Careful observers of last week’s rollout of Better Buying Power 3.0 – the “technological superiority” edition of the Pentagon’s ongoing acquisition improvement program – will have noticed that there was no mention this time around of Lowest Price Technically Acceptable (LPTA) contracts. That’s one of the defense industry’s most persistent critiques of the way DoD has been using the acquisition system in the last few years.
While one of the tenets of Better Buying Power 3.0 is that DoD needs to let industry know precisely what it’s willing to pay for better performance and to buy more products and services on the basis of “best value,” industry critics point out that many source selections in recent years never even reached those questions. That was because the evaluation criteria were defined up-front to make clear that the government would award the contract to whichever firm can meet the barebones requirements at the lowest cost.
But Frank Kendall, the undersecretary of Defense for acquisition, technology and logistics, said he remains aware of the LPTA complaints, and said the department will continue to examine the issue over the next few months while it moves 3.0 from draft form toward formal instructions to DoD acquisition officials.
“I’m collecting data on how much we’re actually using LPTA, because frankly, I think there are a few cases that have gotten a lot of attention, so I want to understand what we’re really doing there,” Kendall told reporters. “But our policy is clear: don’t use LPTA unless you can really define the performance that you want, and that is all you want.”
Still, Kendall acknowledged that many of the Pentagon’s weapons programs had “defaulted” to LPTA because officials had not identified precisely how much more they were willing to pay for added innovation.
He said most of the complaints he has heard about LPTA have come from the world of service contracting.
“And it’s often incumbents who have built up a level of expertise and a more experienced, more expensive workforce who are competing against someone else who’s coming in with lower rates and a lower base of knowledge. They would like that level of knowledge to be valued in a best-value competition,” Kendall said. “Where that sort of expertise matters, we should not use LPTA. But there are service contracts like base maintenance, for example, where we can define quite precisely what we want, and that is all we want. We’re not going to pay for any more than that.”
This post is part of Jared Serbu’s Inside the DoD Reporter’s Notebook feature. Read more from this edition of Jared’s Notebook.