According to Deltek Report, Use of Lowest Price Technically Acceptable (LPTA) Evaluations Are Declining Overall, But Increasing in Services and IT Contracting
New Deltek GovWin IQ report shows services and information technology as significant targets for LPTA procurements
HERNDON, Va. – September 18, 2015 – According to a new report from Deltek, federal agencies are utilizing the Lowest Price Technically Acceptable (LPTA) evaluation method less overall, but the proportion of LPTA procurements for services and IT is growing. Deltek’s analysis of a large sampling of FedBizOpps (FBO) announcements and IT task order awards shows that the overall use of the LPTA bid evaluation methodology declined from 7,540 procurements in FY 2012 to 5,740 procurements in FY 2014 – a decline of 24%. However, LPTA in the use of services procurements increased from 29% to 32% of the procurement activity over the same time period. IT products and services top the list of buying categories, representing an average of 18% of all LPTA procurements from FY 2009 to FY 2014.
Deltek’s new GovWin IQ report “The Lowest Price Technically Acceptable (LPTA) Procurement Landscape” outlines trends in agency use of LPTA, discusses the risks and issues associated with improper use of LPTA, and provides LPTA “use profiles” for agencies in the Department of Defense as well as the top 10 civilian agencies.
The report provides analysis of FBO Presolicitation, Combined Synopsis/Solicitation and Award announcements and IT task order award notices from the GovWin IQ task order database that indicated LPTA as the proposal evaluation method.
Key findings from the report include:
- Most agencies do not have formal guidance for ensuring appropriate use of LPTA, leaving much to the discretion of contracting officers under pressure to reduce costs.
- Although the Department of Defense (DOD) represents the majority of LPTA-related procurements discovered, growth of LPTA use has been faster within civilian agencies (24% and 55% respectively). For IT, the number of LPTA procurements grew only 19% for DOD compared to 222% for civilian agencies.
- Deltek analysts conclude that the combination of agency budget pressures, standardization of technology, and growing shortage of seasoned acquisition professionals is driving the use of LPTA.
- With the proliferation of services contracting in combination with continued budget pressure, contractors should expect LPTA will continue to be used as a cost saving measure.
“The large sample size indicates that contractor concerns about the expanded use of LPTA is real, in particular for professional services and IT contractors,” said Deniece Peterson, Director of Deltek’s Federal Industry Analysis program.
For more information on GovWin IQ and this report, visit the “The Lowest Price Technically Acceptable (LPTA) Procurement Landscape” page on Deltek.com/GovWin. The report is free to subscribers of GovWin’s Federal Industry Analysis program. Press interviews can be arranged by contacting Lauran Cacciatori.
About GovWin IQ
Deltek’s GovWin IQ provides the market intelligence tools and analysis government contractors need to gain a competitive advantage and be a formidable player in the federal market. Backed by a team of government research and analysis experts, GovWin IQ provides the most powerful, comprehensive, and timely lead generation and business intelligence solutions available. More than $2.1 trillion in opportunities are tracked every year – a number no other competitor can match. www.deltek.com/govwin
Deltek is the leading global provider of enterprise software and information solutions for government contractors, professional services firms and other project- and people-based businesses. For decades, we have delivered actionable insight that empowers our customers to unlock their business potential. 20,000 organizations and millions of users in over 80 countries around the world rely on Deltek to research and identify opportunities, win new business, recruit and develop talent, optimize resources, streamline operations and deliver more profitable projects. Deltek – Know more. Do more.® www.deltek.com
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