On Dec. 4, 2018, the Department of Defense (DoD) issued a proposed amendment to the Defense Federal Acquisition Regulation Supplement (DFARS) to limit and, in certain instances, prohibit the use of the Lowest Price Technically Acceptable (LPTA) source selection process.
For years, the LPTA source selection process has been blamed for stifling innovation in the defense sector as firms competed to meet the minimum technical requirements at the lowest possible cost. In response, Congress passed limitations and prohibitions on the use of LPTA as part of both the 2017 and 2018 National Defense Authorization Acts (NDAAs), giving agencies the discretion to weigh the “benefits of cost and technical tradeoffs,” and increase innovation and industry responsiveness to support the warfighter.
To implement the 2017 and 2018 NDAAs, the DoD has proposed to add a new DFARS section 215.101-2-70 that addresses various limitations and prohibitions on the use of the LPTA source selection process.
Under the proposed regulation, an LPTA source selection process shall be used only when:
- 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.
- No, or minimal, value will be realized from a proposal that exceeds the minimum technical or performance requirements.
- 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.
- 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.
- 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.
- The contract file contains a determination that the lowest price reflects full life-cycle costs of the product(s) or service(s) being acquired.
- The contracting officer documents the contract file to describe the circumstances justifying the use of the lowest price technically acceptable source selection process.
The proposed regulation also explains that agencies should make every effort to avoid using an LPTA source selection process when a procurement is predominately for the acquisition of:
- Information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, other knowledge-based professional services.
- Items designated by the requiring activity as personal protective equipment.
- Services designated by the requiring activity as knowledge-based training or logistics services in contingency operations or other operations outside the U.S., including Afghanistan or Iraq.
Finally, the proposed DFARS provision prohibits contracting officers from using the LPTA source selection process for procuring:
- Items designated by the requiring activity as personal protective equipment or an aviation critical safety item, if the level of quality or failure of the item could result in combat casualties.
- Engineering and manufacturing development (EMD) of a major defense acquisition program (MDAP).
- Auditing services.
The LPTA limitations and prohibitions apply to FAR Part 15 Contracting by Negotiation, FAR Subpart 8.4 Federal Supply Schedules, FAR Part 12 Acquisition of Commercial Items, FAR Part 13 Simplified Acquisition Procedures, and FAR 16.505 (Indefinite Delivery Contracts – Ordering). The DoD will release cross-reference updates to the FAR and DFARS.
In the meantime, interested parties may comment on the proposed regulations through 4 Feb. 4, 2019, here.