Section 813(a) of the National Defense Authorization Act created a policy against using lowest priced technically acceptable (LPTA) source selection process in circumstances that would deny the Department of Defense (DoD) the benefits of a cost and technical tradeoff.  Under the LPTA source selection process, award is made to the offeror who submits the lowest-price as long as the offeror’s bid, proposal, or quote is technically acceptable and does not deviate from the solicitation requirements.  Section 813(c) provides that the LPTA source selection criteria only should be used by DoD in limited circumstances and should not be used for, among other things, the acquisition of information technology services and cybersecurity services.  On September 26, 2019, DoD issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the restrictions on the use of the LPTA source selection process.

In a recent decision, the Government Accountability Office (GAO) held that a solicitation for information technology and cybersecurity services that provided for an evaluation of quotes on the basis of technical acceptability, past performance, and price was not the equivalent of an LPTA procurement.  Inserso Corp., B-417791, B-417791.3 (Nov. 4, 2019).  In that case, the solicitation stated that the Government would award a task order to the responsible offeror whose quote is responsive to the solicitation, technically acceptable and considered to be the best value based upon a price/past performance trade-off.  Past performance and price had equal weight and the solicitation cautioned that the Government could award to other than the lowest priced quote or the highest rated past performance offeror.  However, under the solicitation, only the quotes of the five lowest priced quotes would be evaluated for technical acceptability.

The protester argued that the agency violated Section 813(c) and was using LPTA source selection criteria because the solicitation failed to provide for a tradeoff between price and technical factors.

The agency argued that the solicitation did not violate Section 813(c) because it did not utilize LPTA criteria.  It argued that FAR 15.101-2, Lowest Price Technically Acceptable Source Selection Process, should be used to define LPTA criteria.  Under FAR 15.101-2, the LPTA source selection process involves: (1) award to the offer with the lowest evaluated price that meets or exceeds the acceptability standard; (2) no comparative assessment of past performance when past performance is used as an evaluation factor; and (3) no tradeoffs.  According to the agency, it will not be using LPTA to make its award determination because it will perform a best-value tradeoff between price and past performance.

The protester, on the other hand, argued that Section 813 makes a distinction between the LPTA source selection process and LPTA source selection criteria.  The protester asserted that Congress in Section 813(c) meant to prohibit the use of LPTA source selection criteria, which it contended is different than the LPTA source selection process described in FAR 15.101-2.  In other words, under the protester’s interpretation of Section 813(c), in information technology procurements, the agency has to affirmatively use a tradeoff between price and technical factors as the basis for award and must make a qualitative technical evaluation and tradeoff with price.  Since the solicitation provided for ranking offerors by price and evaluating the five lowest-priced offerors for technical acceptability only, the protester argued that LPTA criteria were being used.

GAO concluded that the agency was not violating Section 813(c).  GAO stated the well-established legal proposition that an agency’s interpretation of a statute must be reasonable and based on a permissible construction of the statute.  The agency’s construction, however, need not be the only construction that the agency permissibly could have adopted.  Here, GAO concluded that both parties’ interpretation was reasonable.  Since the agency’s interpretation of Section 813(c) was reasonable, the agency’s source selection criteria and evaluation scheme did not violate Section 813(c).  Thus, a qualitative technical evaluation and tradeoff is not required.