Procurement

Why not 'functionally better' instead of 'technically acceptable'?

Dale Luddeke

As agencies deal with budget cuts, the government is missing an opportunity for innovation and leadership by establishing "lowest price, technically acceptable" as the default approach to the acquisition of IT assets.

The LPTA approach has its place and can work well for commoditized services with clearly defined, low-risk requirements — think facilities maintenance. But "technically acceptable" implies minimum performance expectations based on what we know has worked in the past and does little to keep up with new demands or evolving threats. In other words, LPTA encourages government and industry to settle for "good enough" just to hit a price point.

And when it comes to the acquisition of new technology solutions and services, the LPTA approach offers short-term savings at the expense of long-term mission effectiveness. It hurts the business of government because technically acceptable does not anticipate the needs and threats of tomorrow — or provide for the technology and systems to address them. As the fiscal pressures intensify, it is essential that we reach new levels of performance and efficiency for the short and long term alike.

The time is right to get more from our acquisition approach by changing from "lowest price, technically acceptable" to "lowest price, functionally better" (LPFB).

What is "functionally better"? It means improved or improving levels of performance at a comparatively lower cost across the enterprise. The exact definition will vary based on a specific organization's service or mission. But the acquisition of functionally better solutions and services provides the means to continually lower overall costs and hit higher levels of performance.

Government acquisitions that use an LPFB approach would challenge industry to offer solutions that exceed the performance requirements for "technically acceptable" and still come in at the lowest effective cost. Today's mantra is "do more with less," but in truth we can and must "do more with more."

With technology and complex services, "do more" is what you can accomplish with refined user access, improved search, enhanced visualization and other advanced capabilities.

LPTA encourages government and industry to settle for 'good enough' just to hit a price point. -- Dale Luddeke

"With more" is about leverage: opening up to existing capabilities and new, creative ways to deliver enhanced value in the more complex business and mission areas. It means more critical thinking about what we really need, more critical awareness about solutions already available in the marketplace, and more understanding of what new solutions and services can truly move us past the status quo.

The most effective acquisitions will result in clear options for solutions that iteratively improve and integrate, enabling end users to perform business and mission functions at a higher, optimized level. A government CIO might solicit for a distributed cloud solution to get, at a lower cost, the same functionality that new servers would provide.

With the LPTA approach, the CIO makes a decision based strictly on price. With LPFB, the CIO could select a cost-effective solution with creative ideas for more advanced data sharing and data analytics on secure mobile platforms. The overall cost of the distributed cloud solution might be more than the new servers alone, but the enhanced functionality across a broader user base effectively reduces costs in other areas.

The net return is more user productivity, more efficiency and better results. In short, the LPFB approach holds the promise of purchasing a better overall outcome.

The fiscal constraints that define our current operating environment are pressuring us to go lean and settle for what we know. I think the times demand breakout performance and higher levels of creativity. By moving to an LPFB approach in government acquisition, we would enable and inspire one another to advance toward the real opportunity of being and doing better.

Perhaps LPFB is just terminology, but I believe it's much more. It's an attitude and accountability for moving beyond acceptable to excellent, at the price we can afford.

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Reader comments

Wed, Jun 26, 2013

Idea: Suspend the Competition in Contracting Act (CICA) for all major IT systems over $100M. This isn't working.

Fri, May 31, 2013 Brad M. Montrose, NY

Another thing that I'd like to point out is that maybe the customer is using vendor quotes or the IGCE to realize the full cost of the requirement, and then scales down their technical requirements in order to meet their budget constraints. If that is the case, that's not an issue with the FAR and that is not LPTA.

Fri, May 31, 2013 Brad M. Montrose, NY

I agree with the naysayers. You cannot leave the technical requirements open-ended in a contract. That eventually changes the scope of the requirement and is subject to a Protest that will be sustained. As for the comment, "With the LPTA approach, the CIO makes a decision based strictly on price," I disagree completely. The technical requirements are identified before the solicitation and that is the minimum standard. It is the customer's responsibility to know what their requirement is and to be able to effectively communicate that to industry when soliciting. Dale Luddeke ultimately fails to realize that LPTA is part of the Best Value continuum.

Mon, May 13, 2013

See FAR 15.101-1 for the Tradeoff process already provided by regulation and used the Federal government to make evaluations for award. Dale Luddeke has not suggested anything new.

Thu, May 9, 2013 Marc Rader The Front Lines

The problem here is that the process is trying to quantify qualitative traits. In a real simple example -- I need to get my house painted. I need to hire a painter that will tape the windows, scrape pealing paint, caulk the cracks, and paint the house. Under this model, I have to take the lowest bidder who says he can do the work. However, the quality of work is not considered in the award. Past performance was considered previously and led to better quality. On top of this, the government is not always good at determining what is technically acceptable since they do not always know what a job entails and are often people with engineering degrees, expected to be accountants, lawyers and managers all at once and lead teams where they have no expertise. They become dependent on the contractor for the technical aspects of the job and then unscrupulous contractor turns around and tell them that they need more to do the job than they need. This is like the "no gas or service" for 100 miles mechanic who is also, the mayor and sheriff of his town and charges $800 for a $50 repair. The solution is back to the qualitative evaluation and use of past performance to determine who is going to do the best job, for the best price, and not just be acceptable.

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