Ever since we've had government budgets in this country, there have been efforts by well-intended reformers to more efficiently spend the public's money. One of the more recent efforts is called "Lowest Price Technology Acceptable (LPTA), a standard by which the lowest cost technology or item that meets the government's needs generally wins the contract at hand. While being frugal is generally laudable, there is a slight problem with this strategy--"technically acceptable" is not adequately defined. At the end of the day, the lowest priced option does not always turn out to be the least costly product or service available.
While this bidding process might work well for simple products like paper clips or toilet seats, it doesn't always lead to the best choices in products where higher degrees of technology are involved, such as weapons systems purchased by the Department of Defense. For instance, in the popular movie War Dogs, two stoners placed bids to deliver AK-47 rifles to Iraq, and in the process undercut established arms dealers. The guns delivered proved unreliable, causing major problems with their use on the battle field. Quite often, the same kinds of problems occur with products that win the bid via the LPTA process.
The major problem with the LPTA standard comes in defining what exactly is the technology that is acceptable at that lowest price. In some instances, companies bidding on military contracts low-ball their bids to a degree that they are unable to produce the product at the price they bid, leading to time and taxpayer money being wasted. In choosing the lowest bid, the result is often higher cost to the taxpayers. On some occasions, the lowest price product is quite dangerous, such as Humvees deemed unsafe to operate or guns provided to troops in Afghanistan that jammed, taking scores of American lives. In the instance where it is believed that any higher bid than the lowest would be a better decision, the purchasing department must go through a complex process to justify accepting a higher bid than the lowest based on LPTA--a costly ordeal in and of itself.
Another notable failure of LPTA is in the federal government's purchases of shoddy rockets from SpaceX. Several high-profile rocket explosions have raised serious questions about the ability of SpaceX to successfully and reliably launch rockets. Not only does the government end up spending more than double the original cost of the original contract, and then must shell out more tax payer dollars to repair the burnt up launch pads and delay subsequent missions years into the future.
One member of Congress, whose congressional district includes the facility where SpaceX rockets are produced, had the audacity to attach an amendment to the 2018 National Defense Authorization Act that would have required the Air Force to use and purchase only SpaceX rockets. This is not an economically sound idea, as restricting competition for any products or services leads to higher prices. The Air Force estimated the amendment would have cost taxpayers an additional $1.8 billion more than department's current plan through fiscal year 2027.
This is not to say that SpaceX should never receive government contracts, but it's important for the government to assess all factors--cost, reliability, and preparedness--for every launch to ensure that taxpayers are always getting the most bang for their buck. Doling out money to SpaceX every time a launch is needed simply because its sticker price shows up the cheapest is reckless and irresponsible.
Support Canada Free Press
Two Senators, Mark Warner (D-VA) and Mike Rounds (R-SD), have strongly criticized the use of the LPTA standard for Defense Department procurement. Sens. Warner and Rounds have introduced reform legislation called the Promoting Value Based Defense Procurement Act, under which the Defense Department would be directed to avoid LPTA criteria whenever possible when procuring complex information technology, systems engineering, technical assistance services and other knowledge-based professional services. The interest of more effectively equipping our military with the best quality products illustrates the dire need for passage of this legislation.
Here's to hoping that this bill passes, because protecting national security, as well as taxpayers, should start with thinking beyond the sticker price. The American people deserve better.
Megan Barth, is co-chair of RedWave America PAC and The Media Equality Project. She serves as national spokeswoman for MediaEqualizer.com, the leading online watchdog for the intersection of Media, Technology and Government. .
