The Defense Department today issued a final rule meant to limit the use of the lowest price, technically acceptable contracting approach, according to a Federal Register notice.
The final rule implements sections of the National Defense Authorization Acts for fiscal years 2017 and 2018.
"To ensure that DOD is not denied the benefit of cost and technical tradeoffs in the source selection process, the rule identifies meaningful circumstances that must exist for an individual requirement to use the LPTA source selection process," DOD writes in the notice.
Defense contractors have long complained LPTA arrangements are overused at DOD.
In 2015, Frank Kendall, DOD's then acquisition chief, sent a memo to Pentagon program managers reiterating that they should only use LPTA when appropriate and not as default arrangements to cut costs.
Professional Services Council President and CEO David Berteau said in a statement that today’s rule should be the "final nail in the LPTA coffin."
"While LPTA may be appropriate on occasion, the practice has been widely abused and misused for years," he said. "Now that these regulations have been issued, program managers and contracting officers will have the consistent guidance they need to maximize value, access innovation, and improve acquisition outcomes. All federal agencies should be required, as the statute mandates, to document that adequate consideration was given to the complexity of the mission needs and the range of available solutions that will provide the best value for the taxpayers, not just default to the lowest price."
A Government Accountability Office report released today found that DOD used the LPTA process more frequently than the civilian agencies it examined.
According to the report, DOD in fiscal year 2018 used LPTA 25% of the time for contracts valued at $5 million or more, while other civilian agencies used it 7% percent of the time.