In Negotiated Procurements under FAR Part 15, What’s the Difference Between LPTA and Tradeoff?

In the source selection process known as Lowest Price Technically Acceptable (LPTA), price is the most significant evaluation factor in the procurement.  The technical aspects of a proposed supply or service are well-defined and noncomplex.  A proposed solution found to meet the requiring activity’s minimum needs can be evaluated on a noncomparative basis of “acceptable” or “unacceptable” without need for negotiations, amendments to the solicitation’s work statement, or revisions to proposals initially submitted.  Past performance is not an important nonprice factor because it can be waived by the procuring contracting officer (PCO) with a written determination in the contracting file.  As long as the lowest price is determined to be fair and reasonable, award can be made to the technically acceptable proposal, and the government can expect to have selected the best value using this process.  Here, there is no need to conduct discussions with offerors because the requirement is one understood by industry, and the government’s work statement reflects those industry performance standards, metrics, and objectives that can be easily applied in evaluating the proposals.     

The other source selection technique available under FAR Part 15 is one where the government is willing to trade price for a better or higher technical solution offered by industry.  This is typically the best procurement approach when the requirement is not well defined or is highly complex.  The government recognizes no amount of market research or organic expertise in the agency is a substitute for the subject-matter expertise of industry.  In addition, a source’s past performance or recognized experience also is a key nonprice factor for evaluation as to whether the government should pay a price premium for a proposed solution that meets or exceed minimum needs.  This is typically the procurement method used when the requirement is a nondevelopmental or developmental need.  The government’s work statement, whether a performance work statement (PWS) for a service or a statement of work (SOW) for an item of supply or construction project, might be sufficiently detailed in the method or outcome / end result, but the government seeks added benefits by encouraging offerors to propose additional aspects or a more technical or innovative solution for which a higher price may be justified.  And altough the PCO selects the procurement approach, in this acquisition the end user also has an interest in using a tradeoff source selection as it is agreeable to paying a higher price for the value achieved through a higher technical solution.  With this procurement method, there is an expectation the PCO will select the most highly rated offers for inclusion in a competitive range so the government can negotiate (e.g., have one-on-one discussions) with offerors leading to revised proposals from which the government can select the offer representing the best value in technical approach for the price paid.

Arguments for and against using LPTA.  

     Generally, negotiated procurements under FAR Part 15 have a longer procurement timeline and involve more government resources than those under FAR Parts 13 (Simplified Acquisition Procedures) or 14 (Sealed Bidding).  Depending upon the estimated value of the procurement, acquisition planning can begin a year or more in advance as the PCO may use market research conducted as much as 18 months prior to award.  If the need is “well-defined,” such as one that is repeatedly procured on a cyclic basis, is a commercial item, is not highly complex or offering increased risk based upon a number of performance unknowns, the technical quality or aspects of the proposal should not require extensive, subjective evaluation.  As such, it is highly likely the government has sufficient organic resources to evaluate the technical proposals using easily understood and applied objective evaluation criteria.  Moreover, based upon the requirement, once it is determined to meet the minimum needs of the government, the award can be made quickly because best value is expected to be achieved by selecting the lowest price, found to be fair and reasonable.

     A negative aspect of the LPTA procurement method is that where a solution is offered that exceeds the government’s minimum needs and it would be worth a higher price premium, the government cannot select it.  Otherwise, it would have to articulate a reasonable basis for cancelling the solicitation and re-soliciting using a different source selection technique, here, tradeoff.  This could subject the government to protest by offerors, which would result in a lengthened procurement timeline and a longer wait for the end user.  Another undesirable aspect of LPTA is the negative connotation associated with this process when it is referred to as a “lowest bid” contracting process. In this case, there is the assumption that technical considerations do not come into play in awarding the contract.  This is not accurate but is likely the result of hasty or careless LPTA procurements where the lowest priced offer was selected only to result in performance or other quality issues during contract administration.

Examples of when it might or might not be appropriate to use the LPTA approach.

     If the requirement is for a service that is needed annually or on some cyclic basis and it is a commercial item with well-defined, industry standards of performance, LPTA is an appropriate procurement approach saving both the government and offeror time and resources.  For instance, federal military installations need contracted janitorial and custodial services for its dining facilities because military cooks cannot perform such tasks.  There are industry-recognized uniform standards and government-generated performance metrics set forth in recognized and accepted technical resources.  A source selection evaluation board can use clear evaluation worksheets to record its technical review of proposals against clear technical specifications set forth in the PWS and any solicitation attachments provided by the requiring activity (the government experts for this need).  Once the proposal is evaluated against the minimum requirements set forth in the solicitation and found to be acceptable, and the past performance is found to be recent, relevant, and satisfactory for past efforts of a similar type, there is no need in paying more because innovation or a higher technical solution is not necessary to meet the government’s need for cleaning the dining facility daily.

Scroll to Top