As the government moves into an era of tighter budgets, we’re seeing procurement strategies shift from the traditional “best value” award criteria where the government could award to other than the lowest priced offeror to an alternate evaluation criteria called “Low Price, Technically Acceptable (LPTA).”
LPTA appears to be good for taxpayers and detrimental to the services industry; however, the jury is still out on these issues. Some practitioners argue that all companies who provide government services do essentially the same thing, so setting standards for technical acceptability and then awarding to the lowest priced offeror is the right course of action for austere times.
Others argue that this practice will put the services industry into a death spiral as bidders undercut each other’s prices. Following the pricing death spiral will cause service quality to decline, awards will be made to marginally credible and financially irresponsible bidders, and everybody will lose in the end.
I’ll be writing an article on this topic in Washington Technology magazine and would like to hear about your first-hand experience with LPTA procurements.
- How did the government decide which bidders were technically acceptable and which were not?
- Was your firm eliminated unfairly when it came to technical acceptability?
- Did the low-price winner come back to negotiate pricing relief after contract award?
- Did the government get what it bargained for?
- Did contract performance suffer?
Please let us know your thoughts.
By Bob Lohfeld (RLohfeld@LohfeldConsulting.com)