Vendors See Writing on the Wall When it Comes to Low Price Acquisitions

From Federal News Radio | October 25, 2013

Vendors are on edge and growing more nervous about the state of the federal acquisition environment. Blame sequestration. Blame the government shutdown. But the real culprit is LPTA — lowest price, technically acceptable — an approach to evaluating procurements that is changing the federal acquisition landscape.

And all signs point to agencies continuing to use this approach in the coming years to buy goods and services, thus forcing federal contractors to have no choice but to adjust.

“We have to accept lowest price may just be best value for the government customer,” said Lisa Dezzutti, president and CEO of Market Connections, during a briefing to industry on new research and a new survey of how LPTA is impacting the government market. “We have to pursue new and lower cost business models.”

For the last two decades, agencies have strived to use best value instead of low cost, where the idea is if the vendor is providing more and better services than required and it costs more, that’s acceptable.

But Centurion and Market Connections say the data shows the pendulum has swung toward lowest price, technically acceptable.

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