Moving Towards “Technically Exceptional:” Perceptions of LPTA Procurements - (Archived)

More than 200 members of the government contracting community gathered at the Gannett Conference Center in McLean last week to gain key insights into the impact of Lowest Price Technically Acceptable (LPTA) procurements on both government and contractors.

The event brought the industry’s best and brightest together to discuss how the use of LPTA procurements is affecting contractors and the deliverables government receives under LPTA contracts. The new study from Market Connections, Inc. and Centurion Research Solutions revealed that while LPTA may sacrifice long-term value for short-term cost savings, LPTA is the “new reality” in government procurement, at least for the foreseeable future.

Lisa Dezzutti, President & CEO of Market Connections, Inc., presents the findings of the LPTA Impact Study, which reveals government and industry perceptions of LPTA procurements.

Lisa Dezzutti, President & CEO of Market Connections, Inc., presents the findings of the LPTA Impact Study, which reveals government and industry perceptions of LPTA procurements.

With this new reality, contractors need to adjust operational and pursuit strategies to maintain success.

“As a result of LPTA, we are asking our contracts person to be more proactive across the board as wall as take on more of a relationship management role for government customers,” said panelist Ray Whitehead, vice president of business development and strategic planning at General Dynamics Information Technology (GDIT).

In the survey, government contractors said they are proposing less innovative solutions, reducing indirect rates, relying more on junior staff and reducing staff and salaries in response to the budget squeeze LPTA procurements necessitate.

Dezzutti was joined by panelists (from left to right) Deb Alderson, President & CEO, Sotera Defense Solutions; Michael Fischetti, Executive Director, National Contract Management Association; George Obertubbesing, Vice President of Business Development, Harris IT Solutions; Ray Whitehead, Vice President of Business Development and Strategic Planning, GDIT.

Dezzutti was joined by panelists (from left to right) Deb Alderson, President & CEO, Sotera Defense Solutions; Michael Fischetti, Executive Director, National Contract Management Association; George Obertubbesing, Vice President of Business Development, Harris IT Solutions; Ray Whitehead, Vice President of Business Development and Strategic Planning, GDIT.

Fritzi Serafin, Vice President, Research Services, Centurion Research Solutions, discusses how Centurion identified $27.7 billion in actionable LPTA opportunities using its Business Intelligence NOW™ opportunity tracking tool, with an average annual value of $18 million.

Fritzi Serafin, Vice President, Research Services, Centurion Research Solutions, discusses how Centurion identified $27.7 billion in actionable LPTA opportunities using its Business Intelligence NOW™ opportunity tracking tool, with an average annual value of $18 million.

Among the key findings that were discussed from the survey results:

  • LPTA sacrifices long-term value: 65% of contractors and 43% of government employees believe that LPTA procurements sacrifice long-term value for short-term cost savings.
  • Less qualified contractors win LPTA contracts: Both audiences (71% contractors and 59% 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.
The panel and audience expressed a desire to help move the government toward a “technically exceptional” mindset.

The panel and audience expressed a desire to help move the government toward a “technically exceptional” mindset.

Obertubbesing and Whitehead answering attendee questions.

Obertubbesing and Whitehead answering attendee questions.

The panelists’ discussed how being an incumbent is no longer an advantage. This challenges contractors to continue to provide value and better leverage their existing customer knowledge and insights.

“As an incumbent, you have customer access during the pre-RFP stage which provides you with the opportunity to help them define what is technically acceptable – this will allow you to protect your turf,” said Obertubbesing.

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The panel takes questions from the audience.

The past year has brought great uncertainty within the federal government, and the total impact on the contracting industry is still unknown. This survey and the LPTA impact event allowed decision-makers to share their insight and gave attendees a platform to openly discuss their concerns.

For those of our readers who missed the event, Market Connections and Centurion Research Solutions will present the study findings during a webinar on November 19.  Click here to register.

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