Tag: LPTA

No, price is not the only factor in evaluating Reverse Auction responses.

Reverse auctions are known for providing buyers with lower prices. A misconception of reverse auctions can be that the lowest price vendor receives the award. Price is just one factor in any evaluation, and the same is true when a reverse auction is used. Automating price negotiation allows buyers to negotiate more buys than otherwise and allows them more time for key procurement decisions, such as the award evaluation. 

Lowest Price Technically Acceptable (LPTA) procurements began to gain popularity in 2007 due to limited agency budgets. They grew to become some of the most widely used source selection methods by the Department of Defense (DoD) and were also quite common in the civilian space. The pricing pressures resulted in low-ball bids and negatively impacted quality.