GAO Concludes It’s OK to Purchase “IT,” as Opposed to “IT Services,” Through LPTA Procurement; Coast to Coast Computer Products, Inc, GAO B-419833.2

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Protest alleging that solicitation improperly sought to make award on a lowest-price, technically acceptable (LPTA) basis is denied. The protester contended the DFARS sets forth criteria that must be satisfied before an agency can use an LPTA selection method, and in this case, those criteria had not been met. GAO, however, determined the criteria had been satisfied. The solicitation stated clearly defined minimum requirements, the goods being sought were expendable, and there was minimal value to be realized for an approach that exceeded the minimum requirements. Also, while the DFARS require agencies to avoid LPTA procurement for IT services, this solicitation sought IT products, not services.

The Air Force issued an RFQ to holders of the Federal Supply Schedule contract for information technology. The Air Force sought to establish blanket purchase agreements for a variety of information technology products. The RFQ provided that vendors would be considered for a BPA on a “low price fully qualified selection basis.”

Coast to Coast Computer Products, Inc. (CTC) filed a protest with GAO alleging that this was an LPTA procurement, and that the Air Force’s decision to use an LPTA source selection violated the DFARS. In response to the protest, the Air Force took corrective action to review the solicitation. Following the corrective action, the Air Force released a Determination and Findings document, which found that RFQ’s source selection was appropriate and did not violate the DFARS.

CTC field a second protest. CTC noted that DFARS 215.101-2-70 requires that DoD avoid using LPTA procurements in circumstances that would deny the agency the benefits of a tradeoff. That DFARS provision sets forth eight criteria all of which must satisfied before a DoD agency employs an LPTA procurement. CTC alleged that the Air Force had not satisfied several of these criteria.

First, one the DFARS criteria states that the minimum requirements can be described clearly and expressed in terms of objectives and standards. CTC claimed that the RFQ’s evaluation criteria incorporated open-ended things like IT services, supply chain risk management, and process considerations, so this criteria had not been satisfied.

GAO disagreed, reasoning that the solicitation clearly defined the minimum requirement. The RFQ estimated but did not guarantee an annual award value. It provided specific mandatory requirements for 19 product categories and estimated order cycles. While the agency was required to evaluate a vendor’s experience managing supply chains, this did not mean that the RFQ did not qualify for an LPTA procurement. The procurement was for the acquisition of items. The evaluation of the experience for the procurement related directly to the vendors’ ability to deliver the item, not necessarily to discretionary assessments of experience or past performance.

The DFARS criteria for LPTA procurements further provide that the agency find that no, or minimal, value will realized from a proposal that exceeds minimal performance requirements. CTC contended that that the Air Force had previously purchased IT equipment on a best-value basis, so clearly the agency had recognized that there was value to be realized in proposals that exceeded the minimum requirements.

The record, however showed that in those previous acquisitions, the companies that were determined to be the best value also had the lowest price. Based on this history, GAO had no basis to question that agency’s conclusion that no value would be realized from a quotations that exceeded the minimum requirements.

The DFARS LPTA criteria also require that the goods to be procured are predominantly expendable in nature and have a short shelf-life. CTC claimed that the products involved here—laptops, tablets, printers, and the like—have a shelf life beyond the four years identified by the Air Force in the RFQ. GAO, however, found that the record showed the Air Force anticipated savings could be achieved by employing a four-year refresh rate for the IT equipment. The four-year requirement was thus reasonable.

The DFARS LPTA criteria have a catch-all provision that instructs DoD agencies to avoid the use of LPTA criteria to maximum extent practicable when acquiring information technology services.  CTC noted that while this primarily a solicitation for IT products, it required a significant amount of IT services, so the agency should have stuck with a best-value procurement.

GAO found no support for this contention. The services in this case were incidental to the products. Indeed, without the products, the agency would have no used for the services. GAO believed the agency had reasonably found that was a procurement for IT products. The catchall LPTA criterion did not apply.

CTC is represented by Rick Vogel. The agency is represented by Lieutenant Colonel Christopher M. Wu, Lieutenant Colonel Keric D. Clanahan, Major David Gilkes, and Jeffrey S. Titrud of the Air Force. GAO attorneys Charmaine A. Stevenson and John T. Sorrenti participated in the preparation of the decision.

GAO - Coast to Coast Computer Products