Is the “Lowest Price Technically Acceptable” Acceptable for Government Software Purchases?
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Astronaut John Glenn reportedly once said, “As I hurtled through space, one thought kept crossing my mind — every part of this rocket was supplied by the lowest bidder.” Taxpayers want the government to be good stewards of their hard-earned money, and it is true that sometimes the lowest bid will get the job done, but very often, choosing the lowest bidder is actually the wrong — and more costly — choice. This is especially true when it comes to modern software.
In this blog post, we’ll explore the federal acquisition regulations (FAR) and the commonly used lowest price technically acceptable (LPTA) standard. I’ll tell you what LPTA is, the significant risk it can create for agencies, and how selecting unimaginative solutions will only negatively impact their work in the near term or in the future. We’ll also discuss the tradeoff process and how this alternative can allow agencies to maximize the value of their investments and take advantage of rapid advancements in technology and capabilities.
Firstly, let’s define LPTA. According to FAR 15.101-2, LPTA is a procurement approach that “requires that the Government evaluate proposals solely on the basis of price, with the award being made to the offeror submitting the lowest priced technically acceptable proposal.” In other words, the government will only consider the lowest-priced proposal that meets the minimum technical requirements specified in the solicitation. While this approach may seem appealing for cost-conscious organizations, it’s not always the best decision basis for procuring software.
One of the biggest drawbacks of the LPTA approach is that it relies heavily on the agency’s own understanding of their needs and limits the opportunity for technology providers to leverage their expertise to offer far more useful solutions. Functional requirements are often defined by agency subject matter experts who understand their pain points and current processes, but not necessarily the transformative opportunities presented by newer technologies. Since the focus is solely on meeting the minimum technical requirements, there is little room for experimentation and configuration. The result is often a focus on digitizing existing practices, rather than truly modernizing processes and programs. In the world of case management and business process management software, this means continued reliance on PDF’s and Word documents that then require additional technologies and processes to manipulate, rather than a streamlined solution that reduces the need for work-arounds and complexities.
LPTA as applied to software simply does not take into account the total cost of ownership. By focusing on meeting pre-defined, functional requirements at a specific point in time, contractors are not incentivized to develop innovative solutions or invest in research and development to improve their product over time. As a result, agencies end up with solutions that do not meet their evolving needs, which can be costly and time-consuming to replace or update. So, while the initial price may be lower, the long-term costs of maintenance and support may end up being higher than a more expensive but better-quality solution.
On the other hand, the tradeoff process under FAR 15.101-2 allows government agencies to evaluate proposals based on a variety of factors, such as technical approach, management approach, past performance, and price. By considering a range of factors, agencies can identify the proposal that provides the best value for their investment. This ultimately allows for increased flexibility and encourages innovation and experimentation, leading to development of better solutions to meet current and future needs.
The federal government has already recognized the limitations and drawbacks of LPTA, and it has actually been barred from use by the DOD and other agencies under certain circumstances, including when there is minimal prospect for technological innovation. Even though LPTA is losing favor for technology acquisitions, some agency personnel may not fully realize the opportunities for technological advancements within certain types of software and technology and default to LPTA procurements. For example, faced with software that includes bleeding-edge features and innovations in AI and automation, case workers still often favor LPTA.
While LPTA may seem like an appealing procurement measure for the bottom line, it is not an appropriate decision basis for procuring competitive software. My company’s motto is “Good Enough for Government is Not Good Enough.” It’s time that every agency opened their minds to the opportunities in the marketplace and started demanding more than the lowest price.
Benjamin Tingo is the Chief Legal Officer and Vice President of Strategic Partnerships at OPEXUS. OPEXUS (formerly AINS) is a DC-based GovTech 100 awardee whose mission is to empower professionals to elevate trust in public institutions through the design, development, and delivery of specialized case management software, including Open Government (FOIA and Correspondence), OIG Audits and Investigations, and Human Resources/Employee Management. Benjamin is a licensed attorney, with nearly twenty years of experience with complex civil and criminal litigation and as in-house GovTech counsel. He is also a member of NARA’s FOIA Advisory Committee and a volunteer firefighter.