Georgia Tech Procurement Assistance Center

LPTA solicitations no longer acceptable? Reviewing DoD’s proposed changes to the DFARS

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In a proposed rule issued last month, the Department of Defense (DoD) seeks to incorporate into the Defense Federal Acquisition Regulations Supplement (DFARS) restrictions on the use of the lowest price technically acceptable (LPTA) source selection method from the National Defense Authorization Act (NDAA) for Fiscal Years 2017 and 2018.  This proposed rule makes clear that these NDAA-imposed restrictions are not going away any time soon, and that DoD contracting officers need to engage in a thorough and reasoned analysis before conducting an LPTA procurement.

Just as its name suggests, the LPTA source selection process prioritizes cost or price over technical capability — the agency will make award to the lowest-priced offeror that presents a technically acceptable proposal.  Typically, agencies use the LPTA process to procure straightforward goods and services such as routine maintenance work or office equipment.  In recent years, however, contractors have complained that agencies employ LPTA selection processes in inappropriate circumstances where qualitative differences really matter and technical superiority is worth a price premium.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2018/12/lowest-price-technically-acceptable-solicitations-no-longer-acceptable-reviewing-department-defenses-proposed-changes-dfars/

Building better mousetraps by adding value to technical proposals

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“Build a better mousetrap and the world will beat a path to your door” is the old saying, but the federal government seldom beats a path to the door of a contractor. Nevertheless, companies can win contracts by adding value to their proposals with technical discriminators.

Assuming a contractor is responsible, contract awards by federal agencies are generally determined by three sets of factors: price, past performance, and technical approach. Where contracts are awarded based on the government’s assessment of best value, distinctions among technical proposals are critical to determining the contract award. In best value acquisitions, technical discriminators, which serve to differentiate one proposal from another, are often what determine success or failure.

To increase the value of their technical proposals, contractors must make maximum use of technical discriminators. Yet, not all technical discriminators that could lend a competitive advantage to a proposal may be readily apparent. For that reason, it can be useful to look at best value assessments in other procurements. Many such evaluations are reviewed in bid protest decisions. These decisions frequently discuss the technical discriminators that agencies find significant.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=760726

Contractors charging more for construction as prices rise

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The prices contractors say they’ll charge for nonresidential construction has made the sharpest increase since 2009, when the Bureau of Labor Statistics began recording them.

In October, prices jumped 2 percent from the previous month and 5 percent from the previous year, marking both the largest monthly and yearly increase on record.

An analysis of federal data by the Associated General Contractors of America suggests that costs have increased even more quickly, rising 6.6 percent year over year.

Keep reading this article at: https://www.lmtonline.com/business/real-estate/article/Contractors-charging-more-for-construction-as-13384074.php

Appeals board: Contractor wasn’t exempt from state tax

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They say that two things in life are guaranteed – death and taxes – and status as a federal contractor may not exempt one from the latter, according to a recent Armed Services Board of Contract Appeals (ASBCA) decision.

In Presentation Products, Inc. dba Spinitar, ASBCA No. 61066 (2017), the ASBCA held the contractor was liable to pay a state tax, and the government had no duty to reimburse the contractor. The problem arose from the fact that the contractor did not incorporate state tax costs into its proposed price, despite being required to pay the taxes under the terms of the contract and applicable state law.

Under the terms of the firm fixed-price contract, Presentation Products Inc. (doing business as Spinitar) was to provide the Army with installation of a video conferencing system in Fort Shafter Flats, Hawaii. The solicitation included FAR 52.212-4 (Instructions to Offerors–Commercial Items), which provides, in paragraph (k): “Taxes. The contract price includes all applicable Federal, State, and local taxes and duties.”

Hawaii places a general excise tax (or GET) on businesses rather than a sales tax on customers, which is not automatically waived when the customer is the federal government. The GET is an excise tax imposed on the gross revenues of businesses “derived from the privilege of doing business in Hawaii.” Under Hawaii’s GET, businesses are not required to collect GET from their customers, but may pass it on to customers upon agreement by the customer.

Keep reading this article at: http://smallgovcon.com/claims-and-appeals/asbca-says-contractor-wasnt-exempt-from-state-tax/

Lawmakers aim to restrict use of lowest-price contracts

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A contractors group has welcomed a bipartisan House bill placed in the hopper last month aimed at curbing agency use of lowest price technically acceptable contracts.

The Promoting Value Based Procurement Act (H.R. 3019), introduced by Reps. Mark Meadows, R-N.C., and Don Beyer, D-Va., would amend the Federal Acquisition Regulation to require civilian agencies to align themselves with the Defense Department and stiffen their rationales for resorting to lowest price technically acceptable (LPTA) contracts, which have grown in use in recent years but are controversial.

“Price should not be the sole deciding factor when the federal government is purchasing complex, innovative information technology and engineering systems, where the least expensive option often may not lead to the best long-term value,” Beyer said in a statement to Government Executive. “We can help spur innovation by allowing contractors for certain high-tech procurements to compete on the strengths of their products, not the cost.”

Keep reading this article at: http://www.govexec.com/contracting/2017/07/lawmakers-aim-restrict-use-lowest-price-contracts/139306

How to approach best value RFPs and protest improper award decisions

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Government contractors responding to RFPs understand the need to read the fine print.

Mostly commonly, we discuss this topic in terms of pure proposal acceptability. Protest decisions from the Government Accountability Office GAO and Court of Federal Claims (COFC) make it abundantly clear that the burden falls on the contractor to follow directions and include all of the required information in all of the right places. It is for that reason (among others) that we always recommend having an outsider (be it a consultant, a lawyer, or even just another person from your company not involved in preparing the proposal) do a quality check before a proposal is submitted.

A more nuanced issue – but just as important – is understanding the RFP’s evaluation scheme. That is, not only what information must be submitted, but how that information will be weighed and measured by the Agency.

For example, in the past, we’ve looked at low-price technically acceptable (LPTA) RFPs. The basic idea on an LPTA procurement is that a contractor need only achieve a minimum passing score on its technical proposal – the Agency will not give bonus points for added bells and whistles. The much more important part of an LPTA proposal is price. Among those offerors found to be technically acceptable, the award goes to the offeror with the lowest submitted price. So, the focus on an LPTA proposal should be on getting lean (while maintaining technical acceptability) so that you can get as low as possible (or practical) on price.

Keep reading this article at: http://www.mondaq.com/unitedstates/x/563830/Government+Contracts+Procurement+PPP/How+To+Approach+Best+Value+RFPs+And+Protest+Improper+Award+Decisions

GSA answers vendors concerns about transactional data rule

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GSA Schedule ContractThe General Services Administration (GSA) is trying to bring some light to a new acquisition requirement that has industry on edge.

Under the transactional data reporting rule, GSA is accepting volunteers from the contracting community to take part in a one-to-two year pilot to submit sales information back to the agency in exchange for relief of the price reduction clause and the commercial sales disclosures — two requirements vendors have long haexted.

Kevin Youel Page, the deputy commissioner of the Federal Acquisition Service at GSA, said the agency is trying to be more transparent about the Transactional Data Reporting initiative and respond to industry concerns, including more than 60 questions from the Coalition for Government Procurement.

Keep reading this article at: http://federalnewsradio.com/acquisition-policy/2016/09/gsa-answers-vendors-concerns-transactional-data-rule/

A future where price is no longer a factor for many RFPs

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The General Services Administration first brought up the concept of having an “unpriced” schedule a year or so ago.

GSA logoThe idea is to evaluate vendors for their capabilities, past performance and overall skillsets, and not on their prices. And then let the price competition happen at the task order level.

This concept would be a huge change in the federal market where price has always been a factor in the evaluations of bids.

But the recent success of governmentwide multiple award contracts such as OASIS, and the acceptance of a similar approach for the recent $11.5 billion Human Capital and Training Solutions (HCaTS) procurement and the soon-to-be released solicitation for Alliant 2, there is a growing recognition that this may be the future of federal contracting for multiple award, indefinite delivery, indefinite quantity vehicles.

Keep reading this article at: http://federalnewsradio.com/reporters-notebook-jason-miller/2016/06/future-price-no-longer-factor-many-rfps/

Deloitte Consulting agrees to pay $11 million for alleged false claims on GSA contract

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GSA logoThe Department of Justice (DOJ) has announced that Deloitte Consulting LLP (Deloitte) has agreed to pay $11.38 million to resolve allegations under the False Claims Act that it submitted false claims under a General Services Administration (GSA) contract.  Deloitte is a nationwide consulting company headquartered in New York City.

In 2000, GSA awarded Deloitte a contract for the provision of information technology services.  The contract required Deloitte to reduce the prices it charged the government if it offered lower prices to specific commercial customers during the course of the contract.  GSA refers to this as “best customer” pricing, a requirement of GSA Schedule contracts.

The settlement resolves allegations that between 2006 and 2012, Deloitte failed to comply with the price reductions clause in its contract, resulting in government customers paying more for Deloitte’s services than comparable commercial customers.

Justice Dept. seal - CopyThis case was handled by the DOJ’s Civil Division’s Commercial Litigation Branch and the GSA Office of Inspector General.

The claims resolved by the settlement are allegations only; there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/deloitte-consulting-llp-agrees-pay-11-million-alleged-false-claims-related-general-services

As GSA’s FAS struggles to reinvent itself, contractors suffer

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The last year has been a tough one for the General Services Administration’s Multiple Award Schedules (MAS) program.  The Federal Acquisition Service (FAS) – the GSA agency charged with administering the MAS program – has struggled to re-invent itself and its contracting vehicles in order to ensure they both stay relevant in an increasingly competitive federal marketplace.  The byproduct of this struggle has been mostly negative for Schedule vendors.

GSA Schedule ContractIn an effort to demonstrate the value its contracts bring to federal customers, FAS has pursued an unrelenting crusade aimed at reducing prices at all costs.  It is no longer enough for a vendor to give the Government a great deal vis-à-vis its commercial customers (a determination historically made through a “vertical pricing” analysis).  Now vendors also must charge less than their competitors – a determination made through a “horizontal pricing” analysis.  While FAS contracting officers are supposed to consider factors that may explain a price differential as part of their price evaluation, in practice, COs pay little heed to such “trifles.”  The concept of value rarely enters into the equation any more.

Time and again, vendors are told to lower prices or remove products from their Schedule because another vendor offers the same product at a lower price.  So what that the other vendor offers no customer service, no phone support, no warranty, and is run by two guys out of a garage in Glenwood.  Price is king, and that’s all FAS seems to care about nowadays.  (We mean no disrespect to the good people of Glenwood by the way.  We just couldn’t resist the alliteration.)

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=417332

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