Analysis of Source Selection Methods and Performance Outcomes: Lowest Price Technically Acceptable Vs. Tradeoff in Air Force Acquisitions

Abstract

As part of procurement planning, government acquisition teams must select a method by which proposals will be evaluated. The two most common methodologies are lowest price technically acceptable (LPTA) and tradeoff. There is a commonly held anecdotal belief that an LPTA approach results in a shorter procurement administration lead time (PALT) but also tends to provide the government with an inferior product or level of service. Conversely, it is believed that a tradeoff approach will yield a better outcome but will also have a longer PALT and demand additional resources. The objective of this research is to analyze whether a relationship exists between source selection methods (LPTA or tradeoff) and the level of resulting contract performance outcomes. Performance outcomes include Contractor Performance Assessment Reporting System (CPARS) ratings, Earned Value Management (EVM) outcomes, and PALT. Multivariate and univariate analysis of covariance (MANCOVA and ANCOVA) techniques were used to determine if there are differences in resulting performance outcomes based on source selection methodology. Findings indicate that a tradeoff approach may result in more positive performance outcomes. There is also evidence that suggests that PALT is not significantly affected by the methodology.