Airbus Exec Calls for New Approach to Government Satcom Procurement
[Via Satellite 01-17-2014] Ed Spitler, president of Astrium Services Government (now part of the Airbus group) had one main point to get across at the Washington Space Business Roundtable: Lowest Price Technically Acceptable (LPTA) is a dangerously flawed procurement strategy for the United States military. LPTA has been the U.S. government’s method of evaluating contracts in order to make the most cost-effective decisions. This strategy has been the recipient of criticism for the oversights that arise from narrowing the decision making scope to such a limited level of detail. According to Spitler, this not only hurts the industry, but it puts U.S. warfighters at risk.
“Satcom is not a commodity, nor is it a one size fits all,” said Spitler. “It’s not in the best interest of the government to just look at costs … ‘technically acceptable’ means different things to different people; it’s not easy to clearly define. While the agency has the right to choose the lowest bid, it can’t be forced to … as a procurement strategy for most space-based assets.”
Based on LPTA, non-cost factors cannot be taken into consideration, except for saying whether a proposal is acceptable or not. This means things like manufacturing capability, management and past experience cannot play a vital role in procurement decisions. According to Spitler, it is the negligent attitude toward past experience that causes some of the most skewed evaluations.
“It’s not in the best interest of the government to just look at costs,” he explained. “Today, under LPTA, … past performance is not even a factor. They wont even see it if it’s not the lowest price. Procurement goes to the lowest-priced bidder irrespective of quality. To me, it’s a big risk to the government.”
One of the effects of LPTA is an increase in government contracts awarded to small businesses. This has made business difficult for large companies that have traditionally provided services to the government. When it comes to acquiring satellite capacity, Spitler said the MSS sector is where LPTA is felt most acutely.
“I understand that that is important too,” he said, referring to supporting small businesses, “but there is a better way to do this. The warfighter is still not able to get the innovation and service that they really deserve.”
Commenting on the risk posed to soldiers, Spitler mentioned that small businesses don’t always have the scale needed to carry missions through all of their challenges. This puts soldiers at risk, as they may not have the level of dependability that they have become accustomed to during missions. With cost as the only guiding factor, companies to not have room to think creatively about how to meet government demands. As a result, the cost-effective solution may not be the most effective solution.
“As an industry we are having to reassess how we are approaching government contracts, said Spitler. “In the world of satcom and milsatcom … it stifles innovation in resilience and agility. As an industry I think we have a responsibility to define ‘technically acceptable.’ It’s really up to us to reach out to these agencies.”