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LPTA Awards: Sad to Say, They’re Not Going Away

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AwardOver the course of the past several years, “best value” has reigned supreme in the federal contracting world.  But with the economic downturn, we’ve seen an increase in Lowest Price-Technically Acceptable (LPTA) contracts.  Despite the general aversion for LPTA awards, they’re here to stay.

Last summer, Washington Technology did a survey among contractors regarding LPTA contracts.  68% of the survey’s respondents said the LPTA has negatively or mostly negatively impacted their businesses; pointing to suffering profits, lowered salaries, and an influx of junior staffers as results of increasing LPTA awards.

And 66% of respondents said the LPTA has negatively or mostly negatively impacted the customer.  Comments included the government’s surprise in receiving junior staff when experience was needed, and an inability to win task orders under BPAs due to lack of experienced personnel at proposed prices.

Work has been done on both sides of contracting business to assure that the government’s needs are met, while educating government customers about the risk of an LPTA award.  But with ongoing political power plays and uncertain budgets, the LPTA award isn’t going away any time soon.  Nearly half of contractors surveyed think the number of LPTA awards will increase in the next few years.  At Richter & Company, we agree.

With many agencies having troubles in their contracting shop, and plenty of commoditized items on the purchasing docket, the LPTA is a convenient way to purchase.  Unfortunately, the convenience outweighs the risk.  The LPTA award isn’t going away any time soon.