Primer: Lowest Price Technically Acceptable Contracts Backround 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). ettng the Best Value for DOD 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 DOD is awarding a contract and considering cost as one of several selection factors. For example, DOD may also award contracts based on non- cost-related factors including 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 DOD is awarding a contract and considering price as the sole selection factor. The LPTA process uses price as the sole determining factor for all proposals deemed to be technically acceptable, or for a proposal that meets DOD's specified minimum performance requirements. 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. Benef ts to Us ng LPTA Some analysts argue that DOD may benefit from certain use of the LPTA process, including potential cost benefits, accelerated acquisition time frames, and fewer bid protests. Cost Benefits Under LPTA, DOD evaluates all factors other than price on an acceptable or unacceptable basis and does not consider levels of quality beyond that binary description. Some observers have asserted that, in circumstances where DOD cannot appreciably benefit from exceeding its stated minimum technical requirements, the use of LPTA may result in savings. Accel erated Time Frames In certain circumstances, the LPTA process may offer a more streamlined and simplified approach to procuring certain goods and services. Firms bidding for a contract may understand the specific thresholds of acceptability and can sometimes submit proposals more quickly. For DOD contracting officers, award decisions require relatively less subjective analysis compared to other source selection processes, and may accelerate decision-making. Fewer Bid Protests Contracts awarded on the basis of lowest price may be considered easier to defend against bid protests. In 2015, then Under Secretary of Defense for Acquisition, Technology, and Logistics Frank Kendall identified such a 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. When is LPTA Appropriate? According to the FAR, the LPTA process is considered best suited for contracts 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. Recent changes to statute and regulation have set forth specific requirements for the use of LPTA and circumstances where DOD should generally avoid the use of LPTA. Section 813 of the FY2017 National Defense Authorization Act (NDAA) (P.L. 114-328) required that DOD 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;

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most