GAO: DOD Should Clarify Criteria for Using LPTA

Over the last few years, SmallGovCon has covered the Congressionally-mandated march away from use of lowest-price technically-acceptable procurements at the Department of Defense. But although Congress has restricted when DOD might use LPTA criteria, the Department has not followed this mandate.

A recent GAO report highlights DOD’s struggle. As of September 2018, DOD has not yet revised its regulations to reflect certain statutory restrictions against LPTA awards and, as a result, DOD contracting officers believe they are not yet required to follow these new requirements.

Candidly, I’m not so sure. But in any event, GAO’s report issued a couple of recommendations to help DOD fully implement the restrictions against LPTA procurements.

Let’s take a look.

As our avid readers might recall, the 2017 National Defense Authorization Act sought to restrict DOD’s use of LPTA criteria to procurements where the following six criteria are met:

  • DOD can clearly describe the minimum requirements in terms of performance objectives, measures, and standards that will be used to determine the acceptability of offers;
  • DOD would realize no, or little, value from a proposal exceeding the solicitation’s minimum technical requirements;
  • The proposed technical approaches can be evaluated with little or no subjectivity as to the desirability of one versus the other;
  • There is a high degree of certainty that a review of technical proposals other than that of the lowest-price offeror would not identify factors that could provide other benefits to the government;
  • The contracting officer has included a justification for the use of the LPTA process in the contract file; and
  • The lowest price reflects full life-cycle costs, including for operations and support.

The following year, Congress added two more criteria that must be satisfied before LPTA can be used:

  • DOD would realize little or no additional innovation or future technological advantage by using a different methodology; and
  • For the acquisition of goods, the goods being purchased are predominantly expendable in nature, nontechnical, or have a short life expectancy or shelf life.

Congress further required DOD amend its acquisition regulations (known in the industry as DFARS) to implement these regulations. But as GAO noted, DOD’s amendments are long overdue. Problematically, DOD contracting officials believe that, until DFARS is amended to reflect these requirements, they are not required to follow them.

This belief is reflected in statistics. Based on a random sampling of DOD awards (valued at $5 million or greater) in 2017, GAO estimated that 25% of contracts and 29% of orders were issued under LPTA criteria.

Notwithstanding this relatively high number of LPTA awards, DOD believes its personnel are largely following the noted restrictions. That is, DOD noted its personnel routinely consider the anticipated value in exceeding the stated requirements before deciding to issue a solicitation on an LPTA basis. For other criteria—like the requirement for a written justification and approval before using LPTA—DOD has not yet started complying.

DOD officials acknowledged confusion about how to implement some of the new requirements. For example, contracting officials were confused about what it meant for goods to have “a short life expectancy,” and how to implement this requirement in their acquisitions. Still other officials were confused about whether the requirements applied to orders issued under multiple-award IDIQ contracts.

To address this uncertainty, GAO issued two recommendations. First, GAO recommended that DOD clarify how contracting officials are to apply the LPTA criteria to goods that are expendable, nontechnical, or otherwise have a short shelf life. GAO suggests that these criteria should be further defined in DOD’s upcoming DFARS amendments. Second, GAO also suggests that DOD clarify how contracting officials should assess “full life-cycle costs” as part of an acquisition.

GAO did not make any recommendation, however, as to the timing of the forthcoming DFARS amendments. Because this recommendation is already overdue, I have my doubts as to whether DOD will issue it any time soon.

What’s the takeaway? Unfortunately, GAO’s report makes it appear that we’re a ways from DOD fully implementing the LPTA restriction. For offerors, this might mean that procurements that should, in reality, be issued on a best-value basis are nonetheless issued as LPTA.

Even if DOD has not yet implemented these requirements, offerors who are adversely affected by the use of LPTA procedures might be able to file a pre-award protest challenging that solicitation term. I’m not convinced that, just because DOD has balked on implementing Congress’s requirement, doesn’t mean the clear import of that requirement shouldn’t be given effect. In other words, there might be a basis to challenge the use of an LPTA criteria through a pre-award GAO protest even before DOD formally changes its regulations.

If you have any questions about these LPTA restrictions—or their impact on a potential bid—please give me a call.