Which procurement process gives customers what they need?

The Federal Government often struggles in making evaluations when awarding multi-year enterprise operation service contracts.  As budgets have decreased or diminished through the years, the government has turned from Best Value procurement to Lowest Priced Technically Acceptable (LPTA) procurements.

In general, there is a consensus in the industry that LPTA has hurt the industry’s ability to support the customer and re-invest in their companies.  LPTA may just be hurting the government as well. So are they reevaluating LPTA and moving back towards Best Value?

LPTA

From the government side, I often hear, “we got the services that we paid for from the industry- low cost with low value.” In regards to the awarding contract officer’s, a LPTA contract is much easier then Best Value.  The evaluation is less difficult and the chance of protest is lower.  In almost all cases, LPTA is the “path of least resistance” approach.

The failure in this approach is that it makes all technology services a commodity and ill-prepared or non-qualified companies can win or buy LPTA procurements.  We have witnessed this play out too many times over the past 5-6 years.

A 2013 Market Connections and Centurion Research Solutions study has shown that 65 percent of contractors and 43 percent of government workers thought that LPTA hurt long term value for short term savings.  Many agencies have come to find that “technically acceptable” is not well defined.  Companies are being awarded contracts based on their promises of a solution or service that they, in the end, cannot provide. The government loses money on 1. sustaining the original cheaper contacts and 2. going through the contracting process again.

The Department of Defense has recently been reevaluating and beginning to step back from LPTA awards, as written in a DOD memo from April 2016.

Best Value Procurements

Best Value procurements are more work for the government. This procurement process requires more thought on what is defined as “value” for that agency, such as quality or expertise.  To me, a contractor that can support a government system throughout the life cycle of that system on a 5-year services contract can provide that value.  While the O&M staff on site is qualified at keeping systems online and operational, I would argue that the contractor needs reach back to bench Subject Matter Experts (SME’s) to be able to provide real value.

SME’s augmenting a contract can help with:

  • Smart common sense technology selection for modernization and investment protection
  • Forward thinking Systems Engineering leadership
  • Advanced trouble shooting support to stay operational tempo
  • Looking glass view of the technology systems and how they map into the mission

Best Value procurement may take more work initially but it allows the government to better prepare for the future and minimizes risks.

Contracting Solution

We at PEAKE provide SME support on our multi-year contracts in the scope areas of Audio Visual support, Mobile Communications, SATCOM, IP Networking and Cyber Security.  The value of providing this service to our customers and their mission is tangible.  This approach results in cost effect systems, that are quickly deployable, supportable, but most importantly meets mission requirements.  LTPA contracts and poorly defined “Best Value” consistently fail in these areas.

Best Value procurements do in fact take more work and thought by the government, however they do provide more “value” to the customer mission.  Ultimately the Best Value approach is a more effective use of tax dollars. Although it increases our overhead, as a government contractor, we believe providing SME reach back is the most effective way to deliver true “Best Value”.

Written by Jeff Lawn, Vice President of Enterprise Operations

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