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Guest Vern Edwards

Economical LPTA

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Include whomever you like. Include everybody if you are scared of protests.

Bottom line in the decisions to...

1) Use the LPTA method and

2) To allow the opportunity to conduct discussions

...depend upon your ultimate goal as a KO or project delivery team. Is it...

1) To get the "best" deal, employing a reasonable amount of effort? Or is it

2) Just to make an award using the least amount of effort possible?

For me as a professional and as a fellow taxpayer, I certainly would hope that the acquisition professionals out there, especially contracting officers leading the process, would choose to get the best deal for the taxpayer as well as the customer.

So, find a way to streamline the process for everyone's benefit, the PDT, the industry and the taxpayer.

If you allow yourself some flexibility, you don't have to conduct discussions if it will cost more to do so than the expected benefit or take an unacceptable amount of time to do it.

But at least don't box yourself into a corner by not allowing yourself the opportunity to get a better deal, if it is worth the effort and if there is a possibility that the lowest-priced technically acceptable offer is substantially higher than ?ou could have achieved with a little more effort.

I think that is one reason that the FAR rewrite team brought the LPTA method under the "best value spectrum" in the 1996 FAR 15 rewrite.

In our organization, the source selection process is reimbursable to the particular acquisition program being served. So, we'd want to weigh the cost of the source selection, task order selection, etc. against the benefit to be gained. But I always try to keep the taxpayer, the customer and industry in mind.

After all, what does "the best interest of the government" really mean? Not just the amount of work involved or the instant program but in the best overall interest to all concerned including the taxpayer.

Especially in this day and age where deficits are running into the TRILLIONS of dollars!!

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This is my first post. We are contemplating using LPTA for a Design Build to be competed among three IDIQ contractors. We have very little time, so we have thought of opening the prices, then giving the technical package of the lowest priced proposal to the evaluation team to have them say whether he is technically acceptable. the evaluation team will not be told what the other prices are.

I note the concerns mentioned above about not opening the techanial proposals of the other contractors, but I think it is best that the evaluation team not be influenced by higher, or lower, quality proposals in grading. It's either go or no-go. Has anyone actually done this yet? If so., what was the result.

Marv, I believe your approach is fine. However, let me add a suggestion. If you must send your source selection decision to a higher level for approval, I suggest you check with someone at the higher level to assure they support your approach. I have run across instances where the HQ did not like the approach you describe.

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In reference to a "streamlined" LPTA process, it appears the Army uses it. The Army's Mission and Installation Contracting Command has a Source Selection Guide Book at: http://www.acc.army.mil/micc/micc-guides.html

The Army guide states: "An option the KO may consider when using a LPTA approach is to stipulate in the solicitation that the government reserves the right to evaluate the lowest priced proposal first and if it is acceptable then make award to that offeror. In the event that the lowest price proposal is not acceptable, then the second lowest proposed price proposal is evaluated and if acceptable then award to it, and so on. However the success of this approach is dependant upon the quantity and quality of proposals received. This approach can provide the KO tremendous flexibility in streamlining the evaluation process."

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Guest Vern Edwards

The advantages of the process are apparent to all but lifelong PWACs.

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See matter of Gold Cross Safety Corporation, B296099, here: http://www.gao.gov/decisions/bidpro/296099.pdf. While not directly on-point, in Gold Cross the GAO states:

"?Since Gold Cross could not receive the award due to its unreasonable price, the results of any technical evaluation the agency may have subsequently performed were immaterial; even if Gold Cross? technical submission received the highest possible rating, it could not receive the award due to its unreasonable price."

Substitute the phrase "because there was a lower-priced, technically-acceptable offeror" for the phrase "due to its unreasonably price," and viola. There, as here, a technical evaluation would be "immaterial."

Thoughts?

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See matter of Gold Cross Safety Corporation, B296099, here: http://www.gao.gov/decisions/bidpro/296099.pdf. While not directly on-point, in Gold Cross the GAO states:

"?Since Gold Cross could not receive the award due to its unreasonable price, the results of any technical evaluation the agency may have subsequently performed were immaterial; even if Gold Cross? technical submission received the highest possible rating, it could not receive the award due to its unreasonable price."

Substitute the phrase "because there was a lower-priced, technically-acceptable offeror" for the phrase "due to its unreasonably price," and viola. There, as here, a technical evaluation would be "immaterial."

Thoughts?

Be careful, the Gold Cross case is not on point for a couple of reasons. First, it involves a best value source selection. This thread is dealing with a source selection made to the lowest priced, technically acceptable offer. Second, in Gold Cross, it is significant that the protestor's price was 8 to 20 times higher than other prices and the Government estimate. In the case of LPTA, the variance in prices among offers is irrelevant so long as you award to the technically acceptable offer with the lowest price.

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Be careful, the Gold Cross case is not on point for a couple of reasons. First, it involves a best value source selection. This thread is dealing with a source selection made to the lowest priced, technically acceptable offer. Second, in Gold Cross, it is significant that the protestor's price was 8 to 20 times higher than other prices and the Government estimate. In the case of LPTA, the variance in prices among offers is irrelevant so long as you award to the technically acceptable offer with the lowest price.

Actually, an LPTA procurement is part of the best value continuum. I believe the distinction you were trying to make is a Tradeoff Process (FAR 15.101-1) vs LPTA (FAR 15.101-2).

I think GeoJeff was trying to point out what he views to be a general principle that applies to both types of procurements. Specifically, an offeror's price may be so high that it renders the proposal ineligible for award regardless of the technical merit or rating of the offer. In a tradeoff procurement, that will happen if, as GAO says, the "quoted price [is] too high in an absolute sense." In an LPTA that will happen if another technically acceptable proposal offers a lower price.

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Quote

Actually, an LPTA procurement is part of the best value continuum. I believe the distinction you were trying to make is a Tradeoff Process (FAR 15.101-1) vs LPTA (FAR 15.101-2).

Unquote

In its decision, the GAO described the basis of award as "best value". Typically, a source selection using factors in addition to cost or price is called "best value".

Quote

I think GeoJeff was trying to point out what he views to be a general principle that applies to both types of procurements. Specifically, an offeror's price may be so high that it renders the proposal ineligible for award regardless of the technical merit or rating of the offer. In a tradeoff procurement, that will happen if, as GAO says, the "quoted price [is] too high in an absolute sense." In an LPTA that will happen if another technically acceptable proposal offers a lower price.

Unquote

The thread commenced with this question: "When conducting a lowest price technically acceptable source selection (see FAR 15.101-2), if the offeror with the lowest price is technically acceptable, may the agency award to that offeror without evaluating the technical acceptability of the other offerors?". The Gold Cross case involved an extraordinarily large price differential, and it did not address whether or not the contracting officer is obligated to perform a technical evaluation of all offers. Thus, I don't think it offers support for a "Yes" answer to the initial question.

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Although the second part of LPTA "Technically Acceptable" was discussed in some detail here, not much was said about the "Low Priced".

This sounds simple but in a recent procurement I witnessed, the price part of the offerors proposals included the following price factors:

1. Percentage Mark-up Rates

2. Mark up Rates Elements

3. Overtime Rate

4. Conversion Rate

5. Prices for Other Services

This was a non-personal services IDIQ contracting for administrative support services. After determining who was technically acceptable, the CO made an award decision based only on the Percentage Mark-up Rates. The problem came during the debriefing when the CO stated only the Mark-up rate was used to determine the low priced offeror and he did not evaluate the other price related factors contained in the RFP.

A protest soon followed stating he did not substantiate the selected offeror was actually the low offeror. To make it worse the CO would not release the base labor rates of the selected offeror to the unsuccessful offeror.

For this procurement, perhaps LPTA was not the correct choice. I just wanted to address the low price side of this issue and see if anyone had any comments.

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buddyandme,

At the risk of moving the discussion off point, I would suggest that the "price" in the LPTA must be the price the government is likely to experience under the contract (typically including all options likely to be exercised). There are a ton of cases on point, but consider SmithKline Beecham Corp., B-283939, Jan. 27, 2000 (?The Competition in Contracting Act requires that agencies consider the cost to the government in evaluating competitive proposals. While it is up to the agency to decide upon an appropriate and reasonable method for proposal evaluation, it may not use an evaluation method that produces a misleading result. Such method must include some reasonable basis for evaluating or comparing the relative costs of proposals, so as to establish whether one offeror?s proposal would be more or less costly than another?s.? (citations omitted)); Environmental Technologies Group, Inc., B-236813.2, Dec. 20, 1989, 89-2 CPD ? 573 (agency may not aggregate every quantity range (or quantity band) in coming up with the evaluated price; rather, actual quantity needed by the agency must be used); John C. Grimberg Co., B-284013, Feb. 2, 2000 (agency cannot sum alternates); Ahern & Associates, Inc., B-254907.4, Mar. 31, 1994, 94-1 CPD ? 236 (in dealing with alternatives, construing ambiguous RFP in light of the law??since the evaluation of bids must be based on what the actual likely cost to the government will be and the cost of each element of work may be taken into account only once??to ?require award to be based on the lowest total evaluated price for the actual work to be performed.?).

While this doesn't preclude using a number of price-related subfactors, there must be a single evaluated price that is used for purposes of any trades, and there must be a single evaluated price (that reflected the government's likely experience over the life of the contract) that represents the "price" in an LPTA.

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For this procurement, perhaps LPTA was not the correct choice. I just wanted to address the low price side of this issue and see if anyone had any comments.

Whether you are using the LPTA Process or the Tradeoff Process (i.e. Best Value), you must evaluate price. To do so, you must consider all the price factors identified in the solicitation. In your case, if the solicitation did in fact announce that the price evaluation would consider 5 price subfactors, the contracting officer is obligated to consider them whether using LPTA or BV to make the award decision. As Monsieur Jacques has stated, the factors roll up into a single evaluated price reflecting the likely dollar outcome of the contract.

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I suspect Don Acquisition's post referencing FAR 15.305 answers the mail. Consider Al Ghanim Combined Group Co. Gen. Trad. & Cont. W.L.L. v. U.S., 56 Fed.Cl. 502, 519 (2003) (pointing out that FAR ? 15.305(a)(3)'s requirement to assess "each offeror's ability to accomplish the technical requirements" does not apply to LPTAs) (dicta). Absent the QC function already discussed, it seems of limited or no value-added to require evaluating whether an offer higher in price than an acceptable proposal is acceptable, and I see nothing in the FAR requiring it. Even when conducting discussions, FAR 15.305©(1) & (2) call for "evaluating all proposals in accordance with FAR 15.305(a)." It doesn't call for evaluating all proposals (full stop), but doing so IAW FAR 15.305(a). FAR 15.305(a), of course, includes 15.305(a)(3), which expressly does not require a technical evaluation unless tradeoffs are performed.

I'm not suggesting an economical LPTA is the only or best way, but it seems permissible. For instance, it (or any LPTA) may not be best suited for cost-reimbursement contracts. If the evaluation includes cost realism or any other price adjustment, the evaluation needs to keep that it mind. While I don't see how a higher priced offeror could be prejudiced, the government would have a harder time showing the protester is technically unacceptable. That said, all else being equal, fewer evaluations would hopefully result in better evaluations.

I do have a concern with using this approach when discussions are likely. An offeror is free to change any aspect of its proposal at FPR, including its price. If discussions are limited to the low offerors whose proposals are either acceptable or reasonable susceptible of being made acceptable, what happens if all the offerors found technically acceptable after discussions raise their prices, such that the lowest priced technically acceptable offeror remaining in the competitive range is now higher in price than an offeror previously excluded? While this may not be likely, as the offeror acceptable before discussions is less likely to change its price, it is a concern.

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sorry about resurrecting an old discussion, but this has some good points and would like to pose this question.

We are currently in the process of looking at the potential pros and cons for utilizing this method. ( I am providing background and advise to the KO, not the KO nor in their chain)

We are considering utilizng an LPTA for a requirement ( Support services) and the contract type will be CPFF. ( to use LPTA for LOE services is another discussion, thanks)

In our discussions with Legal, it has been identified that IAW FAR 15.404-1(d)(2) Cost realism analyses shall be performed on cost-reimbursement contracts to determine the probable cost of performance for each offeror.

The KO stance is that we don't have to evaluate each offeror and we can award to the the lowest priced offeror if they are technically acceptable.

The Attorneys stance is that in a cost environment, you have to evaluate all offerors for technical acceptability and then do cost realism based upon the above citation for each offeror based upon the above cite.

( Legal has no issue in a FP environment with this methodology)

I am tending to agree with the attorney, however want to make sure I am not missing anything. ( Caveat - I have utilized this methodologyseveral times without much success (FFP), the lowest offeror(s) were never technically acceptable, so ended up evaluating them all, so my support of this method is limited, good in theory, so so in practice)

What are y'alls thoughts on doing economical LPTA on a cost contract in light of FAR 15.404-1(d)(2)

Thanks appreciate any and all comments

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The approach certainly seems plausible, though I have no personal experience with it. I would want to be fairly certain that the evaluation team would be able to determine the government's adjusted realistic price without entering into discussions.

Whether it will likely result in best value depends on your specific facts and circumstances. Use of the LPTA technique for the award of cost reimbursement contracts (whether using this "economical" approach of not) seems to put a great deal of emphasis of an aspect of the proposal where the government may have the least confidence. That said, sometimes the government isn't particularly confident about any of the other traditional evaluation areas (e.g., technical proposals amounting to "liar's contests," horrible inter-rater reliability when evaluating past performance).

You certainly know what the two protest allegations are going to be: (1) The government should have made a greater upward adjustment of the apparent successful offeror's proposed price in arriving at an evaluated price; and (2) the awardee should have been determined to be technically unacceptable. It would seem at least one traditional bid protest defense would no longer be available: It would be speculative to say that the protester is not next in line for award when the offer who appears to be next in line may not be if its price is unrealistically low, but the only offeror for which you have conducted a price realism evaluation is the apparent successful offeror.

I would encourage you to be very clear in your mind, clear with the team, and clear in the solicitation as to how discussions will be handled. It has been my experience that, even when the government truly wants to award without discussions, no offer is awardable based on initial proposals.

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I think you would have to evaluate the cost realism of each offeror. Then, you would evaluate the technical acceptability of the offers starting with the one proposing the lowest probable cost plus fee. If it were technically acceptable, then you'd be done. There would be no need to determine the technical acceptability of other offers.

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Guest Vern Edwards

I agree with airborne373's attorneys, with one proviso: Anyone who uses LPTA to award a cost-reimbursement contract is an idiot or an ass, should lose any warrant they have, should have their head shaved and their buttons cut off in front of a mob, should have their shoes set on fire, and should never, ever be allowed within 1,000 miles of another government contracting office, which probably means that they'll have to leave the country. And if you need me to explain why, you are a danger to national security.

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Don,

"Cost realism analysis is the process of independently reviewing and evaluating specific elements of each offeror's proposed cost estimate to determine whether the estimated proposed cost elements are realistic for the WORK TO BE PERFORMED; reflect a clear understanding of the requirements; and are consistent with the unique methods of performance and materials described in the offeror's technical proposal." FAR 15.404-1(d)(1). Unless the criteria being evaluated under technical acceptability somehow do not relate to "the work to be performed," I'm not sure I see the point in conducting a cost realism analysis of a proposal that may not be technically acceptable. It seems to put the cart in front of the horse.

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Thanks all,

And yes I have been called an idiot and an ass but never a threat to national security. ( maybe it was becauses exes were calling me that :D )

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Guest Vern Edwards

You're only a threat to national security if you don't understand why LPTA for a cost-reimbursement contract is stupid.

Do you not understand? Say it ain't so, Airborne Thunder. Tell me you wouldn't do it even at gunpoint.

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Let's just say sometimes lesson you learn that stick with you are the ones that ....

LPTA is a method. Sometimes the right one sometimes not.

Experience is a great teacher.

Would I do it today. No

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