Recently the lowest price technically acceptable (LPTA) clause has come under fire from all corners. Critics argue that the LPTA clause kills design, cripples innovation, and ultimately undermines the very institutions that are green-lighting LPTA projects. Despite the criticism, LPTA persists because so many project managers have their eyes on the bottom line, even if it’s to the detriment of design. Dive into the controversy surrounding the LPTA clause and its implications for engineering and design going forward to learn when (and how) LPTA works and when it can be a handicap.
Putting LPTA in Context
Before LPTA came along, most building owners used to use Best Value to compare project bids. Best Value gave building owners additional leeway to look beyond a simple cost comparison and take quality into account. Under the old system, a building owner could award a bid to a higher-priced contractor if that project delivered greater value above and beyond the price differential.
LPTA is easy enough to understand. It’s bottom-line mathematics, where the lowest cost, technically acceptable project has the inside track. This encourages contractors to skimp on design and innovation, cutting out any sort of "fat" in the project in an effort to achieve the lowest costs for the project. This sort of evaluation makes sense when cost-cutting is critical, as it was and has been during the Great Recession. However, does it do anyone any favors in the long run? Critics say no.
LPTA Critics: So Long, Innovation
It’s easy to make cost the basis of judgment for mass-produced items that are of the same quality. After all, no one wants to overpay for office supplies. Unfortunately, the trades industry makes use of supplies and materials that can widely differ in quality. By relying on cost only, LPTA opens the door to subpar materials usage and the utilization of contractors who do not fully comprehend how to use project materials.
Buildings constructed with poor-quality materials will not stand the test of time, and will require costly maintenance as construction flaws come to light. LPTA encourages reputable building designers to skimp on either the quality of materials or the quality of the design in an effort to come in with a competitive cost - and encourages small firms who may not have the manpower to deliver projects on time or on budget. None of these are good outcomes.
LPTA also ignores innovation by rewarding service providers that think small and penalizing those that have a vision for any project, including construction projects. When service providers are discouraged from dreaming big, or getting creative, they must dumb down their ideas to compete. Is this really what we want from Army and Navy service contractors?
Under LPTA, all a project manager has to do is identify the cheapest proposal and then evaluate its technical acceptability. If the lowest priced proposal is deemed "technically acceptable," the building owner might not even read the other proposals - and might never learn about interesting and innovative ideas he or she would like.
For defense projects, the lowest cost project might not fully provide for the public safety in a way that a higher-priced bid would do. When project managers can make decisions based on additional criteria, including public safety and issues of emergency preparedness and national security, they have the agency to choose the best fit and best value project.
Innovation isn’t only what makes a project unique, it can deliver an unbeatable combination of practicality and good vision. Projects that cost more in the short term but incorporate environmental design principles that save costs going forward can be more cost-effective than cheaper bids that satisfy LPTA. Yet these innovative bids might never even be read in the current landscape.
LPTA also encourages bid makers to be lazy, since they do not need to explain the details of how they will satisfy complication building requirements. They only need to paint broad brush strokes. This paves the way for businesses to get in over their head by either not understanding how to satisfy the requirements, or not allowing enough room in the budget for needed items to do so.
In response to these criticisms, the Department of Defense recently made changes to the implementation of LPTA. Under the Better Buying Power 2.0 initiative, the DoD mandated that "technical acceptability" must be more clearly defined so that the lowest-priced bid is not automatically awarded in cases where the bid fails to adequately consider safety, and in cases where innovation makes a difference. This realigns the idea of LPTA more with the Best Value rule on the past, where decision-makers have the ability to use their own discretion in making key decisions.
When LPTA Works - For All Parties
LPTA was originally designed to be used for relatively simple project with a "clearly definable" requirement and low levels of risk. When used as originally intended, LPTA can still be a good way to make decisions and can still deliver the best value for all involved.
When there’s no additional value to be realized from exceeding project requirements, then it makes sense to use LPTA. For example, a building owner tasked with evaluating a straightforward project like a retail shopping plaza could use LPTA when choosing to award a bid because there’s no real advantage to be had in innovating this type of space.
The backlash against rigid adherence to LPTA is helpful to broaden the landscape going forward. LPTA certainly had its place, and does have value as a decision-making tool, but it is not ultimately the way to make the best decisions across the board. The questions becomes, what is the best way to ensure a balance of innovation and affordability so that all needs are met?
