Analysis of Contract Source Selection Strategy

Abstract

The Department of Defense (DOD) spends billions acquiring weapons systems, supplies, and services. The contract management process has to be executed diligently to ensure the government is receiving the highest return on investment. The process has six steps, two of which relate to the source selection strategy: solicitation planning and source selection. Once the acquisition team determines whether to use a lowest price technically acceptable (LPTA) or Tradeoff source selection strategy, they evaluate proposals to determine which offer presents the best value to the government. The purpose of this research is to explore potential relationships between the source selection strategy (LPTA or Tradeoff) and resultant contract outcomes. This research uses data collected from contract files and related documentation from two major systems commands (Naval Air Systems Command and Naval Sea Systems Command) to show the implication of the LPTA and Tradeoff source selection strategies. The findings suggest that an LPTA source selection strategy has a significantly shorter lead-time to contract award. The findings should be viewed with caution, however, as the sample size consisted of only six LPTA contracts. This report concludes with two recommendations to improve further research on choosing a source selection strategy and contract outcomes.