2018 NDAA Bans Some LPTA Procurements

In 2017, Congress placed limits on the utilization of Lowest-Price Technically-Acceptable procurement procedures in Department of Defense acquisitions.

The 2018 National Defense Authorization Act continues this trend by completely prohibiting the use of LPTA procedures for certain major defense acquisition programs.

As we covered last year, the 2017 NDAA included a presumption against the use of LPTA procedures for DoD procurements unless certain criteria were met. The 2017 NDAA also cautioned against the use of LPTA procedures in procurements for knowledge-based professional services, personal protective equipment acquisition, and knowledge based training services in contingency operations outside the United States.

Section 832 of the 2018 NDAA continues this trend by outright prohibiting the use of LPTA procedures for major Department of Defense engineering and development programs. Specifically, Section 832 provides the following instruction:

The Department of Defense shall not use a lowest price technically acceptable source selection process for the engineering and manufacturing development contract of a major defense acquisition program

This raises an important question: What constitutes an “engineering and manufacturing development contract of a major defense acquisition program?” To answer that, we need to look at two separate definitions.

First, the definition for “Engineering and Manufacturing Development Contract” is found in Section 832 of the 2018 NDAA, and refers to “a prime contract for the engineering and manufacturing development of a major defense acquisition program.”

Second, the definition for “major defense acquisition programs” is found in 10 U.S.C. § 2430(a) and refers to a procurement that is not classified and either has been designated a major defense acquisition by the Secretary of Defense; or the estimated total expenditure for R&D, testing, and evaluation will exceed $300 million; or the total program cost will exceed $1.8 billion.

Using these two definitions to read Section 832, LPTA procurement procedures may not be used for Department of Defense prime contracts for engineering and manufacturing development that are either flagged as major defense acquisition programs, or will exceed $300 million in development costs or $1.8 billion in total program costs.

The limitation in Section 832 is only triggered at high dollar thresholds, so the impact it will have on Department of Defense acquisitions is likely minimal. That being said, Section 832 is important because it clearly signals Congress’s desire to further limit the use of LPTA procedures in Department of Defense procurements. Unlike the 2017 NDAA, which merely created a presumption against LPTA procedures, the 2018 NDAA bans LPTA procedures completely for a category of acquisitions. We’ll be keeping an eye out to see whether Congress expands the list of “no LPTA” acquisitions in future years.

Section 832 goes into effect for Fiscal Year 2019.

It’s that time of year where families gather; friends celebrate the New Year; and SmallGovCon recaps interesting features of the new NDAA. We’re still trying to get that last one to catch on. Check back regularly as we continue to cover notable provisions in the 2018 NDAA.