By Sareesh Rawat
Defense Information Systems Agency (“DISA”), the premier Information Technology combat support agency for Department of Defense (“DoD”) released its much-anticipated $17.5 billion Indefinite Delivery Indefinite Quality (“IDIQ”) contract earlier this year. Even prior its release there was much controversy surrounding the multiple-award IT solutions contract, as ENCORE III was to be competed on a Lowest Price Technically Acceptable (“LPTA”) basis. Under this source selection methodology, DISA will rank the bidders in ascending order of proposed price and award the lucrative contract to the 20 lowest-priced, technically acceptable bids. The selected contractors would then compete against each other on task-order level throughout the duration of the ten-year contract. Even though it is quite possible that ENCORE III as a contract vehicle may never reach its award ceiling due to an excess of contract vehicles currently at government’s disposal, missing out on such an IDIQ is would still cause major concern for prominent contractors, as it could mean hundreds of millions in lost business.
It was perhaps not surprising that Booz Allen Hamilton, Inc., and CACI International, Inc., who were together obligated a surplus of $5.3 billion for fiscal year 2015, lodged pre-award protests with the Government Accountability Office (“GAO”) based on DISA’s use of LPTA. GAO upheld the protests in part stating that DISA’s evaluation methodology failed to provide a reasonable basis to compare the cost of competing proposals. However, it did not crack down on the Lowest Price Technically Acceptable (“LPTA”) methodology used by DISA, which was at the heart of the protests. In its decision, GAO stated that DISA reasonably determined that it could meet its needs using a LPTA approach and clarified that “agency acquisition officials have broad discretion in the selection of the evaluation criteria that will be used in an acquisition.”
In response to GAO’s decision, DISA issued amendments 5 and 6 to the Request for Proposal on September 15th and 23rd 2016 respectively. DISA altered its evaluation approach in the latest RFP amendments by using bidders’ cost reimbursable rates in calculation of their proposed total evaluated price and asked contractors to resubmit their bids. However, it predictably persisted with the LPTA methodology. The GAO decision was therefore a disappointment to a lot of government contractors that hoped it would be the beginning of the end for LPTA source selection in defense contracting.
Last year the undersecretary of Defense for Acquisition, Technology and Logistics, Frank Kendall issued a memo on the appropriate use of LPTA. In his memo, Kendall stated that LPTA as a source selection process should only be used when “there are well-defined requirements, the risk of unsuccessful contract performance is minimal, price is a significant factor in the source selection, and there is neither value, need, nor willingness to pay for higher performance.” Citing Kendall’s memo as a guideline, the protestors reasonably argued that ENCORE III did not meet the criteria for a LPTA evaluation. However, GAO denied the protest on this issue and stated that the protestors’ disagreement with DISA’s evaluation approach did not reasonably demonstrate that the government couldn’t meet its needs using a LPTA approach.
While this GAO decision can be considered a win for LPTA, its use as a prominent DoD source selection methodology may yet be short-lived. Earlier this year, the Promoting Value Based Defense Procurement Act was introduced in the House and Senate. If passed, this bill would pose severe restrictions on DoD’s use of LPTA by revising the Defense Federal Acquisition Regulation Supplement. The bill would require DoD contracting officers to avoid the use of LPTA in procurements of Information Technology and Auditing. If a contracting officer still persists with the use of LPTA as a source selection process, he would be required to provide a justification for his decision. As cybersecurity threats and risks of hacking increase, this bill makes sense because the use of LPTA in defense contracting potentially makes the government more vulnerable as contractors’ quality of work is arguably compromised due to lowered costs. While LPTA can be an effective tool to limit costs and perform under budgetary constraints, its use in defense procurement is misplaced. Instead, a best value trade-off approach where the government considers the merits of contractors’ technical solution along with associated costs is much more practical as it gives the contractors an incentive to propose a more rounded solution.
While both DISA and GAO have missed an opportunity to cut the use of LPTA in defense procurement, its use would be far more limited moving forward if the bill is passed.
The ENCORE III solicitation can be found on FedBizOpps.gov here. Contractors are to submit their responses by October 21st, 2016.
 Gen. Serv. Admin., Federal Procurement Data System – Next Generation Top 100 Contractors Report (2015).
 Matter of: Caci, Inc.-Fed.; Booz Allen Hamilton, Inc., B-413028 Comp. Gen. B-413028.2, B-413028.3 (2016).
 Memorandum from Frank Kendall, Under Secretary of Defense for Acquisition, Technology and Logistics to the Sec’y of the Military Dep’t, Chairman of the Joint Chiefs of Staff, Under Sec’y of Def. (Comptroller), Gen. Counsel of the Dep’t of Def., Inspector Gen. of the Dep’t of Def., Dir. Admin. and Mgmt., Dir. of the Def. Agencies, Dir. of the DOD Field Activities, President Def. Acquisition Univ., Deputy Assistant Sec’y of the Army (Procurement), Deputy Assistant Sec’y of the Navy (Acquisition and Procurement), Deputy Assistant Sec’y of the Air Force (Contracting) (Mar. 04, 2015) (on file with author).
 Promoting Value Based Defense Procurement Act, S.2826, 114th Cong. (2016).