Study: LPTA Sacrifices Long-term Value, Stifles Innovation

From FCW | October 24, 2013

What: A report released Oct. 24 by Market Connections and Centurion Research Solutions titled The New Reality: The Impact of LPTA Procurements on Government Contracts and Solutions.

Why: Lowest Price Technically Acceptable (LPTA) contracts drive down prices for government contracts, but 375 government contractors and 360 civilian and defense decision-makers in government polled in the survey suggest such contracts also drive down innovation and sacrifice long-term value for short-term cost savings.

Verbatim:

  • 65 percent of contractors and 43 percent of government employees believe that LPTA procurements sacrifice long-term value for short-term cost savings.
  • Both sides (71 percent contractors and 59 percent government) see the same two main drawbacks of LPTA for the federal government: The potential for contracts to be awarded to less qualified companies and sacrificing long-term value for short-term cost savings.
  • Two-thirds of contractors (63 percent) are likely to equate a request for proposal specified as “best value” as an LPTA RFP despite the fact that best-value and LPTA differ by definition. Best value is an evaluation that compares cost and non-cost factors.

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