LPTA_vs_Trade_Off_Symposium10July19.pdf

Source Selection Support Center of Excellence ~ S3CoE

U.S. Army Contracting Command

ACC APG S3CoE SYMPOSIUM SERIES Lowest Price Technically Acceptable (LPTA) vs. Trade-Off 10 July 2019

UNCLASSIFIED

Agenda

Welcome Define LPTA and Trade-Off Describe types of requirements suitable for LPTA and Trade-Off Discuss LPTA and Trade-Off Myths Panel discussion with audience participation Closing Remarks

Ground Rules:

Informal Discussion - Not Binding

The contracting officer (KO) is ultimately responsible for communications relating to specific solicitations

Always rely on the solicitation language, not what you hear today

We are not discussing specific solicitations, awards or litigations.

The positions stated are the opinions of the participants and not that of the Army orAMC.

Fundamental Principles driving Government/Industry communication:

Improving requirements, solicitations, evaluations and the overall process

Maintaining the integrity of the procurement process

Ensuring fairness in acquisitions

Promoting competition

Mission accomplishment while protecting the taxpayer

Ground Rules and Principles

Define LPTA and Tradeoff

Lowest Price Technically Acceptable

• The lowest price technically acceptable source selection process when best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price.

• The evaluation factors and significant subfactors that establish the requirements of acceptability shall be set forth in the solicitation. Solicitations shall specify that award will be made on the basis of the lowest evaluated price of proposals meeting or exceeding the acceptability standards for non-cost factors.

• Proposals are evaluated for acceptability but not ranked using the non-cost/price factors.

• Tradeoffs are not permitted.

Trade-Off (Subjective Trade-Off not VATEP Trade-Off)

• A tradeoff source selection process or when it may be in the best interest of the Government to consider award to other than the lowest priced offeror or other than the highest technically rated offeror.

All evaluation factors and significant subfactors that will affect contract award and their relative importance shall be clearly stated in the solicitation;

and

The solicitation shall state whether all evaluation factors other than cost or price, when combined, are significantly more important than, approximately equal to, or significantly less important than cost or price.

• This process permits tradeoffs among cost or price and non-cost factors and allows the Government to accept other than the lowest priced proposal. The perceived benefits of the higher priced proposal shall merit the additional cost, and the rationale for tradeoffs must be documented.

Define LPTA and Trade-Off

Define LPTA and Tradeoff

LPTA Presently (pending National Defense Authorization Act updates)

To the maximum extent practicable, the use of lowest price technically acceptable source selection criteria shall be avoided in cases for procurements that are predominately for the acquisition of:

• Major defense acquisition programs, aviation critical safety items, personal protective equipment;

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

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

Landing Ship

LPTA Today LPTA Previously:

The use of lowest price technically acceptable source selection criteria may have been used for procurements that were for

• Systems engineering and technical assistance Services (SETA).

• Personal protective equipment

• Information technology services; or

• Knowledge-based training or logistics services outside the United States.

LPTA Trade-Off Technical/Performance Most suited to commercial type Items or non-complex services- Acceptable or Unacceptable.

Technical/Performance Suited to more complex items or services, less definitive, developmental work may be required. Allows merit for higher performance.

Evaluation is objective and Offerors are not given credit for exceeding the established performance requirements.

Ability to subjectively evaluate quality of non-cost factors and make the ultimate decision to pay more to realize the benefits by conducting trade-offs.

Small Business Participation Small Business Participation/Subcontractor plans Exempt.

(may be used if required)

Small Business Participation Places a level of value on Small Business Participation/Subcontracting plans.

Past Performance Aware of the risks and limitations in Past Performance - Acceptable or Unacceptable.

Past Performance Places greater value on Past Performance - Confidence Assessment.

Price (of the Acceptable proposals)

Investment of time up-front is key to establishing if requirements are suitable for LPTA. Lowest (evaluated) price.

Price Generally involves in-depth planning and more time and resources. Higher price may be paid if warranted and documented.

Types of requirements suitable for LPTA and Trade-Off

Industry Reported LPTA and Trade-Off Myths

1. “Some RFPs state best value trade-off where technical is significantly more important than cost and price, but ultimately price is the most important selects lowest price.”

Response: When Trade-off is used and it is not advantageous to the Government to pay the premium price for the highest rated proposal, then the Government may award to the Offeror that provides the best value.

2. “In Government reliance on LPTA and awarding to firms unable to deliver at the price point, we see a trend of Contractors not performing or poorly performing at rates that are too low for the work to be performed.”

Response: The Government does evaluate cost and price for realism; if the cost price is not realistic, a most probable cost (MPC) upward adjustment may impact the Offeror being the lowest evaluated price.

There have been instances where proposed labor rate caps; were incorporated into the contract to ensure proposed labor costs were enforced.

3. “Why doesn’t the Government just provide us the IGCE and how much money they have to spend; to let Industry tell you if they can do the work for that price?”

Response: LPTA is not the selected methodology based on funding limitations; it is selected for well defined requirements, where there may not be a need to pay for exceeding the standard of acceptability.

4. “By using the LPTA methodology, an agency is not procuring the best value product or service.”

Response: LPTA is also best value for well defined efforts; the Government may not have a need to pay for exceeding the standard of acceptability.

All symposium questions, answers and pending responses will be updated on FedBizOpps by 24 July 2019.

Please send post symposium questions or comments to the S3CoE Mailbox at usarmy.apg.acc.mbx.acc-apg-s3coe@mail.mil

Post Symposium Information mailto:usarmy.apg.acc.mbx.acc-apg-s3coe@mail.mil