Update: FAR Final Rule Puts Limits on LPTA Procurements

Lowest price technically acceptable (LPTA) source selection has been on the decline lately. A recent final rule from the FAR Council, effective February 16, 2021, continues this trend. In the rule, the FAR Council implemented additional restrictions on the use of LPTA for non-DoD contracts.

The 2019 National Defense Authorization Act (NDAA) included a number of criteria that must be met for non-defense agencies to utilize LPTA procurements. DoD finalized implementation of related restrictions back in October 2019. Around the same time, the FAR council followed the trend by issuing a proposed rule to implement various restrictions on the use of LPTA. The difference in timeline stems from the fact that Congress added the LPTA criteria for DoD procurements in the 2017 and 2018 NDAA, but didn’t add the civilian restrictions until the 2019 NDAA.

The FAR Council’s commentary made clear that the rule does not “prohibit the use of the LPTA source selection process” but rather identifies “circumstances that must exist for an acquisition to use the LPTA source selection process and certain types of requirements that will regularly benefit from the use of tradeoff source selection procedures.” In other words, the goal is to keep LPTA evaluations away from procurements that aren’t suited for it.

Avoiding use of LPTA

Here are some of the main restrictions for civilian agencies using LPTA acquisitions.

LPTA “shall only be used” in certain circumstances. These circumstances include:

  1. Where there are minimum requirements with clear “performance objectives, measures, and standards.”
  2. Where exceeding the minimum would provide no or limited value to an agency.
  3. Where an agency will use minimum “subjective judgment” to compare proposals.
  4. Reviewing all proposals would not help the agency identify “characteristics that could provide value.”
  5. The lowest price will reveal “the total cost, including operation and support.”
  6. The agency must document its justification for using LPTA.

Contracting officers should also avoid LPTA for certain types of acquisitions, at least “to the maximum extent practicable”:

(1) Information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, audit or audit readiness services, health care services and records, telecommunications devices and services, or other knowledge-based professional services;

(2) Personal protective equipment; or

(3) Knowledge-based training or logistics services in contingency operations or other operations outside the United States, including in Afghanistan or Iraq.

There are some differences between the recently enacted civilian rule and the one for DoD agencies. Two requirements for DoD use of LPTA are not found in the civilian rule:

  • No, or minimal, additional innovation or future technological advantage will be realized by using a different source selection process.
  • Goods to be procured are predominantly expendable in nature, are nontechnical, or have a short life expectancy or short shelf life.

There is one other distinction compared to the DOD rule. The civilian rule includes a restriction on health care services and records, but the DOD rule does not.

The new rule from the FAR Council will limit use of LPTA procurements for civilian agencies, similar to the rules for DoD procurements. While there are a number of differences, the overall result should be to limit use of LPTA evaluation for more complicated procurements.

Questions about this post? Email us or give us a call at 785-200-8919.

Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedInTwitter and Facebook.