DISA isn’t getting the message on LPTA.

Two years ago this week, a former Army acquisition official wrote to me in exasperation at the apparent disconnect between the acquisition under secretary’s “better buying power” guidance for procurement strategy, and the bureaucracy’s misapplication of it:

     As [Under Secretary Frank] Kendall describes it, “define best value, so industry knows what we are willing to pay for the increased performance. [We need to] give industry a reason to be innovative, to bid above the threshold”… [But] how does this reconcile with what appears to be an enormous prevalence for LPTA acquisition? I've seen multi-million dollar requirements go to the winner based on a few thousand dollars difference when the higher price was pretty clearly technically superior.

And so it may be with DISA’s ENCORE III. As I noted last week, that agency got a smackdown from the GAO, which sustained a pre-award protest from BAH and CACI. The GAO reserved its harshest criticism for the combination of a Lowest-Price, Technically-Acceptable (LPTA) approach for much of the solicitation with price floors and price-indifference elsewhere. So, just today, Tony Bertuca of Inside Defense reports that DISA “won't alter [the] LPTA approach,” because the GAO only disallowed the other problems.

Someone is clearly not getting the message. I’ve been on a public crusade against LPTA contracting for at least three years now. Just to summarize, here are links to some of the essays in which I’ve criticized how widespread the misapplication of buying-on-price has become in the US Defense Department, both here and on the Atlantic Council’s Defense Industrialist blog:

• Not the School Solution. Not Even Close. Using the LPTA criterion for the ENCORE III award is very bad idea (29 April 2016).
• DARPA + SEAL beats TINA + LPTA. Lowest price is no way to buy information technology, Silicon Valley or not (6 August 2015)
• From Overreaction to Finesse in Military Procurement. Better Buying Power may depend on human capital the Pentagon yet lacks (14 November 2014).
• LPTAs "don't necessarily represent the best value". Keep providers that are cheap, or providers that are good—you choose (9 July 2014).
• Calming down on fixed price: taming the overzealous implementation of Better Buying Power (29 October 2013).

But don’t take it from me. Go ask anyone who runs a corporate purchasing department. Go ask anyone who teaches supply chain management at a business school. An LPTA purchasing strategy is either just plain crazy, or deeply lazy. Either way, it needs to be run out of the Defense Department.

Comments

[Nate]

I know this post is over a year old, but I had to comment as the LPTA contracts are affecting us at DISA Ogden BIG TIME. We are losing all the best people due to these contractors coming in and slashing salaries for everyone on the contract. I got lucky on the last one and was able to turn down the offer to move to another team. Only to be caught in another LPTA contract 2 months later. Now, more of our best and smartest folks are just up and leaving. I will be too, but don't have the option to leave right away. So I have to deal with a 30% pay cut until I can find something else. How long is it going to take before DISA starts feeling the pain and pulls their head out of their ass?