DOD Restricts Use of Lowest Price Technically Acceptable Procurements

The Department of Defense (DOD) recently promulgated a final rule limiting the DOD’s ability to use the Lowest Price Technically Acceptable (LPTA) method of procurement. The final rule — which took effect on October 1, 2019, and applies only to DOD procurements — is codified at section 215.101-2-70 of the Defense Federal Acquisition Regulation Supplement (DFARS).

What is LPTA?

The LPTA method is a competitive negotiation source selection process where the non-price factors of a proposal are evaluated to determine which proposals are “technically acceptable,” and an award is then made to the “technically acceptable” offeror with the lowest price.

What does the final rule say?

Under the final rule, the LPTA “source selection process shall only be used” by the DOD when:

1. Minimum requirements can be described “clearly and comprehensively and expressed in terms of performance objectives, measures, and standards” that will be used to determine the acceptability of offers;
2. No, or minimal, value will be realized from a proposal that exceeds the minimum technical or performance requirements;
3. The proposed technical approaches will require no, or minimal, “subjective judgment” by the source selection authority as to the desirability of one offeror’s proposal versus a competing proposal;
4. The source selection authority has a “high degree of confidence” that reviewing the technical proposals of all offerors would not result in the identification of characteristics that could provide value or benefit;
5. No, or minimal, additional “innovation or future technological advantage” will be realized by using a different source selection process;
6. Goods to be procured are “predominantly expendable in nature, are nontechnical, or have a short life expectancy or short shelf life;”
7. The contract file contains a determination that the “lowest price reflects full life-cycle costs (as defined at [Federal Acquisition Regulation]101) of the product(s) or service(s) being acquired;” and
8. The contracting officer “documents the contract file describing the circumstances justifying” the use of the LPTA source selection process.

Importantly, the final rule also states that contracting officers “shall avoid, to the maximum extent practicable,” using the LPTA method in the case of a procurement that is predominately for the acquisition of:

1. Information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, or other knowledge-based professional services;
2. Items designated by the requiring activity as personal protective equipment (but see DFARS 215.101-2-70(b)(1)); or
3. Services designated by the requiring activity as “knowledge-based training or logistics services in contingency operations or other operations outside the United States, including in Afghanistan or Iraq.”

Moreover, the final rule imposes a per se prohibition on the use of the LPTA method for procurements of:

1. Items designated by the requiring activity as “personal protective equipment or an aviation critical safety item, when the requiring activity advises the contracting officer that the level of quality or failure of the equipment or item could result in combat casualties;”
2. Engineering and manufacturing development for “a major defense acquisition program for which budgetary authority is requested beginning in fiscal year 2019;” and
3. Auditing contracts.

What are the key takeaways?

The final rule — which took effect on October 1, 2019, and applies only to DOD procurements — restricts greatly the circumstances under which the DOD may use the LPTA source selection process. Accordingly, contractors should be on the lookout for improper inclusion of the LPTA method in DOD solicitations, as well as DOD misuse of the LPTA method during proposal evaluations. The former situation may give rise to a pre-award bid protest — which generally must be filed before the closing time set for receipt of initial proposals — and the latter situation may give rise to a post-award bid protest — which generally must be filed within a very tight timeframe after contract award.