Guest Author: Kimberly Heifetz, Counsel, Thompson Coburn LLP, writes:
On the best value continuum (FAR 15.101), source selection approaches that weight non-cost/price evaluation factors and significant subfactors collectively as equal to or more important than price and which involve “tradeoffs” between non-cost factors and price/cost factors (allowing for selection of other than the lowest priced offeror or highest technically rated offeror), are preferred (and generally better suited) for acquisition of non-commercial and complex services or supplies. Yet, use of LPTA remains high as the government seeks the lowest price for needed supplies and services, in the face of tight budgets and the depletion of funds. Successful LPTA proposals require a different approach than source selection processes that place less emphasis on the bottom line.
The government evaluates LPTA proposals for “acceptability,” but it cannot rank competing LPTA proposals using non-cost factors or otherwise conduct a tradeoff. So, while Section M must include evaluation factors and significant subfactors for purposes of determining whether a proposal is “acceptable,” such non-cost factors serve no further purpose. For example, non-cost factors can (but need not) include past performance, but even when included as an evaluation factor, past performance may only be used to determine whether an individual proposal is acceptable, not to compare the respective past performance of the offerors. This leaves price as the true discriminating factor.
LPTA is appropriate only when the government “expects” it can achieve best value from selecting the proposal that is technically acceptable and offers the lowest evaluated price. (FAR 15.101-2.) This analysis necessarily is conducted before the government issues the solicitation and offerors submit proposals. This “best value” determination used to justify an LPTA source selection process is different than the best value analysis achieved via tradeoffs – indeed, it is performed before the government could possibly know what potential performance-enhancing, potentially cost-saving features a proposal might include that would favor award to a higher-priced offeror based on superior ratings on non-cost factor and subfactors.
With price as the tipping point between otherwise technically acceptable proposals, offerors must focus their proposal efforts and strategy on establishing a competitive (yet realistic) price for a solution that satisfies the non-cost factors just enough to be deemed “acceptable” (i.e., not excluded from the competition), yet does not include enhancements or other demonstrations of know-how, flexibility, ingenuity, or reliability that would result in extraneous costs that would threaten to push the offered price higher than the lowest price. Costs that might reasonably and efficiently support a technical or performance-based standout proposal could easily result in a higher-priced proposal subject to certain rejection under LPTA. Achievement and demonstration of satisfaction of non-cost factors and subfactors simply allow an offeror to stay in the competition, while overachievement or exceptional demonstration likely will cost an offeror the award.