If you are doing any kind of business with the United States Government, you have likely seen the acronym LPTA, which stands for Low Price Technically Acceptable. What does LPTA mean to you as a government supplier and how might it present you with challenges? Tweet This
The term applies to services or contracts that require the submission of a technical proposal. LPTA means that the Government is going to find the lowest bid, look at the technical proposal and if it’s acceptable, it will award the contract to that vendor. The Federal Acquisition Regulation states LPTA is appropriate only when the government “expects” it can achieve the best value from selecting the proposal that is technically acceptable and offers the lowest evaluated price.
While this seems to cut down the work for the contracts and technical folks on the government’s end and appears to make awarding contracts faster and easier, what can happen in the long run could be poor service, hired personnel with little experience, and positions that are hard to fill, leaving the work piled up on fewer people. With all those factors compounded, the contract could ultimately end in termination for failure of the contractor to perform.
The government at one point moved away from LPTA and focused primarily on “best value” procurements. Best value procurement is a procurement system that looks at factors other than price, such as quality and expertise, when selecting vendors or contractors. In a best value system, a contractor or vendor is selected through a process that involves researching the vendors or contractors before a detailed project plan is made. In other words, this method can allow for an award to companies other than the low bidder, if its total proposal is found to be more effective and the company found to have better capabilities than the low bidder. More recently there has been a return to LPTA in some instances, although best value is still used.
How can a small business succeed in a LPTA situation? Here are 3 suggestions to help get your foot in the door:
- Bid on smaller jobs and establish your company as a government resource. Not all bids will be LPTA type of bids and bidding on smaller jobs that are under the simplified acquisition threshold may be a way to get your foot in the door to prove that your company can do that work. That way when a “best value” bid shows up, you will have the ability to compete with past performance.
- Connect with prime government contractors to become a subcontractor on their prime contracts and bids. Many contractors who are now prime were once subcontractors on other contracts. You have to build the know, like and trust factor and depending on what your product or service is, you could end up with a prime contract based off your established work as a subcontractor.
- Show up and connect with the primes and government representatives at conferences set up to enhance government business. There is a large pool out there of contractors looking for work, how will you be able to stand out from the herd of other contractors? Showing up, connecting with people and building relationships can go a lot farther to help you gain a contract than you might think. It took me 3 years of showing up at events where a certain government agency was that I wanted a contract with before they considered my company for upcoming contracts where they had the option to choose contractors based on expertise in training, as well as business status (small business, veteran-owned business, woman-owned business etc).
While the LPTA process seems to be set up to shut the door on small businesses, there are ways to navigate what appears to be a closed-door situation. It all comes down to showing up, connecting and building trust. If you can make your company the go-to for a certain supply or service, you can build on your reputation and be ready to step up to the plate and respond to government needs when the opportunity arises.
Photo Credit: @Keagraphics, Twenty20