How Low Can You Go: The Era of Lowest Price Technically Acceptable

JUNE 21 – 23, 2016 | San Diego, CA

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GOVERNMENTCONTRACT PRICINGSUMMIT 2016TOPIC: HOW LOW CAN YOU GO? THE ERA OF LOWEST PRICE TECHNICALLY ACCEPTABLE

SPEAKER: MARIA ASUELIMEN, MANAGING PARTNER, AMA CONSULTING


AMA Consulting CapabilitiesStrategic Marketing Planning

Small Business Certifications

Proposal Management

Support

Federal Contracting

Support

Entrepreneurship & Leadership

Development Trainings

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3How We Work Excellence,

Diligence, Integrity and Compassion

Outcomes Oriented

Agile Approach

Ease of Interaction

Networks


4Our Clients • 8(a)• WOSB• HUBZONE• SDVOSB• VOSB

Small Businesse

s• IT• Healthcare• Staffing• Construction• Professional Services• Security

Industries


Key Takeaways Simple winning strategies contractors can adopt to not be negatively impacted by LPTA’s.

Appropriate uses of LPTA source selection and benefits to agencies.

Effective communication strategies between industry and government around this topic.

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What is LPTA?

Source selection method: Lowest priced, technically acceptable FAR 15.101-2

Proposals evaluated for acceptability; Not ranked using cost/price factor

Past performance need not be an

evaluation factor

Undermines bid integrity, lowers

performance standards, and eliminates

improvement and innovation incentives.

Simplify award criteria, control

costs, and reduce protests

Evaluation factors establish

requirements for acceptability


LPTA General Impact

SOURCE: http://marketconnectionsinc.com/index.php/Reports/the-new-reality-the-lpta-impact-study.html

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The Avg. Length Of An LPTA Contract is 3.6 Years With An Avg. Annual Contract Value Of $18 M

CONTRACTORS GOVERNMENT71% AWARDED TO LESS QUALIFIED COMPANIES

59%AWARDED TO LESS QUALIFIED COMPANIES

59% BELIEVE IN INCREASE OF LPTA PROCUREMENTS IN NEXT 3 YRS

42% BELIEVE IN INCREASE OF LPTA PROCUREMENTS IN NEXT 3 YRS

43% BELIEVE LPTA LOWERS PERFORMANCE & INNOVATION

31% BELIEVE LPTA LOWERS PERFORMANCE & INNOVATION

65% LPTA SACRIFICES LONG TERM VALUE

43% LPTA SACRIFICES LONG TERM VALUE


Agencies Rationale for LPTA

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Budget Constraints

Simplified Award Criteria

Reduced protest


How To Best Use of LPTA 9

GOALNon-Performance Risk

Aversion and avoidance of mission

interruption

Clear definition of

“requirements for

acceptability”Well

Defined Scope

Limit use to commodities

Price Realism Analysis


LPTA Capture StrategyDoes the opportunity open up a new employee base that will assist in putting downward pressures on your indirect rate structures?

Does the opportunity strategically place or advance you within a high-growth customer?

Does the opportunity allow you to introduce yourself to a new customer?

Does the opportunity provide you the chance to bring new products or services to an existing customer?

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LPTA Tactics

Align with efficiently priced partners/subcontr

actors

Price for the base of

minimally acceptable

requirements

Analyze competitor

pricing

Identify/evaluate

key metrics to price the

contract

Implement cost efficient

business models

Align LPTA pursuits with

strategic goals

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LPTA Agency & Industry CommunicationState source

selection clearly in

RFP Solicit Industry

input from Industry in

determining soliciting source selection type

Use question period to

clarify scope

State assumptions in proposal

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LPTA Future

LPTA is here to stay

Secretary Kendall’s March 4,

2015 memo

Opposing industry

advocacy

Promoting Value Based Defense Procurement Act of 2016

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Thank You For Your Time

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How Low Can You Go: The Era of Lowest Price Technically Acceptable