2017 NDAA Restricts DoD’s Use of LPTA Procedures

The 2017 NDAA is full of important changes that will affect federal contracting going forward. As Steve wrote about earlier this week, some of these changes relate to government contracting programs (like the SDVOSB program). Still others relate to how the government actually procures goods and services.

One of these important changes severely limits the use of lowest-price technically-acceptable (“LPTA”) evaluations in Department of Defense procurements. Following the change, “best value” tradeoffs will be prioritized for DoD acquisitions. This post will briefly examine when LPTA procurements will and won’t be allowed under the 2017 NDAA.

The 2017 NDAA sets a new DoD policy: to avoid using LPTA evaluations when doing so would deny DoD with the benefits of cost and technical tradeoffs. As a result, the 2017 NDAA limits the use of LPTA procurements to instances when the following six conditions are met:

  1. DoD is able to comprehensively and clearly describe the minimum requirements expressed in terms of performance objectives, measures, and standards that will be used to determine the acceptability of offers;
  2. DoD would recognize no (or only minimal) value from a proposal that exceeded the minimum technical or performance requirements set forth in the solicitation;
  3. The proposed technical approaches will not require any (or much) subjective judgment by the source selection authority as to their respective desirability versus competitors;
  4. The source selection authority is confident that reviewing the bids from the non-lowest price offeror(s) would not result in the identification of factors that could provide value or benefit to the Government;
  5. The Contracting Officer includes written justification for use of the LPTA scheme in the contract file; and
  6. DoD determines that the lowest price reflects full life-cycle costs, including costs for maintenance and support.

By limiting DoD’s use of LPTA to procurements to instances in which these six criteria are met, the 2017 NDAA effectively mandates that for a majority of procurements, the DoD should use best value selection procedures.

But in addition to codifying a presumption against LPTA procurements, the NDAA goes so far as to caution DoD to not use LPTA procurements under three specific types of contracts:

  1. Contracts that predominately seek knowledge-based professional services (like information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, and audit or audit readiness services);
  2. Contracts seeking personal protective equipment; and
  3. Contracts for knowledge-based training or logistics services in contingency operations or other operations outside the United States (including Iraq and Afghanistan).

Finally, to verify compliance with this new requirement, the NDAA requires DoD to issue annual reports over the next four years that describe the instances in which LPTA procedures were used for a contract exceeding $10 million.

The 2017 NDAA makes clear Congress’s intent to rework DoD’s contracting programs and procedures. Going forward, Congress wants DoD to utilize best value source selection procedures as much as possible, by severely restricting use of LPTA procedures for DoD contracts.

The House approved the 2017 NDAA on December 2.  It now goes to the Senate, which is also expected to approve the measure, then send it to the President. We will keep you posted.