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How to Win Contracts When Lowest

Price Is the Highest Measure


May 24, 2013
By Bev Cooper
E-mail the Author
The lowest price technically acceptable (LPTA) acquisition strategy, which focuses on price over
value, has become the dominant approach that agencies are applying to federal contracting. The
accelerated transition to this strategy has been fueled by sequestration and the growing need for
government to do business at a reduced cost. Contractors are still learning how to operate in this new
environment, but many fear that the emphasis on lower cost labor will reduce the expertise of the work
force and result in lower levels of effort.
The LPTA strategy is a step down from best value, admits Tony Constable, president, CAI/SISCo, a
company that provides business development support services to industry. In a best value contract, the
winning proposal is chosen based on an aggregate view about the perceived value, and that value is
tempered somewhat by price. Even if the underlying contract switches from one contractor to another
one, the new company could still retain much of the trained labor force. In an LPTA contract, the price
not the solutionis the primary decision criterion, and this affects labor pricing much more so than it does
product pricing.
Being an incumbent contractor is the worst place to be on an LPTA bid, because the needed flexibility in
labor prices requires huge salary and benefit cuts. Constable calls it the race to the bottom as it relates to
labor, but he also acknowledges that the LPTA strategy is reasonable to a point depending on the work.
One positive aspect is that price is now at the foundation of contracts. In addition, contractors are
volunteering more innovation in their bids, according to Constable. LTPA also creates opportunities for
newer federal marketplace entrants, both companies and younger employees. Contractors are learning
how to use information more effectively, and they are pricing to win and managing to price.
Unfortunately, the technically acceptable concept is still a painfully loose standard, and a lot of moving
parts are involved that make this hard for industry to respond to efficiently. In addition, no one knows what
happens when you do not have an incumbent staff, he adds.
To win an LPTA bid, Constable recommends that a contractor focus on the companies that it is
competing against as a first priority. This requires good situational awareness to figure out what the
competitors can do and then to develop a price to beat that measurement. Once you know the price to
beat, you can get there through strategy, he says. That means, you must determine the lowest bid that
will allow you to still be profitable, he explains.
J.J. Anderson, senior director, business development operations, Centuria Corporation, says, Set the
price up front, and work the proposal to fit that price, describing what he calls the inverted proposal
process. It isnt that hard to find the contract ceiling and to determine who is the competition.
Federal agencies and contractors both have to adapt to the new LPTA reality, Constable states, adding
that the acquisition people are already declaring victory. It is a new paradigm for federal contracting, but
these come and go, and we must roll with them, he relates. It is a pain, but it is change, and we hate
change, he allows.
What is interesting is that government may become successful in using LTPA to obtain adequate support
at reduced prices, says Constable. We are at the beginning of a journey to try to understand where this
is going.
What are your experiences with LPTA contracts, and do you agree that there are positive aspects in the
strategy?


LPTA
Seven facts you need to know about LPTA
By Mark Hoover
Oct 24, 2013
Lets face it: lowest price, technically acceptable contracting is here to stay. It isnt
going anywherenot anytime soon, at leastso its important to learn the facts so
that you can remain competitive in the LPTA era.
Fact one: There are $27.7 billion in LPTA contract opportunities, according to an
analysis by Centurion Research Solutions, who along with Market Connections
produced an LPTA conference on Thursday. The opportunities range from meager --
$40,000 -- to huge -- $6 billion. The average is a healthy $70 million with an average
timespan of 3.6 years, and an average annual value of $18 million.
In term of agencies who most utilize LPTA procurement, the Defense Department
leads with $6.5 billion. Following the Defense Department is the Navy with $5.6
billion, the Army with $4.3 billion, the Veterans Affairs Department with $4.2 billion
and the Air Force with $2.1 billion.
Fact two: A survey of 375 government contractors and 360 federal government
decision makers by Market Connections found that 31 percent of federal employees
said they were very likely to issue an LPTA RFP, with 33 percent answering that they
were somewhat likely; thats 64 percent all together.
Only a combined 14 percent said they were unlikely to issue an LPTA RFP.
Forty-six percent of federal employees said the biggest reason they are using LPTA
is because of limited budgets and efforts to save money.
Sequestration means less money all around, so we have to make the most out of the
remaining money, one federal employee was quoted as saying.
Other reasons why LPTA RFPs are issued are because it is a standard practice (17
percent), to get supplies/commodities/reoccurring purchases (10 percent), if
requirements are well-defined (8 percent), because it is fast (4 percent) and because
it simplifies the contracting process (3 percent).
Fact three: From a government perspective, there is a variety of benefits from
LPTA contracting. Forty-five percent of federal employees answered that it controls
costs. In close second, 43 percent answered that it is economical for
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product/commodity procurements. Thirty-nine percent said that it has simple
criteria to follow for award.
But the government sees a darker side as well, with 59 percent of federal employees
saying that the main drawback to LPTA is that contracts may be awarded to less
qualified companies, showing that the government is at least aware of LPTAs danger
in some cases.
he number two drawback, for 43 percent of federal employees, was that LPTA
procurement sacrifices long-term value for short-term cost savings. Thirty-eight
percent said that past performance not being taken into account is a drawback, and
31 percent said that LPTA acts to lower the contractors standard of performance.
Fact four: Contractors are facing pressures and have little choice but bid on LPTA
contracts. The top reason cited in the survey for contractors pursing LPTA RFPs
is the shrinking number of opportunities (61 percent). Other reasons included having
in-depth knowledge of customer requirements (50 percent), to maintain current
relationship (48 percent), an opportunity to get a foot in the door (46 percent) and
because of a highly competitive marketplace (44 percent). Contractors also answered
that a good sense of the competitive landscape will get them to respond to an LPTA
RFP (34 percent).
Contractors have their reasons for not responding to LPTA RFPs, also. Seventy-nine
percent of the contractors answered that the number one reason they wont respond
to an LPTA RFP is because there is no opportunity for value added solutions. Other
reasons included that they cannot be competitive on price (56 percent), that they
lack knowledge of the competitor landscape (26 percent), they lack knowledge of
customer (21 percent), and that there is a lack of long-term opportunities (19
percent).
When LPTA procurements are going down, though, there are a number of challenges
that contractors face. The number one challenge, according to 57 percent of
contractors, is that decisions are being based on price, regardless of potential quality
of work or ability to perform. The second biggest challenge was a tie, with 49 percent
of contractors feeling compelled to offer a lower price solution that may not be in the
best interest of the government, and being unable to differentiate against
competition.
Fact five: Unfortunately, this is the procurement landscape of today, and
contractors have been affected already. Most reported that the LPTA landscape has
made for less innovative solutions on their part (63 percent), while others said that
they have been reducing indirect rates (53 percent), relying more heavily on junior
staff (47 percent), reducing staff (39 percent) or freezing salaries (33 percent).
Fact six: Contractors need to be proactive and make strategic moves to succeed and
many have already been employing certain strategies in order to remain competitive.
Organizational strategies include creating new divisions or cost centers, reducing
benefits of current employees, and recruiting a low-cost workforce.
Page 2 of 3 Seven facts you need to know about LPTA -- Washington Technology
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Market strategies include pursuing non-government markets and modifying service
and product offerings.
Partner strategies include pursuing new partnerships, and employing low-cost
subcontractors.
Bid and capture strategies include being more selective in pursuits of contracts,
building relationships to influence what qualifies as technically acceptable, and
reducing B&P budgets.
Fact seven: The survey results showed that LPTA's use is expected to increase in
the next few years. Seventy-three percent of contractors and 65 percent of federal
workers point to fiscal restraints/budget cuts as being the top reasons. Much smaller
percentages pointed to a shrinking workforce, federal mandates to use LPTA, and the
fact that LPTA is faster and easier as being reasons for the increase.
Click here for more information on this report.
About the Author
Mark Hoover is a staff writer with Washington Technology. You can contact him at
mhoover@washingtontechnology.com, or connect with him on Twitter at
@mhooverWT.
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8609 Westwood Center Drive, Suite 500
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Published on FierceGovernment (http://www.fiercegovernment.com)
LPTA contracts gaining favor among
agencies, but give vendors less incentive
to innovate, study says
October 28, 2013 | By Ryan McDermott
Lowest price technically acceptable procurements
have been gaining favor among agencies, but that
gives vendors less incentive to be innovative if the
approach costs more, an Oct. 24 Market Connections
and Centurion Research study says.
Under LPTA, agencies focus more on price than on
past performance as long as the vendor meets
minimal job requirements. So if a vendor comes to an
agency with a unique solution that costs more than a competitor who comes with a
more basic solution, the agency is more likely to choose the cheaper solution as long
as it meets the minimum requirements.
The practice has been utilized by the Defense Department through its Better Buying
Initiative, the study says, but has proliferated through other agencies as well.
The study showed that of the $27 billion in procurements it analyzed, the Veterans
Affairs Department was the biggest user of LPTA outside of the DoD.
The study found 56 percent of LPTA contracts were for construction, facilities and
operations. About 22 percent were for IT and professional services.
And though vendors aren't happy about LPTA contracts, they are adjusting to the
trend.
Page 1 of 2 LPTA contracts gaining favor among agencies, but give vendors less incen...
2/ 3/ 2014 http://www.fiercegovernment.com/node/90041/print
About 82 percent of contractors said they'd respond to an LPTA request for proposals,
but of those contractors, 61 percent said they'd respond only because there are fewer
opportunities and fewer contracting dollars available to win, the study says.
For more:
- go to the Market Solutions and Centurian Research study
Related Articles:
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SSA whistle-blowers in attorney-judge scheme testify about harassment
Army contracting personnel weren't aware of contracting rule
Source URL: http://www.fiercegovernment.com/story/lpta-contracts-gaining-favor-
among-agencies-give-vendors-less-incentive-inn/2013-10-28
Page 2 of 2 LPTA contracts gaining favor among agencies, but give vendors less incen...
2/ 3/ 2014 http://www.fiercegovernment.com/node/90041/print
Print
Friday - 10/25/2013, 11:02am ET
Jason Miller

@jmillerWFED
More Reports
Vendors see writing on the wall when it
comes to low price acquisitions
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."
Lowest price technically acceptable is not really a new concept when it comes to
acquisition evaluations, but it has been gaining favor among agencies, specifically the
Defense Department over the last few years. Through its Better Buying initiative, DoD
has offered LPTA as one of several approaches to improve how they buy goods and
services.
Now it seems civilian agencies are following suit. Centurion Research Solutions analyzed
more than $27 billion in procurements and found the Veterans Affairs Department is the
biggest user of LPTA among non-DoD agencies.
Within DoD, the Army, Air Force and Navy use this concept the most.
Price is most important
Under LPTA, agencies focus on price more than anything else as long as the vendor
meets the minimal requirements for the job.
This means that if a vendor comes in with an innovative approach to a problem, but it
costs three times more than their competitor who comes in with a basic solution that is
likely to be just as successful and costs much less, the government is likely to choose the
cheaper solution.
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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.
Ray Whitehead, the vice president of business develop and strategic planning for
General Dynamics IT, said LPTA has traditionally been used by the government for a
specific set of products or services.
"My understanding of the intent of LPTA is to be used when you can absolutely define
what's being requiredand the risk of contract performance failure is low," he said.
"Sometimes when you start getting into mission critical services, if that network goes
down, that's mission failure and that's high risk. Should we really be procuring that
service using an LPTA method?"
Market Connections and Centurion show that agencies are indeed expanding the types
of products and services bought through this approach.
Best value not forgotten
Centurion found 56 percent of the contracts it reviewed calling for LPTA were for
construction, facilities, operations and maintenance and housekeeping services, while 22
percent were for professional or IT services.
"We looked at the NAICS codes and the top three NAICs are transportation and
warehousing, manufacturing and wholesale trade," said Fritzi Serafin, Centurion's vice
president for research services. "The fourth ranking was professional, scientific and
technical services, which does include IT services, and there were many opportunities
but the values were not that high."
Centurion also researched how often agencies are calling for best value in procurements.
It found overwhelmingly, agencies still are using this term to describe how they want to
buy products and services. Centurion found agencies used the term best value in $744.5
billion in acquisition actions.
Market Connections also conducted a survey of 375 industry executives and 360 federal
acquisition professionals about LPTA. It found industry isn't happy, but is dealing with the
move to LPTA.
For example, 82 percent of the vendor respondents say they would bid on a contract that
called for LPTA. And of those 82 percent, 61 percent say they would respond because
there are fewer opportunities and fewer dollars available to win and therefore felt like they
had to.
Another reason contractors are willing to bid on LPTA procurements is because
incumbents are under more pressure to lower their costs than previously and there are
more opportunities to win work from them.
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Deb Alderson, president and CEO of Sotera Defense Solutions, said being an incumbent
contractor today is more of a risk than before.
RFPs more competitive
Alderson said LPTA opens the door for more competition.
"I'm spending a lot of time, and I'm seeing a lot of what's being done in industry, focusing
on the basis of estimates. So it's not just living off the backs of the people, which are
important because this is a people industry," she said. "You've gotta make sure you have
competitive RAC rates and salaries, but really have to take a hard look at how many
people does it really take to do this job."
Alderson said she was part of recent acquisition that shows the pressure and challenges
incumbents face.
"I was working with an organization, and it had a recompete coming up that had a run
rate of $20 million. The customer loved the company. They bid it at $10 [million], which I
think was pretty aggressive, and it was won at $5 [million by another company]. You are
like 'wow.' I would never have anticipated that. It was all done with a basis of estimate.
They felt they could do the job with fewer people, which I'm not sure and I would question
that."
The basis of estimate is a concept used by project managers, estimators and cost
analysts to calculate the total cost of a project.
The survey also found 57 percent of the contractors who responded are worried that
agencies are making decisions that are only based on price regardless of quality or ability
to perform, and 32 percent say they are unable or have less of an opportunity to provide
value-added solutions.
Low-price to remain popular
General Dynamics' Whitehead said these challenges are especially true when LPTA is
applied to professional services and IT services contracts.
"What we are seeing in a lot of RFPs we come across today the IT and professional
services that are being procured are really critical to the agency's mission. Do you want
to be buying those using an LPTA method that sacrifices or abandons any sort of shared
cost savings, innovations or technology refresh over the cost of the contract?" Whitehead
said. "If you look at some of these procurements, for example, cybersecurity, network
modernization or business process operations, these are mission critical services, and
agencies using an LPTA approach I think may be sacrificing a short term savings for
exactly that long term delivery that really the agency is going to depend on to perform its
mission. I think we have to be very careful."
Despite those concerns from industry, many of which have been very vocal in expressing
them to the government, 42 percent of the agency respondents say they will be using
more LPTA in the next three years. Additionally, 79 percent of the federal respondents
say they are very satisfied or somewhat satisfied with vendor performance under LPTA
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contracts, meaning they aren't seeing the impact vendors believe will happen or is
happening.
To deal with the expected use of LPTA, vendors say they will offer less innovative
technologies, reduce their indirect rates and will have a greater reliance on junior-
cheaper-staff.
Whitehead, Alderson and others also offered some recommendations for vendors to
survive in this acquisition environment, including staying close to your customer and
managing that relationship more aggressively and in different ways.
The experts also say vendors should consider removing the project manager and project
team from the recompete bid in order to get a fresh set of eyes on the program in order to
cut costs. They say contractors also should communicate with all parts of the company
and agency to understand their needs and define what is technically acceptable.
RELATED STORIES:
DoD acquisition managers told to think for themselves
Panel: Contractors adapting to post sequestration environment
Vendors confronted with a new type of waiting game
Page 4 of 4 Vendors see writing on the wall when it comes to low price acquisitions - F...
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LPTA Puts the Screws to Subcontractors
From Washington Technology | October 24, 3013
By Nick Wakeman, Editor-in-Chief
The prevalence of lowest price, technically acceptable contracting is hard enough on incumbents and prime contractors, but it is worse for
subcontractors.
That was one of the main takeaways I pulled from a panel discussion at an event on LPTA put on by Market Connections and Centurion
Research Solutions.
The two companies worked together on a research project and survey looking at the impact of LPTA from both the contractor and
government perspective. The survey results drove home the point that lowest price contracting is here to stay.
"It's the world we live in," said Lisa Dezzutti, president and CEO, of Market Connections.
The panel consisted of Deb Alderson, CEO of Sotera Defense Solutions, Michael Fischetti, executive director of the National Contract
Management Association, George Obertubbesing, vice president of business development for Harris IT Services, and Ray Whitehead, vice
president of business development and strategic planning, General Dynamics IT.
They voiced some familiar complaints about LPTA and government contracting in general, namely that the government is horrible at
writing requirements. And without good requirements, LPTA is a risky proposition.
As the primes adjust to LPTA bidding, most are looking for ways to move more of the work in-house instead of relying on subcontracts.
Even if you are a subcontractor on a team, the pressure continues after the award.
Alderson related the story of how Sotera was a sub on a winning team, and "then the prime decided to compete all the billets," she said.
So, for each task order that went out, Sotera and three other subcontractors would have to propose how they could support the task. The
prime said that if they can't respond in two days, they would do it themselves, she said.
"As a subcontractor you need to be more aggressive on the teaming and subcontracting agreements," she said.
"There is definitely more pressure on subs," Harris' Obertubbesing said. "The primes have to keep their growth engines funded."
GD's Whitehead said he is always trying to strike a balance between what to keep in-house and when to use subcontractors. The key, he
said, is working with trusted subcontractors. Whitehead talked about GD's recent small business awards ceremony. A common thread that
ran through the award winners was their ability to deliver great services at low prices.
"You need great talent, but you need to figure out how to deliver that at competitive prices," he said.
Alderson said that's she's always look for subcontractors with strong technical skills and strong relationships with the target customer.
"You need to become that must-have sub," she said.
Those comments really popped like a bright light for me because, here at Washington Technology, we are in the home stretch of finishing
our second Insider Report exploring the prime-subcontractor relationship. It should be out next week. The panelists' comments echoed
precisely what our research found. In part of the study, we asked prime contractors to rank the importance of attributes such as technical
expertise, teamwork, customer knowledge, industry perception and process.
We also asked them to rank the performance of the overall group of subcontractors and to rank their single best subcontractor. The
performance of the overall group consistently ranked below the value the primes placed on those attributes. But the single best
subcontractor performed better than the value the primes placed on the attributes.
To me, that reinforces the point the panelists were trying to make, and points toward an opportunity for subcontractors. If you want to
survive in the current market, you can be a preferred partner if you focus on those key attributes, particularly technical expertise,
teamwork and customer knowledge.
It doesn't mean that the market will be easier; it's a tough market and will continue to be.
As Harris' Obertubbesing said, "This market is a little mindboggling."
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Breaking Government
MANAGEMENT
Federal LPTA Contracts: Acceptable Is
The Antithesis Of Innovative
By MONI CA MAYK PARHAM
on November 06, 2012 at 12:30 PM
During this time of budget constraints, the federal government is seeking low-priced,
technically acceptable (LPTA) solutions to keep projects and innovation alive. In other words,
agencies need to find ways to keep technological innovation moving forward, albeit with
tighter purse strings.
As Lisa Mascolo, CEO of Optimos Inc., pointed out in her recent Washington Technology Op-
Ed article on the topic of LPTA contracts, When I hear acceptable, I think adequate, good
enough, not great but okay.
She raises some good points: Do these LPTA projects come at a cost? Is acceptable really
the antithesis of innovative, as she questions in her column?
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This doesnt have to be the case. In Market Connections 2012 Government Contractor
Study, which highlighted the best business development and marketing practices from a
national survey of government contractors, the report looked at ways those working in the
federal sector can achieve optimal results, even with the threat of sequestration and
increased use of LPTA guidelines for procurement of services.
The study pointed out that the rise of LPTA shows increases in the need for experienced
contracting officers to write adequate RFPs. Less-seasoned contracting officers may lack
skills and experience necessary to adequately write RFPs and evaluate responses.
Weve taken several approaches [to LPTA] and a lot of it depends on the customer, said
one government contractor we spoke with. With some, weve provided a compliant
proposal and then we have also provided unsolicited material that says, but if you
want a more innovative approach, we have an alternative here. Generally, we try to do
that before the RFP comes out. Its the nature of our business to have a good,
meaningful dialogue with the procuring agency/customer set, before the RFPs ever
released, so we can demonstrate some of our innovative ideas, approaches or solutions
in hopes of having them written in as a requirement in the RFP. Sometimes were
successful, sometimes less so.
Further, when survey respondents were asked what their companies are doing to position
for success in the federal market over the next three to five years, contractors most often
mentioned building relationships, more keenly focusing procurement efforts and improving
capture strategy.
One of the studys key takeaways was that more opportunities exist in areas that require
innovation, such as cybersecurity (45%), cloud computing (35%) and health IT (33%). With
cyber security being the new front line of our national security efforts, merely acceptable
solutions are clearly not up to a standard suitable to protect national intelligence, sensitive
data, infrastructure or borders.
For instance, in a recent New York Times article, Defense Secretary Leon E. Panetta stated
that, the United States was facing the possibility of a cyber-Pearl Harbor and was
increasingly vulnerable to foreign computer hackers who could dismantle the nations power
grid, transportation system, financial networks and government. Clearly, cyber threats are
front and center on the minds of our nations military leaders.
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Furthermore, the promise of the cloud and the benefits of IT reinforce the need for
innovative solutions to increase efficiency, save tax dollars and aid in meeting mission-critical
objectives.
But lets face reality for a moment. Is there no way of getting around the budget issue?
According to Mascolo, contractors should focus on developing, implementing and
maintaining smaller, smarter, faster, cheaper services and solutions, which will position
contractors to score well on price and high on innovation. The result is that government and
taxpayers both benefit from solutions that are low price and far beyond technically
acceptable.
In this new era of doing more with less, we all will be challenged with developing innovations
that meet government mission requirements within budget. The challenge for both
contractors and public servants: How can you apply innovation to overcome both technical
and operational challenges within a more austere government environment?
Monica Mayk Parham is director of marketing at Market Connections, Inc , a leading
government market research firm and authority on preferences, perceptions and trends
among government executives and the contractors who serve them. This article originally
appeared on the companys FedConnects.com site and is reprinted by permission.
Topics: acquisition, best practices, cloud computing, contracting, cybersecurity, government
contractors, health IT, Leon E. Panetta, Lisa Mascolo, LPTA, Market Connections, Monica Mayk Parham,
Optimos Inc, sequestration
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Simple criteria to follow
(lowest price) for award
Controls costs
Economical for product/
commodity procurements
Reduces likelihood
of a protest
Proposals easier/
less complex
Shortens the
procurement cycle
Contract is more straight-
forward/simple to fulfll
39%
46%
45%
59%
38%
43%
25%
19%
20%
14%
19%
19%
12%
24%
Contracts may be awarded
to less qualifed companies
Sacrifces long-term value
for short-term cost savings
Acts to lower the contractor's
standard of performance
Lessens a contractor's
ability to be innovative
Past performance is not
taken into consideration
Not practical for contracts
involving services
Not practical for product
development contracts
Increases likelihood
of a protest
Main Drawbacks of
LPTA for Government
Main Benefts of
LPTA for Government
59%
71%
65%
43%
20%
19%
10%
20%
43%
31%
43%
23%
22%
38%
3%
8%
Less innovative solutions
Reducing Indirect rates
Greater reliance on
junior staf
Staf reduction
Salary caps/freezes
63%
53%
47%
39%
33%
MARKET CONNECTIONS, INC. | WWW.MARKETCONNECTIONSINC.COM
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OPPORTUNITY
VALUE
$223.6 M
OPPORTUNITIES
RANGE FROM
$20 K
$50 B
AVERAGE
ANNUAL
VALUE
$38.8 M
AVERAGE
CONTRACT
LENGTH
4.1 Years
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O
N
A
B
LE OPPO
R
T
U
N
I
T
I
E
S

L
PTA

AVERAGE
OPPORTUNITY
VALUE
$70 M
OPPORTUNITIES
RANGE FROM
$40 K
$6 B
AVERAGE
ANNUAL
VALUE
$18 M
AVERAGE
CONTRACT
LENGTH
3.6 Years


B
E
S
T VA
L
U
E

LPTA vs. Best Value


scorc or iurnct
The New Reality: The Impact of
LPTA Procurements on Government
Contracts and Solutions
57%
Decisions based on price
regardless of potential quality
of work/ability to perform
Unable to diferentiate
against competition except
on price
49%
Compelled to ofer a lower price
solution that may not be in the
best interest of the government
32%
30%
27%
Difcult to budget senior
staf (who have more
expertise) on to the project
Less/no opportunity or
scope to provide value
added solutions
Generally less proftable
Main Drawbacks and Challenges for
Contractors Delivering under LPTA
49%
Contractors Top 5 Responses
to the LPTA Environment

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