Will low-price contracting make us all losers?

June 4, 2012

We are seeing a procurement strategy shift for technical and professional services bids brought about by procurement officials using lowest price, technically acceptable (LPTA) evaluation criteria rather than the more traditional best-value tradeoff criteria.

While there is certainly a place for the low-price strategy in federal procurements, it is definitely not suitable for procurements with complex services or uncertain performance risk. When the government applies the strategy to unsuitable procurements, both the government and the bidders lose. Here's what happens and what you can do about it.

When to use LPTA Evaluation Criteria

LPTA is actually a form of best value. In traditional best value procurements, the government allows tradeoffs among non-cost factors such as technical approach, management plan, past performance, etc. and cost when determining best value to the government. These tradeoffs give the government the latitude to award a contract to other than the lowest priced offeror when the tradeoffs show there is additional value to the government in these factors. When selecting the LPTA criteria for procurements, the government determines before the release of the request for proposals that there is no additional value in trading off the non-cost factors versus cost.

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