The Department of Defense Issues Final Rule Restricting LPTA Procurements
In December 2018, we wrote about the Department of Defense’s (DoD) proposed rule to limit, and in certain instances prohibit, its use of the Lowest Price Technically Acceptable (LPTA) source selection process. On Sept. 25, 2019, the DoD finally issued its final rule, addressing the limitations and prohibitions Congress mandated in both the 2017 and 2018 National Defense Authorization Acts (NDAAs). The final rule adds section 215.101-2-70 to the Defense Federal Acquisition Regulation Supplement (DFARS).
The final rule is essentially the same as the proposed rule. According to DFARS 215.101-2-70(a)(1), the LPTA source selection process shall only be used 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 (as defined at FAR 7.101) of the product(s) or service(s) being acquired; and
- The contracting officer documents the contract file to describe the circumstances justifying the use of the LPTA source selection process.
According to DFARS 215.101-2-70(a)(2), DoD contracting officers shall avoid, to the maximum extent practicable, using a 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; or
- 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, DFARS 215.101-2-70(b) prohibits contracting officers from using the LPTA source selection process to procure items designated by the requiring activity as personal protective equipment or an aviation critical safety item when the level of quality or failure of the equipment or item could result in combat casualties. It also prohibits the use of LPTA when acquiring engineering and manufacturing development (EMD) for a major defense acquisition program (MDAP), and when awarding auditing contracts.
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 rule goes into effect on Oct. 1, 2019. It can be viewed here. Now that the rule is final, contractors should expect to see fewer LPTA procurements. If a LPTA source selection is included in a DoD solicitation issued after Oct. 1, 2019 which appears to be in violation of the rule, contractors should bring it to the attention of the contracting officer responsible for the solicitation. If the solicitation remains unchanged, contractors should consult with legal counsel to discuss whether a pre-award bid protest would be appropriate.
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