DoD takes point on more mathematical procurement systems

DoD’s new procurement evaluation process is moving toward objectivism and a more mathematical system of judgement, as part of an overall shift in favor of Lowest Price Technically Available.

Value-adjusted total evaluated price (VATEP) attempts to put a price on value enhancements, as opposed to the current subjective best value system, said Sharon Larkin, attorney and partner at Steptoe and Larkin. The objective requirements, she said, give agencies more discretion to value in a more holistic way.

The new system is an attempt to address ambiguity issues.

“One of the intended benefits for the VATEP objective process is to identify with additional clarity for the potential offerors how to propose,” Larkin said. “But the downside of that is that it’s very easy to make mathematical errors, so that could be a source of protest. There’s also some downside for offerors because they have to look at the solicitation early on before submitting a proposal, and ask the question ‘are these in fact enhancements that I think should be valued?’ And if not, they may need to take certain actions.”

Regardless of potential mathematical errors, Larkin said that this new measure is designed to help reduce protests with the Government Accountability Office. Having previously worked for GAO rendering judgements on protests, she said that agencies’ deviations from stated evaluation criteria are the most common reason for a sustained outcome.

DoD updated its source-selection guide in March, following a governmentwide trend, Larkin said, toward LPTA. She said that part of this trend is due to a migration of skilled procurement officials from public to private sectors, leaving agencies to struggle with obtaining procurement expertise.

“There’s nothing more complicated than conducting very complicated, big procurements,” Larkin said. “And to the extent that any agency can put an objective formula over that, it becomes easier to execute.”

And VATEP will certainly accomplish that, said Larkin, if for no other reason than that it will limit post-award challenges, which will boil down to a yes or no question: did the agency follow the process it stated?

The system also could cause the government some trouble, however.

“The downside for the offerors is that they really need to look at those solicitations very closely,” she said. “If they don’t think they’re going to benefit from identified enhancement, they don’t get to wait, make that challenge post award. “

And then there’s the added wrinkle of quantifying the value of services, where an organization’s approach may make all the difference.

“I think that’s the big challenge: how do you value services? How do you consider offerors’ unique, technical approaches?” Larkin asked.

Larkin said that while the source selection procedures establish a requirement owner, it remains to be seen whether that will be the program manager or contracting officer, as both are responsible for the identification and evaluation of any enhancements.

The new procedures went into effect in May, although agencies can still use older methods if the solicitations happened before then.

This trend will probably make the jump soon to civilian agencies, Larkin said. The move toward LPTA is governmentwide, and agencies will be eager to adopt procedures that lower the likelihood of procurement protests.

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