Is a 2-phase LPTA solicitation prohibited?
What are my risks of issuing a 2-phase solicitation beside the potential to delay contract award?
As you correctly reference, FAR 15.101-2 is one of two processes identified under the “Best Value Continuum” (FAR 15.101).
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Unless your agency supplements or local policies expressly prohibit your proposed two-phase approach, your intentions appear to be consistent with FAR 1.102 – “Statement of Guiding Principles for the Federal Acquisition System”.
That said, you may want to communicate your proposed approach with potential offerors, via a pre-solicitation conference or similar means, to discover if this approach exceeds the perceived benefit to the point of diminishing returns (e.g., Duplicative work or loss of momentum due to the additional elapsed time between the phases). Additionally, keep in mind that if “It is not necessary to conduct discussions… [FAR 6.401(a)], then FAR mandates the use of Sealed Bidding; Two-Step Sealed Bidding (FAR 14.5) may also be appropriate if discussions are required, and all other criteria are met.
You might also consider the recent caution against “overemphasis on price in awarding contracts” by a Congressional House Panel:
“The House Armed Services Committee chairman's mark of the fiscal year 2014 defense authorization bill said awarding a contract based primarily on price is appropriate with well-defined requirements and low performance risk. But a "best-value tradeoff approach" to contracting may be more appropriate in the face of complex requirements and high performance risk, or when failure to perform has "significant consequences," such as the development of emerging or critical technology…
[Additionally,] The Better Buying Power 2.0 directive, released by DOD acquisition chief Frank Kendall in April, called for using LPTA only when it is possible to "clearly define technical acceptability." Kendall mandated that requests for proposals and source-selection plans clearly lay out the minimum requirements determining acceptability when LPTA is used, noting that "well-defined standards of performance and quality of services" should support the use of this contracting strategy.
"LPTA should be used in situations where the department would not realize any value from a proposal exceeding its minimum technical or performance requirements," Kendall wrote. "When standards of performance and quality are subjective, another approach should be used." (InsideDefense.com: June 5, 2013).”
Ultimately, we highly recommend you consult the Department of Defense Source Selection Procedures, Appendix A. Additionally, all approaches/decisions should be coordinated between the Contracting Officer, Legal Counsel, and Source Selection Authority.
FAR 1.102 -- Statement of Guiding Principles for the Federal Acquisition System [excerpts]:
(a) The vision for the Federal Acquisition System is to deliver on a timely basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy objectives. Participants in the acquisition process should work together as a team and should be empowered to make decisions within their area of responsibility.
(b)… (2) The Federal Acquisition System will… Minimize administrative operating costs;
…(d) The role of each member of the Acquisition Team is to exercise personal initiative and sound business judgment in providing the best value product or service to meet the customer’s needs. In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.
FAR 15.101-2 Lowest price technically acceptable source selection process, (a)
1) The evaluation factors and significant subfactors that establish the requirements of acceptability shall be set forth in the solicitation. Solicitations shall specify that award will be made on the basis of the lowest evaluated price of proposals meeting or exceeding the acceptability standards for non-cost factors. If the contracting officer documents the file pursuant to 15.304(c)(3)(iii), past performance need not be an evaluation factor in lowest price technically acceptable source selections. If the contracting officer elects to consider past performance as an evaluation factor, it shall be evaluated in accordance with 15.305. However, the comparative assessment in 15.305(a)(2)(i) does not apply. If the contracting officer determines that a small business' past performance is not acceptable, the matter shall be referred to the Small Business Administration for a Certificate of Competency determination, in accordance with the procedures contained in subpart 19.6 and 15 U.S.C. 637(b)(7)).
(2) Tradeoffs are not permitted.
(3) Proposals are evaluated for acceptability but not ranked using the non-cost/price factors.
SAMPLE LANGUAGE FROM ACTUAL SOLICITATION (Army TACOM):
M.4.2.1 Proposals will be evaluated using a Two-phase Evaluation Process. This will be a Low Price Technically Acceptable (LPTA) source selection process in accordance with (IAW) FAR 15.101-2, as follows.
(1) Phase I of this LPTA evaluation is an assessment of Technical Factor proposals on an Acceptable/Unacceptable basis. In order to be considered for award, Offeror's proposals must be rated Acceptable under each Technical
requirement addressed in the Technical Information Questionnaire (TIQ) Sections C-E, as supported by the substantiation documentation specified in TIQ Section B. Any Offeror's proposal assessed as Unaccetable under any of the requirements cited in TIQ Sections C-E will be ineligible for award. Offerors whose Technical proposals are rated Unaccetable may be notified at any time that the proposal will no longer be considered for award.
(2) Under Phase II of the LPTA evaluation, proposals will be evaluated for the total lowest evaluated price which will include an assessment of price reasonableness. Award will be made to the proposal with the lowest total evaluated price which was also rated Acceptable under the Phase I TechnicalFactor.