Lowest Price Technically Acceptable (LPTA) is a criterion used to select a solution provider from a list of competitors in a federally governed proposal competition.
Competitors that are graded “technically acceptable” (i.e., their proposal meets the capability requirements defined in the Request for Proposal [RFP]) make it to the final round. Between these finalists, price alone dictates which proposal wins. Using LPTA as the criterion for a proposal proclaims that the RFP issuer sees no benefit from an offeror exceeding the requirements stated in the RFP.
Excluding simple deliverables, LPTA is not a wise strategy for selecting most proposals. Devaluing quality and experience raises risk levels. Unfortunately, our country’s current fiscal situation is increasing the number of RFPs reliant on LPTA to determine the winner. Working within the limitations of LPTA is the only option if you want to bid on the growing number of LPTA RFPs.
So, what can you do to increase your chances of winning LPTA RFPs?
Of course, pricing is key. You need a “price-to-win” strategy executed by an experienced professional who understands the client. The pricing specialist will build a price that can win based on current costs, past experience, the customer’s proposal award history, and other variables. But price-to-win is not the best strategy to win an LPTA proposal. There is no other interpretation of “lowest price.” If a “technically acceptable” proposal from your competition is one dollar less than your price, then their proposal must win. Additionally, if a proposal is priced too low, there is an increased risk of being found not technically acceptable or the offeror may lose money on the contract. For this reason, price should not be the main focus.
LPTA was not intended for bids needing complex solutions yet some LPTA bids are far from simple. For a complex bid, it is impossible for the RFP to define every element that makes a solution “technically acceptable.” There is room for interpretation. By focusing on the parameters of the “technically acceptable” (TA) portion of LPTA, you increase your chances of success.
Human evaluators are not robots. Quality will always be considered even in an LPTA environment. In an LPTA proposal, credibility becomes the qualitative and quantitative differentiator. Your goal is to win with proof points within the constructs of the LPTA evaluation system by answering the question: Why choose you and not your competition?
The secret to winning with TA is proof—proof that you can deliver at the price quoted and that a lower-priced solution introduces too much risk and, therefore, is not technically acceptable. Use this strategy to rise above competitors and prove your price is the best.
When proving that your solution is the right choice at the right price, follow these two steps:
- Prove that you will deliver the solution on the timeline at the price quoted.
- Prove that a lower priced solution is too risky. (Note: do not use this step if your proposal will not be compared with other proposals.)
1) Prove You Will Deliver at the Price Quoted Here are three methods to prove that you will deliver the product or service on schedule and on budget.
A. Comparison Through direct comparison, show how you will execute your solution at the quoted price. For example, in a traditional staffing scenario there may be eight steps. By comparison, your staffing approach has four and delivers the staff required in the RFP. Explain (prove) how you will cut four steps to lower the price without impacting the outcome.
B. Past Performance Technically, past performance is not needed in an LPTA bid because the Federal Acquisition Regulation (FAR) states that “unknown” past performance shall be considered “acceptable.” However, use past performance to illustrate proof of concept. If you say you can meet the requirements of the deliverable at a lower price point, then prove the assertion or risk of being found not technically acceptable.
C. Quantitative Show data gathered during testing or past reviews to validate your solution. Numbers have teeth when establishing credibility because that which is measured typically improves and is repeatable. Qualify your data with research notations when applicable.
2) Prove That a Lower Priced Solution Is Too Risky Low price is often associated with high risk, because low price is synonymous with lower quality, increased likelihood of failure, lost efficiency, and a spectrum of negative outcomes. Highlight these risks then point out critical elements found in your solution that mitigate these risks. If these features are missing or executed poorly, the proposal should be deemed not technically acceptable. (Think of these elements as critical success factors.)
The buyer is risk-averse. They do not want to buy a low-priced solution that doesn’t work. Throughout your proposal, remind the evaluator of the dangers associated with a bad-buying decision. Empower them to eliminate questionable solution providers (your competitors) by highlighting elements required to render the (best) service at a low price. For example, in the graphic below, the checkmark symbol is defined as “Required to be Technically Acceptable.” It is pointing out the features needed to ensure a successful execution at that price. Without these highlighted features, the risk of failure increases. This approach is subtle. You can be more explicit when acceptable.
The two steps and the methods come together in the following graphic. (Use graphics to make it easy for evaluators to find, understand, remember, and grade information that is crucial to your proposal’s success.)
– Mike Parkinson, GetMyGraphics[/vc_column_text][/vc_column][/vc_row]]]