New FAR Rule Limits Use of LPTA Source Selection
Last month, the Department of Defense ("DoD"), General Services Administration ("GSA"), and National Aeronautics and Space Administration ("NASA") issued a final rule to implement a portion of the 2019 National Defense Authorization Act that limits civilian agency use of the lowest price technically acceptable ("LPTA") source selection criteria in solicitations. Notably, the new Federal Acquisition Regulation ("FAR") rule follows a similar DoD rule from 2019 (previously discussed here) that restricted the use of LPTA source selection in DoD procurements. [1]
As shown below, the new FAR rule significantly limits the use of LPTA source selection procedures to procurements where contracting officers can demonstrate that they meet certain enumerated criteria. [2] Moreover, the new rule also provides that agencies "shall avoid to the maximum extent practicable" LPTA in complex procurements (e.g., IT, cybersecurity, systems engineering, and health care services, etc.).
Effective Date: February 16, 2021
FAR 15.101-2
Under FAR 15.101-2(c), except for DoD, LPTA source selection procedures "shall only be used when":
The agency can comprehensively and clearly describe the minimum requirements in terms of performance objectives, measures, and standards that will be used to determine the acceptability of offers;
The agency would realize no, or minimal, value from a proposal that exceeds the minimum technical or performance requirements;
The agency believes the technical proposals will require no, or minimal, subjective judgment by the source selection authority as to the desirability of one offeror's proposal versus a competing proposal;
The agency has a high degree of confidence that reviewing the technical proposals of all offerors would not result in the identification of characteristics that could provide value or benefit to the agency;
The agency determined that the lowest price reflects the total cost, including operation and support, of the product(s) or service(s) being acquired; and
The contracting officer documents the contract file describing the circumstances that justify the use of the lowest price technically acceptable source selection process.
Moreover, in addition to the above requirements, FAR 15.101-2(d) also provides that "contracting officers shall avoid, to the maximum extent practicable" the use of LPTA source selection procedures where a procurement is predominantly for the acquisition of:
Information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, audit or audit readiness services, health care services and records, telecommunications devices and services, or other knowledge-based professional services;
Personal protective equipment; or
Knowledge-based training or logistics services in contingency operations or other operations outside the United States, including in Afghanistan or Iraq.
Takeaway
Contracting officers must now meet a high bar to justify using LPTA source selection procedures. [3] Indeed, the bar is even higher for acquisitions of various knowledge-based services, such as IT, cyber, health care, and systems engineering. Thus, as a result of these additional requirements, there may be an uptick in bid protests challenging the use of LPTA source selection procedures in solicitations (pre-award) or challenging an agency's best value tradeoff evaluation that improperly relies upon LPTA methodology (post-award).
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[1] See DFARS 215.101-2-70. Notably, the FAR LPTA rule and the DFARS LPTA rule are similar but not identical. For example, beyond the different conditions that DoD must meet to justify using LPTA source selection procedures, the DFARS rule also prohibits DoD from using LPTA in certain circumstances.
[2] Interestingly, one commenter expressed concern that, "the rule is not being applied to the GSA Federal Supply Schedules (FSS) Program and recommends aligning the Program with the rule to avoid inconsistent application and use of LTPA source selection criteria across the Federal and contractor communities when placing orders under FSS contracts." In response, the FAR Council noted that, "GSA will separately address, outside of this rule, the applicability of section 880 to the GSA FSS Program."
[3] The new FAR rule also amends several other FAR provisions – under FAR Parts 12, 13, 16, and 37 – to ensure the new LPTA limitations apply to other types of acquisitions.
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