On December 4, 2018, DOD issued a proposed rule amending the DFARS to impose limits on the use of the lowest price technically acceptable (“LPTA”) source selection process. These changes are driven by the National Defense Authorization Acts (“NDAA”) for Fiscal Years 2017 and 2018. Notably, the 2018 NDAA directed similar changes to the FAR, but there is no proposed change to the FAR yet.

DOD proposes adding a new DFARS section, 215.101-2-70, to address the limitations and prohibitions on the use of the LPTA source selection process. The new DFARS section includes the following limitations on the use of LPTA, such that it may only be used when all of the following factors are met:

  • Minimum requirements can be described clearly and comprehensively and expressed in terms of performance objectives, measures, and standards that will be used to determine the acceptability of offers;
  • No, or minimal, value will be realized from a proposal that exceeds the minimum technical or performance requirements;
  • The proposed technical approaches 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 source selection authority 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;
  • No, or minimal, additional innovation or future technological advantage will be realized by using a different source selection process;
  • Goods to be procured are predominantly expendable in nature, are nontechnical, or have a short life expectancy or short shelf life;
  • The contract file contains a determination that the lowest price reflects full life-cycle costs (as defined at FAR 7.101) of the product(s) or service(s) being acquired; and
  • The contracting officer documents the contract file describing the circumstances justifying the use of the LPTA source selection process.

Further, the new DFARS section provides that contracting officers shall avoid, to the maximum extent practicable, using LPTA in the case of a procurement that is predominately for the acquisition of:

  • Information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, or other knowledge-based professional services;
  • Items designated by the requiring activity as personal protective equipment (except that if the level of quality or failure of the equipment could result in combat casualties, then the requiring activity is prohibited from using LPTA); or
  • Services designated by the requiring activity as knowledge-based training or logistics services in contingency operations or other operations outside the United States, including in Afghanistan or Iraq.
Lastly, LPTA will be prohibited in the following circumstances:
  • To procure items designated by the requiring activity as personal protective equipment or an aviation critical safety item, when the requiring activity advises the contracting officer that the level of quality or failure of the equipment or item could result in combat casualties;
  • To acquire engineering and manufacturing development for a major defense acquisition program for which budgetary authority is requested beginning in fiscal year 2019; or
  • For an auditing contract (in which case award decisions shall be based on best value factors and criteria).

Comments to the proposed rule are due February 4, 2019, so contractors should anticipate this change to the DFARS soon thereafter.

About the Author: Megan Connor, a partner with PilieroMazza, focuses her practice in the areas of government contracts, Small Business Administration programs, business and corporate law, and litigation. She may be reached at [email protected].