When using the LPTA process,  DOD specifies its requirements in the solicitation. Tradeoffs among price and non-cost factors allow DOD to  accept other than the lowest priced proposal. DOD Predominately Used Best Value Processes in Fiscal Year 2013, but Increased Its Use of LPTA for Higher Dollar Contracts since Fiscal Year 2009

DOD predominately used best value processes—tradeoff and LPTA—to  evaluate offers from potential vendors in fiscal year 2013. For contracts with  obligations of $25 million or more, DOD used the tradeoff process for  approximately 58 percent of the contracts and the LPTA process for  approximately 36 percent of the contracts. As seen in the above figure, DOD used the tradeoff process most often in  our sample to acquire services, including those related to construction  projects, aircraft maintenance, and other support services, regardless of  obligation amount. For contracts with obligations of $25 million or more,  DOD used the LPTA process primarily to acquire commercial products  such as fuel. Several contracting and program officials said that their commands gave  more attention to whether LPTA is an alternative option in light of  declining budgets and Better Buying Power Initiatives. Knowledge of Requirements and Potential Vendors Underpin Decisions about Source Selection Process

Our review of contract documents and interviews with program and  contracting officials from our 16 case studies found that for these specific  acquisitions, DOD’s ability to clearly define its requirements and its  knowledge of potential vendors were the key factors that underpinned the  decisions about whether to use tradeoff or LPTA. For example, in the  eight case studies in which DOD used LPTA, DOD contracting and  program officials generally stated they had sufficient knowledge of the  requirements or vendors to feel confident that the lowest priced vendor,  after meeting technical acceptability requirements, could deliver the  product or service. In contrast, in our eight tradeoff case studies,  contracting and program officials were less certain about requirements,  were looking for innovative solutions, or wanted to use non-cost factors,  such as past performance, as a differentiator when selecting the vendor. We found that for these 16 case studies DOD’s reasons for choosing  LPTA or tradeoff were generally consistent with guidance in the FAR and  DOD’s source selection procedures. DOD Provides Online and Classroom Training on Source Selection Processes, but On-the-Job Training Considered Essential for Making Sound Source Selection Decisions

DOD, through courses offered by DAU and the military departments,  provides both classroom and online training related to source selection  processes to its acquisition personnel. Both DAU and military department  officials stressed, however, the importance of on-the-job training in  preparing personnel to make informed source selection determinations. Naval Facilities Engineering Command officials and contracting  officials from one of our case studies stated that the task of identifying  when requirements would better suit a particular source selection  process is learned through gaining experience from on-the-job  training. Concluding Observations

Best value processes continued to underlie the vast majority of DOD’s  new, competitively awarded contracts. DOD did not provide written  comments on this report but did provide technical comments, which we  incorporated as appropriate. We determined 1) the extent to which DOD used best value  processes in fiscal year 2013; (2) the factors DOD considers when  choosing a source selection process; and (3) training DOD provides to its  acquisition personnel on source selection processes. To determine the extent DOD used the best value processes in fiscal year  2013, we used data from the Federal Procurement Data System-Next  Generation (FPDS-NG) as of October 2013 to identify a population of  contracts based on the following criteria: (1) newly awarded by DOD in  fiscal year 2013, (2) competitively awarded, and (3) had obligations of  over $1 million in fiscal year 2013. more, we compared the percentage of contracts solicited using best value  processes to fiscal year 2009 data we reported in October 2010.prior report did not include contracts with lower obligations of less than  $25 million. Unless otherwise  noted, percentage estimates of contracts with obligations of $25 million or  more have 95 percent confidence intervals within +/- 8 percentage points  of the estimate itself.
Why GAO Did This Study

DOD obligated about $310 billion in fiscal year 2013 for products and services needed to support its mission. To competitively acquire what is needed, DOD may use best value processes—including tradeoff and LPTA—to evaluate vendors' proposals. When using the tradeoff process, DOD weighs the relative importance of price against non-cost factors. By contrast, DOD may use the LPTA process and award the contract based on lowest price once technical requirements are met.
Congress mandated GAO to review DOD's use of best value processes. GAO identified, among other things, (1) the extent to which DOD used best value processes in fiscal year 2013, (2) the factors DOD considers when choosing a source selection process, and (3) training DOD provides to its acquisition personnel on source selection processes.
GAO identified and reviewed solicitations for a projectable sample of 183 contracts out of 2,851 new, competitively awarded contracts that DOD awarded in fiscal year 2013 with obligations over $1 million. GAO also reviewed DOD and military departments' guidance regarding their use of the best value process. GAO selected 16 contracts for case studies based on military department, best value process used, and other factors. GAO reviewed contract documents and interviewed program and contracting officials for these case studies. GAO also reviewed DAU and military departments' training on source selection procedures.
DOD provided technical comments that GAO incorporated as appropriate.

What GAO Found

The Department of Defense (DOD) used two best value processes—tradeoff and lowest price technically acceptable (LPTA)—for approximately 93 percent of the 2,851 new, competitively awarded contracts awarded in fiscal year 2013 with obligations greater than $1 million. DOD used the tradeoff process most often in GAO's sample of contracts to acquire services, regardless of obligation value. For contracts with higher obligations, DOD used the LPTA process primarily to acquire commercial products, such as fuel. In contrast, for contracts in GAO's sample with lower obligations, DOD used the LPTA process to acquire both products and services. Several contracting and program officials said that their commands gave more attention to whether LPTA is an alternative option in light of declining budgets and efficiency initiatives. For contracts with obligations of $25 million or more, GAO found that DOD increased its use of LPTA since GAO last reported on this issue in October 2010 using fiscal year 2009 data. GAO's prior report did not include contracts with lower obligations.
Source: GAO analysis of DOD contract and solicitation documents. | GAO-14-584
a The 95 percent confidence intervals for estimates in this table are within +/- 8 percentage points of the estimates themselves.
DOD's ability to clearly define its requirements and its knowledge of potential vendors were key factors that underpinned decisions about whether to use tradeoff or LPTA in GAO's 16 case studies. In the eight case studies in which DOD used LPTA, contracting and program officials generally stated that they had sufficient knowledge of the requirements or vendors to feel confident that the lowest priced vendor, meeting DOD's technical requirements, could deliver the product or service. In contrast, in the eight tradeoff case studies, contracting and program officials were less certain about requirements, were looking for innovative solutions, or wanted to use non-cost factors to differentiate vendors. For example, the United States Army Corps of Engineers used technical non-cost factors to evaluate vendors' abilities to use robotics for explosives disposal. These factors are generally consistent with guidance in the Federal Acquisition Regulation and DOD's March 2011 source selection procedures.
DOD, through courses offered by the Defense Acquisition University (DAU) and the military departments, provides both classroom and online training related to source selection processes to its acquisition personnel. Both DAU and military department officials stressed, however, the importance of on-the-job training in preparing personnel to make informed source selection determinations. For example, Naval Facilities Engineering Command officials told GAO that determining when requirements are better suited for tradeoff or LPTA is learned through gaining experience from on-the-job training.