Lowest Price Technically Acceptable (LPTA) procurements began to gain popularity in 2007 due to limited agency budgets. They grew to become some of the most widely used source selection methods by the Department of Defense (DoD) and were also quite common in the civilian space. The pricing pressures resulted in low-ball bids and negatively impacted quality.By 2014, frustration from industry had grown intense. Government contractors were forced to consolidate through mergers and acquisition -- some went out of business completely. At that point, the government realized LPTA may not be appropriate for many procurements and, in 2015, the pendulum started to swing back in the other direction.
While LPTA seems to be less prominent today, is it more in word than in fact? Some agencies are still using LPTA extensively, based on their perception that it is faster and minimizes the chance for protests.
Industry Response
- Decrease in competition as some firms decide LPTA solicitations are not worth pursuing
- Low bids resulting in multiple change orders and costing the government more in the long-term
- Reduction in pay and benefits to make the delivery sustainable -- damaging corporate culture
When is LPTA Appropriate?YES: Resale of branded products or other commodities with vital characteristics that can be readily documented
NO: Service delivery requiring judgement, change, or customization We summarized the key takeaways from our recent Executive Roundtable panel discussion in a free whitepaper. To learn about some of the LPTA core challenges and potential solutions, download "LPTA: Drifting Away or Hiding Beneath the Surface?"
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