During the past six years, most industry and Government leaders have joined in lamenting the use of lowest price technically acceptable (LPTA) contracting. However, a recent survey completed by the Washington Technology (WashTech) journal has shown that this practice is still widely used.

In this article I discuss the findings presented in the WashTech research piece. Their survey instrument was same as the one they had used to study LPTA three years ago. Therefore the findings provide a picture of how LPTA today compares to what it was three years ago.

Many of us have been party to discussions in which associates presented impressionistic evidence as to how LPTA had waned and would soon be gone. The WashTech study provides strong evidence that our associates were mistaken:

Our results, based on questionnaires answered by more than 300 people from a wide range of large, small and mid-sized companies, reveal that LPTA continues to spread havoc in the market at rates very similar to the first survey three years ago.

In their introduction WashTech provided this commentary, as to industry opinion:

. . . LPTA contracting is still a loathsome way to run a procurement. It hurts contractors and it hurts customers. Incumbent contractors hate to see recompetes run as an LPTA procurement. They damage margins or increase the risk of losing to a challenger that on paper anyway is less expensive.

It is not surprising to learn that: 84.5% of contractors said LPTA “has had a negative impact on their business.” Contractors said they are “getting pickier about what contracts they pursue,” and over 28% percent said they no longer bid LPTA contracts.

One upside in the WashTech findings is that the growth of LPTA contracts has apparently slowed down considerably. Three years ago, 49.2% reported that LPTA was growing, compared to 31.9% who say it is growing today. The downside to that question is that 48% said the use of LPTA has remained the same. This suggests that the use of LPTA has stabilized. Thus while it may not be increasing, it also isn’t decreasing.

Some key takeaways from the survey are as follows:

  • LPTA is a permanent fixture in the market.
  • Contractors believe it hurts their business and their customers.
  • The move to best-value contracting is more rhetoric than reality.
  • Contractors continue to make adjustments to their business models and strategies because of LPTA.

One of the tables provided in the WashTech study seen below shows opinion of the contractors as to the effect of LPTA on the Government customers.

We can see that opinion revealed in the graphic above stayed about the same from 2014 to 2017. Some of the participants in the survey provided specific comments as to the opinion of their Government customers on LPTA as follows:

  • “Most government customers hate LPTA.”
  • “Customers hire companies and learn that they can’t deliver the levels of service needed without a contract mod.”
  • “End users are the ones that suffer most when LPTA is used. They are stuck with a bad solution for 5+ years and Government doesn’t even really save money in the end as inferior, less durable outcomes often cost a lot more over the life of the solution.”

If we can’t see an end to the LPTA problem, we at least see that it it isn’t getting much worse.